Every day, hundreds of entrepreneurs create crowdfunding campaigns on Indiegogo to raise money and awareness for their startups and small businesses.
As the CEO of Indiegogo, I have been in touch with potential entrepreneurs from all over the world — with a wide variety of business ideas. Across this spectrum, I have realized that many of them are misguided by common entrepreneurship myths, time and time again.
Here are the five most common myths about starting a business that I have encountered— and how I have seen them debunked at Indiegogo:
Myth #1: There’s a “right” time to start a business.
We started Indiegogo months before the financial crisis of 2008. When the economy took a hit, most people advised us to shut down operations. However, my co-founders and I were so passionate about our efforts to democratize fundraising that we pressed forward at all costs.
It was not easy, but every time we spoke with someone who was denied a loan from a bank, or could not find a way to raise money for his or her cause, it reinforced our commitment to the mission of Indiegogo — empowering anyone, anywhere in the world, to raise money for anything.
We learned that there is no “right” time to start a business — especially when basing timing on external market factors. The only “right” time is when you are passionate about your idea, product or service.
Myth #2: Startups need venture capital.
Entrepreneurs do not need venture capital to start a business, especially now that crowdfunding platforms allow you to raise money and attract a global audience that includes potential customers.
For example, we observed a group of product designers from California present the Satari Star Swivl, a camera-mounting device for smartphones that automatically follows you as you move from side to side, eliminating the need for an old-fashioned tripod. The designers pitched their product to multiple investors and VCs, and were rejected every time. On the other hand, their Indiegogo campaign raised over $20,000.
Not only did the co-founders validate the demand for their product, they were able to gather feedback and make their product even better. In 2012, the Swivl was the highest-rated device in the Last Gadget Standing competition at the Consumer Electronics Show (CES) and is now available for sale in the Apple Store.
There are many ways to raise money. Even if conventional funding fails, find the type of funding that is best for you and get your product or service out there!
Myth #3: You need a detailed business plan to start a business.
Too many entrepreneurs spend months locked away in their basements creating the “perfect” business plan with scenario planning and detailed financial projections. These days, markets change so quickly that you can never really know how customers will react to your product or service, or what new technologies will emerge that may significantly change the business environment.
For example, the two Columbia students who developed the LuminAID inflatable solar light had no idea how fast their product would take-off. With their simple but ambitious goal of making portable light affordable, sustainable, and available for everyone, they developed their product, launched an Indiegogo campaign, and raised five times their goal. They also received valuable customer feedback and got their lights produced. LuminAID lights are now being distributed to in-need communities all around the world.
The lesson here is simple: Don’t get caught up in the minutia of a business plan. Focus on getting your product or service in the hands of potential customers, get feedback and iterate quickly.