By Nathaniel Horton
Entrepreneurship is in a dangerous place.
Last year was said to be the most difficult one in a decade for startups, and the outlook for 2024 isn’t much better. Despite slowing inflation and plans to cut interest rates, experts predict economic uncertainty will continue.
This uncertainty, combined with a reported stagnant fundraising and a near-dead IPO market, could make this another tough year for both established startups and new ventures. These challenges are creating a frightening environment for aspiring entrepreneurs and may be contributing to reports that young people are afraid to start their own businesses.
While tough market conditions are likely contributing to the decline in entrepreneurial participation, unrealistic expectations are likely another reason for the decline.
For many years, entrepreneurial “success” has become detached from reality. Decades of free or near-free funding have ushered in the age of the unicorn. A plethora of billion-dollar startups have become the norm rather than the exception.
Meanwhile, typical media portrayals would have viewers believe that all workaholic entrepreneurs are millionaires. Somewhere along the line, we’ve come to confuse lavish, all-or-nothing lifestyles and billion-dollar valuations with entrepreneurship.
It’s time to reset your expectations.
When it comes to company valuations, market economics naturally play a role in tempering expectations: Given the current state of the industry, founders and investors are expecting fewer unicorns to emerge.
But it is equally important that aspiring entrepreneurs do not lose faith. In the face of endless challenges, aspiring entrepreneurs now have an opportunity to reset their expectations and look at entrepreneurship from a clearer, more realistic perspective.
Here are some tips to help founders reset their expectations about entrepreneurship and make sure they get on board.
Making the most of your limitations: Embrace authenticity
You don’t need to be the smartest person in the room to be a successful entrepreneur — in fact, there’s been quite a few editorials recently about why the exact opposite should be true.
Instead of focusing on intellect and education, entrepreneurs should focus on authenticity and self-awareness. and By addressing weaknesses, leaders can build a foundation for credibility.
This authenticity allows entrepreneurs to assemble teams with diverse skill sets. By accepting limitations and building strong teams, entrepreneurs foster an environment in which innovation can thrive.
Leadership metrics and expectations change from monopolizing knowledge to surrounding yourself with smart, complementary talents. Moving away from the myth of the lone genius and toward cohesive teamwork is key to entrepreneurial success.
Avoid the dangerous pursuit of perfection
To reset expectations, entrepreneurs should let go of the idea that success requires perfection. There are two important reasons for this.
First, the pursuit of perfection can be an obstacle to business growth and stifle the creative and free-thinking of entrepreneurs. Steve Jobs, co-founder of Apple and arguably the most successful entrepreneur in history, agreed, warning that the relentless pursuit of perfection can actually hinder innovation and progress.
Second, perfectionism has a huge negative impact on mental health: Studies have found a link between perfectionism and severe anxiety in the entrepreneurial community, and the pressure to meet unattainable standards often leads to early burnout.
By letting go of the desire for perfection, entrepreneurs can choose a more realistic, sustainable path to success and intentionally cultivate a culture of growth and innovation—shifting the measure of success from something unattainable to a dynamic journey marked by continuous improvement and meaningful outcomes.
Embrace stoicism and increase your motivation and risk-taking
Business leaders have long turned to philosophy for lessons on success.
One group whose philosophy remains highly relevant for leaders today are the Stoics. Two particularly relevant tenets of Stoic philosophy encourage followers to focus and take action on what they can control.
For aspiring entrepreneurs, this might mean allowing limited control over external events and the actions of others, but full autonomy over one’s own thoughts and efforts. In the context of resetting expectations, this concept makes a lot of sense. Entrepreneurs must accept that setbacks and unexpected challenges are an inherent part of their journey.
However, embracing Stoicism paves the way for an empowering shift in mindset. Stoicism encourages individuals to not only accept that things won’t always go according to plan, but also to recognize that such acceptance gives them the freedom to take bold actions and calculated risks.
By internalizing these insights, individuals can avoid the trap of overestimating downside risks and navigate the entrepreneurial environment with peace of mind and confidence.
Introduction to the “51% Principle”
If the challenges of starting a business still seem daunting, rely on the “51% Principle.” This unique business philosophy was developed to provide leaders with two different perspectives on belief and commitment on the path to entrepreneurial success.
First, this principle acknowledges that not every decision is made with 100% certainty. Rather, the key is to act with determination, even if you are only 51% certain that it is the right path.
Whether focusing on the feasibility of a new venture, a structural change to an existing business, or any other decision, founders should let go of the idea that they must always be certain.
The second perspective of the 51% Principle explores the everyday nature of entrepreneurship: This philosophy understands that not every day will be filled with unbridled passion and endless motivation.
Entrepreneurship is hard work, and on the days when you can’t quite give 100%, 51% is good enough. Accept that there will be days when you can only give 51%, but this consistent effort, even in those mundane moments, will move you forward on the path to success.
By adopting the 51% principle, entrepreneurs can find strength in their choices and comfort in persevering, increasing the likelihood of turning their business into an enjoyable and sustainable pursuit.
Nathaniel Houghton is a seasoned entrepreneur and co-founder and partner at Incendium Strategies, a leading B2B growth studio. Houghton is known for his ability to navigate the complexities of entrepreneurship and team building with integrity, simplicity, and a focus on what it means to succeed long-term. He is also co-founder of the Congo Leadership Initiative, a non-profit organization that develops young entrepreneurs in the Democratic Republic of Congo.
Illustration: Dom Guzman
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