startups incubator

5 Bad Excuses Not To Start a Business

entrepreneur startups

Lame reasons to give up before you even start

I often hear people claim to have good ideas for a business, but say they can’t pursue them for one reason or another. Some of course are valid, but others are misconceptions that deserve to be revisited. Here are the top five from my experience.

1. I don’t have the business skills

Not having business experience is not necessarily a problem. There are several ways for a person with a good idea for a product or service to develop it into a business, regardless of his/her background. First, you can look for a business savvy co-founder, someone you trust and that can take the lead on the business side while you focus on developing your product. Second, you can look for structured initiatives that support startups through mentorship and guidance, such as business incubators and institutional programs, like I-Corps and others. Third, you may join an accelerator, like Y-Combinator, TechStars and dozens of others, where mentorship and funding come hand-in-hand. (However, as I point out in another post, you do have to bring something to the table other than just an idea.)

2. I don’t have the technical skills

This is the other extreme to the excuse above: not having the technical skills to develop your product or concept. This is even less of a problem because, if you have the business skills and can articulate the commercial value of your idea, finding engineers or coders to build a prototype or MVP should not be so hard. You might engage them by offering equity (even bringing someone in as co-founder and potential future CTO), royalty payments, or raising a little seed capital to pay consulting fees. You can also explore partnerships with universities and other research centers. If you got something big and present yourself properly, finding the right resources to build your product should not be a deterrent. (Note: In my companies we have built software and websites without previously knowing much about coding – we simply mobilized the right resources).

3. I don’t have the time

Well, you don’t have to immediately quit your job or drop out of school to launch your startup. Most entrepreneurs begin to develop their ideas working a few hours at night and on weekends. If you are really passionate about your idea, you can certainly put on 30+ hours a week even if you are working full-time or going to school. You can also involve people who would put a few hours of their own. After 6-12 months in this “part-time” fashion, you should be able to at least reach a point where you can make an educated decision about betting the next couple of years full-time on it.

4. I don’t have the money

Raising funds for early stage is certainly not easy. But nowadays, building a prototype or MVP is much cheaper than it used to be, so funding needs are much lower on average than say 10+ years ago. There are several free or cheap tools for building products (open source software, Wix.com and others for websites, 3D printers for hardware, CrowdSpring and the like for design etc.) and marketing them (Salesforce, Facebook pages, blogs etc). Similarly, funding has become a bit easier with tools like Angel.co, that match angel investors with entrepreneurs, crowdfunding websites like Kickstarter, and the angel clubs and networks that sprout all over the place. Also, don’t be shy to approach family and friends for seed capital or loans, they will likely appreciate your efforts (as long as you are transparent about the risks). Finally, you may be able to get a lot done without any funding at all, just by bootstrapping and involving the right partners, who would work for equity or success-based returns.

5. I don’t have connections (nobody knows me)

Today it is easier than ever to make your voice heard and connect with people. Even if you don’t know anyone in the industry and don’t have a track record to show for, if you build something that people care about, you will be able to reach the right persons. Check your LinkedIn connections (if you don’t have a LinkedIn account, get one yesterday!) and see if anyone in your network (2nd and 3rd levels included) knows a person you need to reach: ask for an intro. Sign up for all relevant Facebook/LinkedIn groups and take part in discussions. Participate in industry events, meet people, shake hands, network. Cold-call if you have to, just make sure you do it with taste. Start blogging/tweeting about your product or industry. In other words, if you don’t have connections, just make them.

If you believe you have a winning business proposition, as well as the drive and guts to pursue it, none of the issues above should deter you from going for it!

See also Time To Start A Business – Or Not. Picture: ThinkingForward (Tumblr).

Are you sitting on a good business idea? Leave us a comment!

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7 Reasons to Join a Business Incubator

business incubator, startup incubator

Business incubators are great for startups

The definition of business incubator (or startup incubator), according to Entrepreneur’s Encyclopedia, is an “organization designed to accelerate the growth and success of entrepreneurial companies, through an array of business support resources and services that could include physical space, capital, coaching, common services, and networking connections”. They are often sponsored by private companies or municipal entities and public institutions, such as colleges and universities.

