Entrepreneurship is in peril.
Last year was said to be the most difficult year for startups in a decade, and the outlook for 2024 isn't too good. Despite slowing inflation and plans to cut interest rates, experts predict continued economic uncertainty.
This volatility, combined with a funding backlog and a nearly non-existent IPO market, could make this year another tough one for established startups and new businesses alike, according to the report. These challenges paint a scary picture for aspiring founders and may contribute to reports that young people are afraid of entrepreneurship.
While tough market conditions are likely contributing to the decline in entrepreneurial participation, another reason for the decline is likely to be unrealistic expectations.
For years, entrepreneurial “success” has become disconnected from reality. Decades of free or nearly free money have brought us the age of unicorns. The overcrowding of startups valued at $1 billion has become the norm rather than the exception.
Meanwhile, stereotypical portrayals in the media tried to convince viewers that all workaholic entrepreneurs were successful and rich. Somewhere along the line, we have confused a luxurious all-or-nothing lifestyle and multi-billion dollar valuation with entrepreneurship.
It's time to reset expectations.
As it relates to company valuations, market economics naturally tempers expectations. Due to the current state of the industry, founders and investors expect fewer unicorns.
But just as important is that aspiring entrepreneurs don't lose faith. In the face of seemingly endless challenges, potential founders have the opportunity to reset their expectations and view entrepreneurship through a clearer, more realistic lens.
Here are some tips for founders to reset their expectations of entrepreneurship and ensure they're in the game.
Leverage your limitations: Embrace authenticity
Success as an entrepreneur isn't about being the smartest person in the room. In fact, quite a bit of ink has been spilled recently discussing why the exact opposite should be true.
Entrepreneurs should focus on integrity and self-awareness instead of harping on their intelligence and education.By recognizing your strengths and By overcoming weaknesses, leaders can build a foundation of credibility.
This credibility allows entrepreneurs to assemble teams with diverse skill sets. By accepting limitations and building strong teams, entrepreneurs can foster an environment where innovation thrives.
And leadership measures and expectations shift from monopolizing knowledge to intelligently surrounding yourself with complementary talent. Breaking away from the myth of the lone genius and aiming for cohesive teamwork is key to helping entrepreneurs on the path to success.
Avoid the dangerous pursuit of perfection
To reset expectations, entrepreneurs should also abandon the notion that success requires perfection for two important reasons.
First, the pursuit of perfection can become an impediment to business growth and inhibit an entrepreneur's ability to think creatively and freely. Apple co-founder Steve Jobs, perhaps the most successful entrepreneur of all time, agreed, warning that the relentless pursuit of perfection can actually hinder innovation and progress.
Second, perfectionism has a significant negative impact on mental health. Research shows a link between perfectionism and extreme anxiety in the entrepreneurial community, where pressure to meet unattainable standards often leads to early burnout.
By letting go of expectations of perfection, entrepreneurs can instead take a more realistic and sustainable path to success and work intentionally to foster a culture of growth and innovation. The measure of success therefore moves from the unattainable to a dynamic journey characterized by continuous improvement and meaningful outcomes.
Embracing Stoicism: Strengthening Behavior and Risk-Taking
Business leaders have long looked to philosophy for lessons on success.
One group whose philosophy is still deeply relevant to its leaders today is the Stoics. Two of his particularly relevant tenets of asceticism call on believers to focus on and take action on what they can control.
For aspiring entrepreneurs, this may mean accepting that they have limited control over external events and the actions of others, but complete autonomy over their own thoughts and efforts. This concept is very important in the context of resetting expectations. Entrepreneurs must recognize that setbacks and unexpected challenges will be part of their journey.
But embracing stoicism paves the way for empowering changes in thinking. This encourages individuals to not only accept that things will not always go as planned, but also to recognize that such acceptance frees them to take bold actions and calculated risks.
By internalizing these insights, individuals can avoid the trap of overestimating downside risks and navigate entrepreneurship with inner calm and confidence.
Introduction of “51% principle”
If the challenges of entrepreneurship still seem daunting, rely on the “51% principle.” This unique business philosophy was developed to provide leaders with two different lenses through which to view their beliefs and commitments on their path to entrepreneurial success.
First, the principle acknowledges that not all decisions are made with 100% certainty. Instead, it's important to be determined and take action, even if you're only 51% sure it's the right path.
Whether they are focused on the viability of a new business, structural changes to an existing business, or many other decisions, founders always We should give up the idea that we have to be sure.
The second lens of the 51% Principle looks at the mundane aspects of entrepreneurship. This philosophy understands that not every day is filled with boundless passion and endless motivation.
Entrepreneurship is hard work. On days when 100% effort seems difficult, 51% effort is enough. There are days when a person accepts that he is only 51% of what he can muster, but this consistent effort, even in everyday moments, propels him on the path to success.
By adopting the 51% principle, entrepreneurs find strength in their choices, find solace in perseverance, and increase the likelihood of turning their venture into an enjoyable and sustainable business.
Nathaniel Horton is a seasoned entrepreneur and co-founder and partner at Incendium Strategies, a leading B2B growth studio. Horton is recognized for his ability to navigate the complexities of entrepreneurship and team building with a focus on integrity, simplicity, and the meaning of long-term success. He is also the co-founder of the Congo Leadership Initiative, a non-profit organization that trains young entrepreneurs in the Democratic Republic of the Congo.
Illustration: Dom Guzman
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