Some entrepreneurs forget that they need an innovative business model along with an innovative solution to have a successful startup. Inventors alone, or business gurus alone, generally fail. It really takes a complementary pair of founders to improve the odds. That’s why I say “two heads are better than one” in a startup. Consider the original founders of Apple and Microsoft as examples.
Michael E. Gerber memorialized this concept many years ago in his classic book E-Myth, which postulates that most startups are initiated by entrepreneurs with technical skills, rather than business skills, resulting in a high failure rate. Since both skills are required in equal amounts for success, the single founder failure rate today is reported to far exceed 50 percent.
As an angel investor, I certainly see continuing evidence that this phenomenon hasn’t changed much in the past couple of decades. Technologists, in particular, who spend most of their time working in the business, rather than on it, still harbor several myths that contribute to their frequent demise:
Every investor looks first for an entrepreneurial perspective that includes understanding how the business must work, and then how the solution does work. The required business work encompasses the long-term people and process growth associated with marketing, sales, distribution and customer support, as well as product costs, support and follow-on plans.
The best entrepreneurial perspectives go well beyond the technology and making money, into an integrated vision of the world where satisfying a customer need leads to the greater good for the environment and society. They provide a personal legacy, satisfaction and happiness. The challenge is to maintain a balanced view between inside and outside business drivers.
Social media and the Internet are great channels to test your balance and overcome the myths and biases we all carry as startup founders. I recommend more time building the right team and the best business with the best solution will evolve naturally. Finally, make sure your investor story is as strong on the business elements as it is on the solution.