The 5 Bald Faced Lies Told to Aspiring Entrepreneurs
Think you need to go to an elite college and follow all the rules to find success? Think again.
It can take a lifetime to sort through all the truly horrible advice you'll be told as you create your startup. Often these opinions are stated as facts, until someone proves them to be myths. For example, before 2014, the idea was that you simply couldn't build a successful startup outside of Silicon Valley. The head of a very well-known venture firm once told me that they loved the work I was doing with the social enterprise I founded to increase the number of high-growth companies founded by Black women, but they wouldn't fund us unless we moved from New York (Black population: 24.3 percent) to Silicon Valley (Black population: 2.3 percent). Fast-forward five years: extremely successful companies like the e-commerce platform Etsy (New York) and the fintech platform Kabbage (Atlanta), and funds like Steve Case's Rise of the Rest, which focus solely on investing in startups located outside Silicon Valley, have shown that tech can thrive in the rest of the United States. Companies like Spotify (Sweden), Gojek (Indonesia), and WeTransfer (the Netherlands) show that startups thrive globally.
As a Builder, you will need to develop the ability to separate fact from opinion. Entitleds have a habit of sharing information that they literally pulled out of thin air as if it's fact. They get away with doing this because so few of us have run this race that there's no one fact-checking them. It's important to do your own fact-checking. Here's some of the truly horrendous, stupid, idiotic "advice"—aka lies—I was given while building my business.
Lie 1: You MUST know how to code to build a startup
Don't know how to code? Well, neither do 99.9 percent of the tech venture capitalists and a surprising number of startup founders. When I first started The Budget Fashionista, I didn't know how to code either, but I still managed to turn a little blog into a viable company and a successful exit.
No, you don't need to know how to edit an SQL database in order to create a successful startup. However, if you're building a tech-enabled company, it will be helpful to know a bit of code. It's very hard to operate in a community if you can't speak the language. You don't need to rush out and take a coding class, but until low-code and no-code software become completely ubiquitous, it's in your best interest to know enough to be able to communicate with your developer. Think of it this way: when you go on vacay to a non-English-speaking country, you try to learn a little of the language in order to get around. Think of learning at least a basic amount of code as a way to help you communicate within the startup community.
Now, before you panic and abandon your startup idea because coding scares you, it's important to note that coding isn't that hard! Tech bros have built up this idea that coding takes genius-level knowledge and skill, but it really doesn't. Big tech likes to act like coding is a skill unattainable to the average Builder, when in reality the tech bros have just made it seem that way in order to make themselves look (and feel) special. Coding is a skill like any other that you can learn through study and practice. Remember how we talked about using Entitleds' technological advances to level the playing field for Builders? Coding is a perfect example: thanks to the tech bros, there's an endless supply of online coding courses, many of them free!
Of course, there are advantages to knowing how to code. My husband, Tobias, is a software engineer for a major tech company, which means he knows how to build websites and applications. On any given week, he has four to five people pitching him ideas. Tobias and his developer friends don't need you, but you need them. It's much like how a contractor can build a house without an architect, but an architect can't build a house without a contractor. The rock stars in tech are those who can create something out of your ideas, which is why having a basic understanding of the computing language being used to build your business is so important.
The truth: Coding isn't that important, and it's also easy to learn
Sure, knowing how to code will be helpful if your startup heavily depends on software. But if you already know you're going to have a different role in your business, or perhaps are founding a business with very few advanced tech requirements, don't waste your time and energy panicking over coding. There are developers out there looking to partner with early-stage startups and, if you have the capital, you can hire them to take on your heavy coding work or convince them to join your team as co-founders.
Lie 2: You MUST graduate from an elite university
Startup people love to say that the best founders come from elite institutions like Harvard, MIT, and Stanford. What purveyors of this myth neglect to tell you is that a large number of funded startups come from these institutions because these also happen to be top schools attended by investors. They are taking the outcome of their limited networks and creating a pattern that reinforces the biases that exist in their networks. I only recruit founders from Stanford . . . My best investments come from Stanford. We've talked about this pattern-matching bias before. Pattern matching is a convenient and rational-seeming way to exclude groups of people from receiving venture capital support.
Yes, white men have generally been able to sell their startups more often than other groups in the past. But is this because white men are better at building startups or because investors have small networks and fewer women and minorities have the opportunity? (Hint: It's the latter.)
The truth: Most successful startup CEOs did NOT go to elite schools
Some of the world's most successful companies were founded by people without a degree from an elite institution, including a number of the rich white guy founders (cognitive dissonance is real). Jack Dorsey, co-founder of both Twitter and Square, went to Missouri University of Science and Technology. Steve Case, founder of AOL, went to Williams College, a small school in northern Massachusetts. And a number of famous founders didn't even complete college at all! Steve Jobs, god of tech bros, went to Reed College, a small liberal arts school in Oregon, then De Anza community college in Silicon Valley, but never graduated. Billionaire Richard Branson didn't go to any university. At all.
While it may seem like all startups are run by a bunch of geeky twenty-five-year-old Entitleds in Stanford hoodies, the truth is anyone can build a startup. In fact, the average age of a successful startup founder is forty-five. Tina Sharkey was fifty-three years old when she founded the consumer goods company Brandless in 2017. Though it raised over $300 million in venture investment, it closed in February 2020—then got a second chance in 2021 after raising a fresh $118 million. Beatriz Acevedo, founder of the Latinx media startup mitú, graduated from the University of California, San Diego. Many founders don't even have access to venture capital. Liberian-born Richelieu Dennis sold Sundial, a beauty company including brands like SheaMoisture targeted to Black customers that he co-founded with his mom on the streets of Harlem, to Unilever for $1.6 billion.
