Why It’s Fine If Your Grandmother Finances Your Startup
Lean on your family.
The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America's startup scene contribute answers to timely questions about entrepreneurship and careers. Today's answer to the question "What are some of the biggest misconceptions about startup life?" is written by Allen Shayanfekr, CEO and co-founder of Sharestates.
There are a lot of misconceptions about startup life. As my startup grew, the journey was not always what I anticipated. From obtaining angel or VC funding, to proper startup work ethic and customer retention, here are four key misconceptions that entrepreneurs should expect to hear:
If you don't get funded early on, you won't succeed
Securing venture capital is important, but if a startup does not get funded early on it doesn't mean the company won't survive. There are multiple ways to fund a business, such as bootstrapping, relying on friends or family, and possibly obtaining angel investors. Every company's financing needs are different, and identifying the right partners that can provide more than just funding is essential. Sharestates started off with only a $25,000 family loan. In order to survive, we had to make every single penny count. Our patience paid off.
An idea is enough to build a startup
Having an idea is part of building a business, but maintaining that business takes more than an idea; vision needs to be combined with execution. Having a team of employees that share the vision and add their complementary skills is beneficial, since a company wants all of its employees to row the boat together in the same direction.
Sharestates started with the idea of providing people access to quality real estate deals. But we didn't thrive just because of this concept. As a family-oriented company, we made sure to treat all of our employees and clients like family. This approach fostered loyalty and ensured that business kept returning to the company.
Only big wins are worth pursuing
Being an entrepreneur is much more than a 9-to-5 job; it is the embodiment of passionate execution through constant thought and effort. As an entrepreneur, it may sometimes feel as though you have to give a lot to get a little. You have to put in a massive amount of work, whether it is to attract more traffic to your website, get your name out there above the noise, and build trust with your audience. Over time these huge efforts add up. You have to be in this for the long haul, and be prepared for incremental growth.
Customers will inevitably flock to a new, innovative product
While new and innovative products make for great water cooler talk, customers aren't spending their money frivolously. Now more than ever, they are relying on referrals and reviews from trusted sources before making purchases. For a consumer to want it, the product or service on offer must be better than something that is currently on the market.
Just because you think something is innovative doesn't mean a potential customer will feel the same way. User testing, feedback loops, iterative processes, and a deep understanding of your audience are all fundamental elements of bringing a product or service to market successfully. The way you position your product and your brand in customers' minds is a cornerstone for success.