There are a lot of misconceptions about those who build companies. The real lives of self-starters are quite different from the impression created in movies, novels or the news media. These fictions discourage some would-be entrepreneurs from giving it a go, and even influence policymakers. So let’s debunk some of the most common falsehoods.
Entrepreneurs are motivated by money. In reality they create firms by accident, or because they want to prove themselves, or because they are bored, or have a passion - rather than because they want to get rich. Studies have shown that the short phrase that best sums up the drive of those who create new enterprises is "I’ll show them". Money is a way of keeping score and providing capital for the next project - not the prime objective.
The idea is what matters. In fact, execution is everything. We all have brilliant concepts that never come to fruition because they are impractical, or because we are too lazy or distracted. Making it happen is what counts, and this is the difficult bit - which is why so many seemingly clever schemes fail.
Entrepreneurs are born not made. Most successful business owners do not start out very young. They gain experience working for others, and learn how to run an enterprise before venturing out on their own. Just as no one is genetically programmed to be a doctor or an architect, so entrepreneurs tend to find their calling by nurture rather than nature.
Start-ups are one-man bands. Most companies that do well are developed by teams. A prime mover often gets most of the attention - and possibly the rewards - but it is the winning combination of skills formed by a partnership of players that is the most likely formula for success.
Entrepreneurs are inventive geniuses. Very few inventors make it big in business. Rather, those who tend to strike gold are commercially-minded individuals who replicate an original
product and make it cheaper, market it better or watch the costs properly.
Entrepreneurs are mostly academic rejects with no qualifications. Today more and more business owners have university degrees or doctorates. Being an entrepreneur is now a respectable career choice, so more of the educated middle-class have taken the plunge.
Most new businesses fail. Actually the survival rates for companies have been rising in recent years. Only a small proportion of operating enterprises go bust each year - as opposed to inactive limited companies being wound up or struck off, which distorts the statistics. And companies usually fail because of management shortcomings, rather than external forces.
Entrepreneurs are loners. It takes people skills to build a company, and most entrepreneurs are extroverts who enjoy the company of others. They choose to work for themselves because they enjoy the independence, not because they want to hide away from colleagues.
Entrepreneurs have chaotic personal lives. The popular image of an entrepreneur is of someone who has sacrificed everything to make a fortune - including his marriage and family. Elsewhere they are portrayed as playboys with no domestic ties. The truth is that most have a settled home life and stable relationships. The support of a steady partner is needed to help the entrepreneur through the tough times.
Entrepreneurs are gamblers. Yes, they take financial risks, but most are good at judging the downside, and are more cautious in their ventures than it might appear to the uninformed. The vast majority of bankrupts are not entrepreneurs who failed: they are ordinary workers who borrowed too much.
Entrepreneurs are workaholics. While a founder needs to be committed, most work no more hours than ambitious corporate managers. And at least the self-employed can choose their own work patterns. Moreover, surveys show the most stressful aspects of life for staff in big companies are office politics and commuting, things entrepreneurs can largely avoid.
Entrepreneurship is neither as difficult nor as miserable as many people think. Bear this in mind next time you entertain the idea of running your own show.