These are very common false assumptions in entrepreneurship.
“What gets us into trouble is not what we don’t know. It’s what we know for sure that just ain’t so.”— Mark Twain
I answered a Quora question about this. Here’s my list of seven:
- That being profitable means having cash in the bank. Seems obvious, but spending on inventory, waiting on accounts receivable, buying assets and some other spending suck up cash while not having anything to do with profits. Profits ≠ cash. For more on this, The Difference Between Cash and Profits.
- That the lowest price option usually wins. That’s just not often true. Price is the strongest marketing message there is, and high-value high-price options are often the best strategy for a startup. Having the lowest price doesn’t necessarily generate volume (think of discount sushi, for example) and usually takes a lot of capital.
- That if you build it they will come. Actually, no. Not if they don’t know about it. Some really good products and services failed for lack of getting the word out. Meaning: marketing.
- That the highest quality product will win. Yeah, I wish this were true. But there’s marketing, sales, distribution, and all the rest of the business. In my four decades in business I’ve seen many better products lose out to better marketing.
- That the first to market wins. Nope. Rarely. Apple, Google, Facebook weren’t first. The winner is a combination of work, luck, strategy, resources, positioning, capital, and other factors.
- That you can’t do it if somebody else is already doing it. Actually, you can. See my point #5 above. Just do it differently, or better, or in a different market, or with a different strategy. Businesses are always copying other businesses.
- That more hours wins. People who work 80 hours a week rarely get more than a few percentage points of additional production over those who work 40 hours a week. Work smarter, not harder. To generate productivity in a group, acknowledge that people have lives, families, and need for downtime, regular exercise, etc.
Note: this was originally my answer on Quora.
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