The Entrepreneur Insiders network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question, “What important lesson can transform every entrepreneur’s business for the better?” is written by Vlad Shmunis, CEO of RingCentral.
A few years ago, I attended a roundtable event with Bill Gates , where the interviewer asked Gates what his biggest mistakes in starting and leading a business had been. His answer was something along the lines of: We did all kinds of things wrong, but in the end it kind of worked out anyway. I've always admired this response, not only because it was a graceful dodge of the question, but because of how relatable it was: On the twisty path of entrepreneurship, many things will go wrong, and many times you will find some degree of success anyway.
On that path, you will encounter both good and bad advice, as well as many ideas passed off as business wisdom that just aren't very wise. So as you make your way, try to learn from the mistakes of others—you will have plenty of chances to make your own. In that spirit, I offer you my top picks of business myths to ignore—and why:
Myth 1: Work on your startup as a side project until it takes off
In business, we love stories about upstart entrepreneurs who work day jobs while sacrificing sleep and social time to put in long hours getting their fledgling businesses off the ground. But the truth is that these successes are the exception rather than the rule. Launching a business takes more planning and time than most new entrepreneurs imagine. Developing a product is just the first hurdle. After that, you'll need very well crafted sales strategies to get it to—and keep it in—market. These important initiatives are full-time work plus a lot more , so treat them that way.
In 1991 , I quit my well-paying job and funded my first technology startup with $5,000 of my own money. It was a hard decision because I was making the commitment of both my money and all of my time. But it was the only right thing to do. Of course you should have a plan of how you're going to pay your bills during this time, but making your business your full-time job is a great motivator because it’s a big risk. If you don't truly believe in what you're doing, you will find out very quickly—rather than limping along for several years in your off-hours. If you fail, fail early. But better yet, work hard and succeed big in due time.
Myth 2: Startups shouldn't seek outside funding until they absolutely have to
I heard this advice from so many entrepreneurs before RingCentral sought Series A funding that I was opposed to even having a conversation about outside funding for many years. I believed I could do everything myself, and I didn't want to give up control of my company. But think about it: Do you know a single person who has built a world-class product alone, without counsel and other help from others? I don't.
In retrospect, this resistance was a mistake that delayed RingCentral's growth. Having VC backing offers far more than money: You get tried and true business guidance from partners deeply committed to your success, as well as access to a universe of connections that can open important doors. Funding also dramatically widens your available talent pool.
Once we secured investment we were able to attract a broader range of employees than our initial small group of engineers because funding served as a stamp of approval, which boosted our appeal to job-seekers. It also really helps with prospective customers and partners; people like to do business with people they know, and if they know your board members , this makes it much easier for them to do business with you.
Myth 3: Distribution will work itself out if you build a great product
This is a potentially very costly belief that I’ve witnessed over and over again in many of today's young companies. They build a widget, and their only plan for how to distribute it is to sell it to Google. Clearly, their businesses are going to be stopped cold if Google passes. A better approach is to think through your distribution and partnership strategy early, and ideally prove it in the field empirically before building a solution in search of a problem.
In general, I highly recommend that you control your own sales channel. This was one of my most valuable lessons from running my first startup, where even though we were very successful distributing our software through the PC original equipment manufacturer channel, we could never leverage that into a major self-sustaining business because we never knew just how much would be sold next year or even next quarter. I learned from that experience, and knew when I founded RingCentral that I wanted to control our own sales channel, with channel partners being part, but not all, of the mix.
And there you have it. Dedicate your full-time self to your startup, consider funding before you need it, and have a solid distribution strategy, and you'll be three steps ahead on the path to success. We stuck to these core principles from day one, and in spite of numerous challenges and mistakes along the way, it has worked out for us.