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Common misconceptions about business demystified

This article is based on a talk I gave to a group of women looking to start their own businesses. Each speaker was asked to cover a certain topic and my task was to summarize common misconceptions about starting and running a business. This list isn't exhaustive in any case but it touches on some important insights that unfairly get omitted when talking about this topic.

Experienced business owners aren't some rare, mysterious animals that can only be observed in their secluded natural habitat. You don't have to go on an expensive safari in a foreign country to figure out how they tick. Many people work closely with them on a daily basis, they appear in the media spewing their wisdom, there is no shortage of information on business practice permeating our culture.

So why is it then that many newcomers experience hardship when embarking on an entrepreneurial path? Why do they feel like they've stepped into a foreign land of confusion instead of onto familiar grounds?

Myth #1: My view isn't limited

What is this business malarkey like anyway? Do you really get to boss people around like your previous one did you? Or would the opposite serve everyone better? Is your intuitive response here in-sync with what is usually considered as reasonable?

You've seen so many mistakes being made in your previous employment. Obvious, far-reaching, easy fixable mistakes. Surely you could do better when given enough authority? You would exert strong but benevolent control over this mini-world of yours and finally make everything ticks like it should. Right in the face of all the other companies that just don't seem to get even the simplest of most logical concepts.

Cognitive biases and other irrationalities

Unfortunately for everyone, there are subconscious processes called cognitive biases that sneak in and distort our thinking. Cognitive biases skew our perspective away from reality, make us behave irrationally, all the while keeping us feel completely in the right.Tweet this Our irrationality is often predictable which helps with learning to intercept and correct our faulty reasoning and practicing awareness so we can apply it at a given moment.

The truth is whole

Being right about one thing can make us too sure of ourselves and shortsighted about the big picture. And the devil is in the details. Just because your boss is wrong about one issue you have a better grasp on doesn't prove you see everything else clearly. You're likely overlooking a lot of components and underestimating the effort it takes to make stuff work—not only your old company.

For more on this read about how technical founders are the most successful if coupled with business cofounders or the experience in general: Confessions of a Wannapreneur

Startup history is full of stories about technical founders who poured a lot of effort into building their product only to later found out no one is interested in what they have to offer. The newly found freedom can be a double-edged sword to a technical founder who's main motivation was breaking free from nonsense in their previous company.Tweet this They may get to fix all the nonsense they experienced, but they better not focus only on those familiar aspects. There are many pieces of the product-market fit puzzle. Assumptions should be tested early and raw development shouldn't take away focus from customers. One of the proverbs to heed to avoid similar mistakes: “Before you judge a man, walk a mile in his shoes.”

Beat it with awareness and smart processes

The first step to combating our thinking faults is to become aware of them. You may or may not be accustomed to observing your own thinking process, depending on your personality type and environment you were brought up in. But everyone has blind spots that can hinder communication with certain people or in certain situations that are usually on the opposite side of the spectrum from us.

It's crucial to dedicate some time to learning about varieties of thinking styles and applying what you've learned in practice. A great read on this is the HBR article: Pioneers, Drivers, Integrators, and Guardians. The work styles discussed there are equivalent of the DISC personality space, and a strong connection can probably be drawn with the MBTI personality types. The DISC personality evaluation is simple enough to grasp quickly while giving you a great insight into your own and others' personal intricacies. I recommend you learn about the different DISC styles, get yourself tested and see if you can recognize these types in people you communicate with.

Once you're aware of your strengths make sure you complement your weaknesses with a team member, partner or a friend who you can trust to cover your blind spots and vice versa.

The second step is to try to figure out what processes you can introduce in your business that increase your chances of intercepting the biases before any damage is done. For example, if you know you'd like clear and simple issue summaries from a person who prefers a quiet analytical approach to their work, don't “confront” them one-on-one but instead schedule regular meetings or come up with ways they can deliver their conclusions after having enough time to go over the details and feel confident in their recommendations.

Myth #2: Breaking points happen to other people

As anyone who has done an internal apartment redecoration on a budget knows, (or organized an elaborate vacation without the help of an agency) things get exponentially more complicated the more variables get into the picture. It seemed so predictable to start with, but halfway through it all the details you overlooked and failed to plan for popped up. And you wish you had hired a professional to do their thing and you kept to your side of the street (so to speak).

As much as you don't want that to happen to you, it likely will at some point of running your new company. If you had only known what the overwhelming level of detail, responsibility, and effort it takes to make it all happen, you would have certainly done it differently, if at all.

How you react to that uncomfortable situation will make or break it for you. Do you fold under the mountain of uncertainty, or do you learn, adjust, and bravely walk on?

Everything except your secret sauce can be off-loaded

Even though responsibility is all yours, it doesn't mean you have to actually do everything on your own. Figure out what your secret sauce is and double down on it. See how you can off-load anything else to someone else.

Myth #3: It's about me, I'm the boss, I set the criteria

Freedom! At last! No more stupid office politics force fields, delivering buggy products because someone upstream decided to change course mid-flow, nor fretting the day because of a looming threat that management needs a scapegoat for their last week's flop.

Being clear on your own purpose and direction is crucial to inspire others to follow you, convince clients you are the droids they're looking for, to keep yourself motivated and pulling forward. That is why you should always start with the why.

Make the customers' grade

But there are two sides to this coin. The end goal of any business is customers, their happiness, their needs, their pains. They will inevitably communicate what they think of you, aloud or by passing you by. So in the end, you should never neglect the criteria they evaluate you with and always make sure you make that grade too.

