Why Startups Never Get Started

how to start a startup company

Why Startups Never Get Started

“Approximately 543,000 new businesses get started each month, but more businesses shut down than start up each month.”

I speak with aspiring entrepreneurs all the time. In many cases the new entrepreneur is completely convinced they are working on the next unicorn – billion dollar idea. However, with barely any money (i.e. less than $25,000) or time (less than 1,000 hours) spent testing their idea, the new entrepreneur claims, “If only I had a million dollars.” But, seasoned entrepreneurs know better. Serious entrepreneurs start building by utilizing whatever resources they have to get their idea moving forward. They are resourceful, not entitled to experiencing forward progress.

The following are five key points new entrepreneurs should seriously consider so that their startup idea gains traction and moves from a great idea to a thriving startup company.

“I Have the Best Ideas Ever!” Syndrome

Most aspiring entrepreneurs believe their idea will make it big. Having a healthy level of confidence in your business idea is important, especially if it is actually a great idea.

How do you know if you have a great idea?

The best way to know if you have a great business idea is to test it. This usually takes little to no funds to accomplish. Share your business idea with proven and experienced entrepreneurs. Also, see if your target audience will pay for your product or service even before it is launched or commercialized. This is the ultimate litmus test. Nothing beats preorders!

A great question to ask before fully launching your startup company, Would you buy it once it is available?Click To Tweet

“Someone May Steal My Idea!”

Someone stealing a great idea is a common fear among entrepreneurs. It is possible someone you disclose your idea to may use it to their advantage. But, it is highly unlikely because a huge gap exists between having a great idea and proving the idea is great. In addition, without sharing and promoting your idea people can’t get involved. Professionals that regularly work with entrepreneurs and startup companies are unlikely to sign Non-Disclosure Agreement (NDA) because they are exposed to so many business ideas which probably have similarities to your ideas. It is wise to have an NDA agreement created and ready to use when necessary. But in most cases, I rather share ideas freely to create awareness verses being scared of people stealing my ideas and executing them without me. The execution is the hardest part of the equation.

Unfortunately, forcing all potential partners to sign an NDA can severely handicap your ability to create a great product. NDAs can change your attitude, stifle creativity, lock you away from valuable feedback, and turn off potential partners and investors. Asking a developer, designer, angel investor, venture capitalist, or consultant to sign a nondisclosure agreement as a first step to discussing your project sends some strong signals. Unfortunately, they are probably not the signals you want to send.

 – Carl Erickson, CEO of Atomic Object

“I Have a Great Idea, But People Just Don’t Get It.”

A valid reason usually exists for why people are not salivating over your idea. Asking the right people the right questions can uncover the reason(s) for why your idea continues to remains just an idea. Be willing and prepared to receive hard feedback, especially when you feel stuck in the mud and all you want is encouragement. If you are willing to making the necessary adjustments and absorb those hard conversations, you will continue to experience forward progress. If you don’t remain open to wise counsel, you will most-likely continue to move in circles.

Prove your great idea, don't just have a great idea. Click To Tweet

Confidence, But Not Too Much Confidence

Placing too much confidence in an idea is a sign of a newbie entrepreneur, not a seasoned entrepreneur or someone who is thinking rightly about their startup company. In many cases, companies end-up morphing into something completely different from when they first launched. Plot and stay the course, but remain flexible enough to change direction when necessary.

Proof of Concept

Getting to proof of concept is a critical stage to reach. If possible, it is best to reach proof of concept without investors that are not core members of the startup company. Most professional investors will not invest in great ideas, they invest in ideas that have been proven at some level. The more proof, the more willing investors want to invest. Getting over “the hump” is when investors are asking to invest, not you asking for investment. Getting over “the hump” demonstrations to investors that you are serious and willing to do what is necessary regardless of their involvement. More importantly, it signals that with additional capital you will handle their money in the same manner.

More important than having a great idea is the ability to prove it.Click To Tweet

As a new entrepreneur, focus on moving from pre-revenue to post-revenue and less time on funding issues or what you don’t have to get started.