I spent over three years in two different incubators – Brazil’s Genesis Institute, part of PUC-Rio’s university, and US’s Rockville Innovation Center, run by Montgomery County’s Economic Development Department – and can personally attest to their benefits. They played an important role in leveraging my businesses and providing valuable support in the early stages of my startups. In fact, according to the US Small Business Administration, 87% of incubator graduates stay in business, in contrast to 44% for all firms. To be fair, it is hard to know how much is due to good selection of companies versus good resources and counseling – but you still want to be among the 87%, don’t you?

7 reasons to join business incubators (no particular order)

  1. Seal of approval. When you’re nobody, it’s good to be associated with somebody! As an incubated company in a prestigious institution, when you go out to look for partners, clients, or capital, you can at least show some credentials. People will know that you have gone through a selection process and were capable enough to enter the incubator. While hopefully understanding you’re still a startup, they will have more confidence in your ability to commit and deliver than if you were unknown and unaffiliated.
  2. Administrative support. May not seem as much, but when you’re only a couple of people (or worse, a lone wolf) it is very important to have accessible support to mundane – and not so mundane – tasks, so you have more time to focus on the important stuff. You want to spend as much time as possible developing your business. Admin help usually comes in the form of a common assistant, interns (especially if the incubator is related to a university), affordable bookkeeping, CPA and legal services, as well as access to basic office gadgets and supplies.
  3. Facilities. Good incubators offer you a nice-enough office, with common meeting rooms and a professional atmosphere – certainly much more than your bedroom or garage! This comes in handy when you need to meet with clients and partners, or interview candidates. It is also good for the entrepreneur’s moral. I was able to get much more work done after walking into a decent office, in a nice building, surrounded by other entrepreneurs, than working from home. Also, incubators usually offer flexible and affordable rent and utilities, which you won’t find elsewhere on your own.
  4. Cross fertilization. Being close to other entrepreneurs is great. You are able to interact with like-minded people, most of whom are going through some of the same issues you are facing. You share tips and experiences. Startups in incubators tend to help each other out, and often engage in partnerships and become each other’s clients. I did business with two fellow incubated companies. At the very least, at the end of the day, you feel you’re not alone. Also, if your incubator is affiliated with a university or company, you may develop fruitful R&D partnerships and have access to great talent.
  5. Mentorship and professional services. Incubators are catalysts for mentors and consultants. I was often approached by people wanting to help: some for free, some for equity, others for fees.  Not all help is the same, of course, and in most cases I passed; but one can find specialized help more easily than if working alone. Incubator managers usually have a Rolodex with contacts of  designers, marketing specialists, biz dev folks, engineers, coders etc, who worked for previous incubated companies and are just one phone call away.
  6. Access to capital. All types of early stage investors – angels, seed funds, venture capital – have their radars on incubators, especially the ones with a successful record of spinning good companies. Incubated businesses are often approached by investors, either one-on-one or at pitching or entrepreneurship events. Also, incubators usually do a good job of opening your eyes to funding opportunities you never knew existed, including government and small business grants and subsidized loans. My first company earned a large government grant from the Brazilian government thanks to the hint we got from Genesis and their help in filling out the forms.
  7. Connectivity. Besides connecting with fellow incubated companies and adjacent resources, there are several national, regional and even global incubator networks and programs, such as Brazil’s Anprotec and World Bank’s global infoDev. This means that if you need to internationalize your business, find strategic partners in different countries, or benchmark experiences, being in an incubator can also be useful.

Of course, don’t expect miracles. The success of your business ultimately depends on your company developing products and services people care about, and your ability to adapt and innovate. Also, if you join an incubator, don’t necessarily take all advice you get at face value; people are just people, some are more insightful than others, and not all incubators attract the best talent. But if you’re starting out, that’s definitely a good place to consider.

See also Not All Angel Investors Are from Heaven. Illustration: shutterstock.com

Do you have experience in a business (startup) incubator? Leave us a comment!