Fall in love with your customers, not your product

As mentioned before there are a lot of founders who fail to monetize their efforts because they focused too much on building the product instead of first making sure that it fits their targeted or even any market. To avoid making the same mistake prioritize your customers, prioritize solving a problem they have without being attached to any particular solution. Steve Blank's thoughts on this are a required reading for any aspiring founder/business owner.

Amateurs assume, professionals measure

You can find a lot more awesome content about how to actually get to your customers on Customer Development Labs. A systematic approach to interviewing customers and validating your assumptions can help you save a lot of time in the beginning, and can be the deciding factor in your success once you actually get to market. Doing this properly doesn't come easy or automatically to most people because this process isn't intuitive, especially when looking at it through the lens of your idea/product. But as with anything else, practice makes perfect.

Myth #4: I'm home free if I survive the first year

A year seems like such a long time. After grinding at it every day month after month secrets are revealed, things fall into their right place, there are processes and people you can rely on. Next year will be the one when you reap the rewards of your hard labor, right?

That may have been the small business experience once upon a time. But in our modern times with so many changes and choices around us, there's always something new to adjust to, something new to learn and some novelty to respond to so we don't become obsolete. Not all sources agree on the actual number, but everyone agrees you can't consider a new business successful before it stands a longer test of time. Many quote longer than five years because most of the new businesses don't survive past that mark.

Never stop learning/innovating/testing

That is why you shouldn't expect everything to fit perfectly into your old molds. Try not to get attached to your original solutions, keep testing the waters, and allow for change when you see it is necessary or even if it's only a small improvement. You don't have to drive yourself paranoid though, being on the lookout all the time can drain you and be counterproductive. A good practice might be to schedule a monthly review when you throw yourself into a “what-if” brainstorming session.

Myth #5: Plateauing means something's wrong

Learning rarely happens in one smooth chunk of effort where you go from inexperienced to skilled. Instead, the learning curve looks like steps; periods of time when you invest, learn and practice without changes in the result (plateau), and then almost in an instant a breakthrough happens where you feel a significant improvement has been achieved (sudden increase).

It's important to remember that sometimes results don't follow the same pace as our invested efforts. Don't abandon ship (or search for alternative transportation) just because you don't see land ahoy after sailing for a while. Refer to your map to get a sense of your position and direction. And if you feel a bit out of your depth there's nothing (or rather no one) like a person who's been through it all to help you navigate.

Find mentors to help you milestone the learning steps

A great mentor can help immensely to save time, show you a few tricks, point at any biases you may be blind to, share relevant experiences, even draw you a realistic map of your territory so you don't get lost on your journey.

Mentors are especially important in cases where you have mistaken a completely wrong direction with a plateau. Sometimes you see no results because you really are doing something wrong, and persisting on that path can only be a waste of effort. To find a mentor connect to your local business meetups and similar events. Anoint the chosen ones with lunch while you absorb their wisdom.

Effort is where it's at ladies!

One thing also worth mentioning here is how the parenting styles can differ when it comes to girls and boys and how that affects how grown up men and women tend to approach solving problems differently.

Girls tend to do better at school than boys, for whatever reason (details about this are far beyond this article, please excuse the generalization). When boys fail, parents and teachers encourage them not to give up, to keep trying even if they don't succeed at first. Girls succeed in a lot of areas without much intervention, so they don't get to experience a lot of encouragement or lessons to persevere. This can create a sense in girls that success in an area either comes naturally or doesn't come at all. Girls/women identify themselves with a discipline, as being a “natural” in the field, and perhaps don't stick with something new long enough to get results and see proof they are in the right place after all.

This may even be a hidden cause behind the double standard that holds women's mistakes to more scrutiny than men, perpetuating the bias that if at first she doesn't succeed she should give up. But the real causes and effects aren't important to discuss here. What is important here is that, regardless of gender, success doesn't follow effort right away. Sometimes you feel like a fish out of the water at first, but if you keep at it the new steps will start to blend naturally into your flow and before you know it you're that many steps closer to your goal.

Myth #6: Statistical data is very relevant

Media is constantly showering us with latest scientific discoveries and new big data revelations. They all sound so important and useful, experts have tested the conclusions, and if it's published on major medium's website it must be true. I better pay attention and see what nuggets of wisdom I can pick up to apply to my business.

The economy is in crisis, everything is slowing down, this just isn't a good time for business, better not start anything new now. There aren't enough jobs for everyone, government should do something about that. The taxes in this country are through the roof, it's impossible to sustain a business under such conditions. SMEs are the foundation of any economy, we stand behind them and support them through various funding options.

Lies, damned lies, and statistics

But if you look behind the curtain you'll find that most of the commonplace stats don't help much about your situation, because they're statistical data. Just as it doesn't make sense to gather statistical data from too small a sample, it doesn't make sense to apply the gathered statistical data to individual cases. Statistical data only makes sense when applied to whole systems they represent. Individual cases can differ significantly from the average or median scores of the stats they are included in.

Just because many companies are struggling at a point in time doesn't mean you can't be successful starting your own. Maybe you'll have advantage of not having to change many outdated and detrimental practices your competitors are faced with. Just because there doesn't seem to be a lot of qualified and experienced people to hire on the market doesn't mean you won't find just the few you need for your micro endeavor. Just because the environment in your country isn't business friendly doesn't mean there aren't many successful companies that thrive despite that.

This doesn't mean averages can't give you context, or hint at something relevant, but it is important not to follow them blindly as if they're some inevitable law. Always take statistical data with a grain of salt.