Lie 3: You MUST follow the "rules"
I once got a DM from a leader of a diversity in coding group stating that we (meaning Builders) need to learn how to work the "system" and follow the rules in order to be successful in the startup space. It was an interesting conversation because there's no indication that following the rules has been the path to success for Builders. If that was true, wouldn't the people who run the world look a lot more representative of the world itself? Following the rules has, at times, kept us safe, but it hasn't kept us wealthy.
The truth: Successful entrepreneurs give no damns about "rules"
Builders create their own rules. Often, diverse founders are told they should go "work for someone in the space" before they start their company. They're told to pay their dues and that they just need a bit more experience. Yet research indicates that previous work experience isn't actually much of a marker for success. Working for someone else might widen your network, but it doesn't mean you will build a successful company.
And the truth is, the Entitled white boys of tech don't ever follow that rule themselves. Larry Page and Sergey Brin, the founders of Google, didn't say, "Oh, let's go work at Microsoft before we build the most powerful company on the planet!" Mark Zuckerberg didn't think, "Once I graduate from Harvard, I'm going to go work for IBM and then start Facebook."
Just take Maria Contreras-Sweet, the former head of the Small Business Administration under President Obama, who broke the rules of how banks get funded. The daughter of meat packers, she founded ProAmerica Bank by getting her friends and family, many working-class folks, to invest funds from their 401(k) accounts, building the bank into one of the most successful commercial banks in the Latinx community.
Big ideas are what lead to BIG companies. Small ideas don't change the world. Knowing the system and following the rules is great—if you want to work for someone else.
Lie 4: You MUST build a certain type of startup
When I was using technology to build the beauty brand for Black women, I was told by Voldemort the Venture Capitalist and his Death Eaters (fellow VCs) that (Black) beauty wasn't a "startup." In his mind, only Google could be a startup. Now internet-based beauty brands like Glossier, IPSY, and BROWN GIRL Jane are all well-known and successful beauty startups.
The truth: Anything can be a startup
Literally anything can be a startup. Khaki pants for men? Yep, that's a startup (Bonobos). Eyeglasses? Warby Parker. Generic household products? Brandless. Top K-pop teen singing group factory? Bighit Music.
Don't believe every idea can be a startup? Here's a brief list of all the very non-techy ideas that are now well-funded startups.
- Cotton swabs — LastSwab
- Khaki pants for dudes — Bonobos
- Tampons and maxi pads — LOLA
- Eyeglasses — Warby Parker
- Hair weaves — Mayvenn
- Venture capital — Genius Guild
- Generic household products — Brandless
- Preschool — Wonderschool
- House paint — Clare
- Virtual "big box" retail — Amazon
- Luggage — Away
- Insurance — Lemonade
- Human resources — Gusto
- Grocery shopping — Instacart
- Dental floss — Cocofloss
- Basic kids clothing — Primary
- Makeup — Glossier
Khaki pants. Cotton swabs. Hair weaves. Dental foss. Yeah, everything is and can be a startup.
Lie 5: You MUST protect your idea from thieves!
Every time I give a speech—EVERY TIME—at least one person will ask, "How do I protect my idea from getting stolen?" Our staff actually places bets on how long it will take before someone asks this question.
Scared someone is going to steal your idea? Here's a foolproof way to protect your idea from thieves:
First, write your idea on a piece of paper. Do not share the idea or piece of paper with anyone, including your pet dog, your friends, or anyone who could help fund you or help you build the idea. Then, place the piece of paper with the idea in a safe that only you know the combination to.
Voilà, your idea is 1,000 percent protected! Yes, you won't be able to build it, get funding, or acquire customers, but at least it's safe and no one can steal it from you! You're a winner!
The truth: Protect your idea by building your idea
The only way to protect your idea is to build it. It's useless just sitting in a vault or lying dormant in your mind. Building a business involves inherent risk, but you must be brave enough to build it. You owe it to yourself and that genius idea of yours. If you realize a version of your idea has already been built by someone else? Build it better.
Many people will tell you to get a trademark or a patent on your idea. Look, unless you have a cure for cancer or some amazingly inventive technology that you can build yourself, getting a patent or trademark at the start of your building journey is a total waste of money. A patent or trademark only protects you if you sue, and a lawsuit is costly. In America, patents cost between $1.6 and $3 million to litigate, according to the American Intellectual Property Law Association. Also, filing a patent lawsuit reduces the likelihood of potential investors wanting to work with you because of fear of being sued.
As an investor, I hear hundreds of pitches every year. The reality is I often don't understand how one company's Orange Thingy is different from everyone else's Orange Thingy. If a founder asks me to sign an NDA for something that is clearly not a high-tech idea, it raises red fags for me. Instead of hiring lawyers to draft all of these unnecessary documents they should be spending that money building the company.
You've got your mind right, and now it's time to build
You've embraced your fears. You are now ready to build your personal toolbox, which will provide the foundation and tools to help you celebrate the peaks and valleys that will come with building a company. You GOT this.
From BUILD THE DAMN THING: How to Start a Successful Business If You're Not a Rich White Guy by Kathryn Finney with permission from Portfolio, an imprint of Penguin Publishing Group, a division of Penguin Random House, LLC. Copyright © 2022 by Kathryn Finney
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