The term risk/reward is not only a familiar term in the financial services industry, it’s is a term aspiring entrepreneurs should understand as well. Money is not the main issue as many new entrepreneurs solely focus on. It is defining and understanding their own risk tolerance and the risk tolerance of those around them. Risk tolerance is based on your stage in life and your propensity to take risk. The more risk you are willing to take, the more reward is possible, but not guaranteed. Many aspiring entrepreneurs don’t have the risk tolerance or risk profile that matches what a serious entrepreneur requires. A wannabe entrepreneur is someone who always talks about starting a business, but does not have the risk tolerance to handle the unknown circumstances that entrepreneurship entails. Another common scenario an aspiring entrepreneur has to wrestle with is whether to hold on to their existing comforts in life, like a good job, or focus on growing an opportunity that provides zero security. Holding on to security and thinking you’re going to grow a million or billion dollar startup company in the process is highly unlikely and unrealistic.  In both situations, this leads to a disappointing and frustrating experience for the new entrepreneur.

Take a risk profile test to gain a sense if entrepreneurship is right for you before jumping into starting a new company. How do you invest in the stock market is an initial indicator of your risk tolerance. With that said, you can be conservative with your financial decisions, and still be a great entrepreneur. Seasoned entrepreneurs are not great gamblers, they are wise with their financial resource – knowing when to invest, when to save, and when to make adjustments to take more risk or be more conservative. But in general, if you tend to play it safe in life, the principle of risk/reward does not usually indicate the characteristics of an entrepreneur. The glamorous idea of being an entrepreneur, “being your own boss,” is much different from having the role, responsibilities, and risk of being an entrepreneur. Only an entrepreneur with time and real skin in the game comes to realize this fact.

Getting to Revenues

Demonstrating people are willing to pay for your product or service is the inflection point for when most professional investors start to seriously look at a startup company. Too many opportunities exist for professional investors to spend time and money on projects and entrepreneurs with little to no track record. Once you have revenues, the very next question will be, “What does it cost to receive those revenues?” So, you are not out of the woods yet.

“Most entrepreneurs either are (or start out as) financially illiterate. Unless you are into financial services or accounting, most entrepreneurs don’t go into business because they love numbers. Most entrepreneurs saw an opportunity to make the world better in some way and built a company around that idea.”

– Bill Carmody, Founder and CEO, Trepoint

The most basic definition of “business” is to sell goods and services for more than it cost. Until you are doing that, you don’t have a business. The purpose for being in business should be more than just buying and selling goods and services. But, without the activity of generating revenues greater than cost, a business will not be able to fulfill its purpose.

My dad taught me a great business lesson when I was growing-up and running a thriving memorabilia business at the age sixteen. As my business was growing and inventory levels needed to increase, purchasing decisions became more significant. The market demand or price for memorabilia potentially fluctuated every 30-days. I thought everything I purchased and placed in inventory was at least worth what the book value said even if the value went down, but that was not the case. My dad said, “Son…

'Something is worth what someone else is willing to pay for it.'Click To Tweet

You don’t know what your product or service is worth until you experience sales and revenues. Only then will you have the necessary proof to build a solid business case for your startup company.


Many new entrepreneurs set expectations either two low or two high. In both cases, the experience of running a startup will be frustrating. Set expectations well by setting challenging business goals, but realistic to achieve. Set goals that can be achieved to build confidence and short-term wins because you will need them to compensate for the beatings you will have to endure. Don’t say, “We are going to make millions of dollars, and you have not received a penny yet.”

For example, if you are launching a new mobile app in the next 3-months, establish a strategy with goals to acquire 500 (month 1), 2,500 month 2), and 5,000 (month 3) by pre-registering users before the app is launched. More importantly, have goals and a plan to generate revenues immediately or soon after the app is launched. Achieving these goals will build momentum and confidence. It is ok if everything does not go as planned and all the goals are not reached, it just means some adjustments are necessary to what you’re doing.

Failing, learning, growing, and making changes to determine what works, that is the life of an entrepreneur and running a startup company.Click To Tweet

Would love to hear about your startup company. Please share by commenting below, chatting with me, or shooting me an email.

Article Resources

James Zimbardi
[email protected]

James Zimbardi is the CEO of Zynergy. He has over 20-years of experience incubating startups, launching companies in various industries, and leading digital business innovation projects for large corporations. His expertise is leading cross-functional teams and progressive thinking startup companies through the process of launching new ideas, products, and services. Mr. Zimbardi has a Bachelor in Business Administration in Marketing and IT, and an MBA from MIT as a Sloan Fellow in Innovation and Global Leadership. Company Bio | LinkedIn Profile

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