Smart people learn from their mistakes. But the really sharp ones learn from the mistakes of others.

There seem to be two main misconceptions among new entrepreneurs that increase the possibility of failure.

Misconception #1 — Once you have an idea, look for investors

Are you familiar with the business phrase, “ideas don’t matter, only execution does”?

While it may sound harsh on the surface, the truth is that nowadays a good idea doesn’t always cut it. In a world where everyone thinks they’ve come up with the ‘Next Big Thing’, standing out from the crowd and bringing an idea to fruition can be difficult to achieve.

Investors hardly ever invest in ideas. They are looking for traction, ARR (Annual Recurring Revenue) growth, the CAC (Customer Acquisition Cost), the gross margin (revenue and cost of goods sold divided by revenue), monthly recurrent revenue and more.

You can understand that if you are at the idea stage you don’t have answers to any of the above mentioned metrics. All you might have are guesses which are not enough for someone to invest in you.

You need to remember that when you ask for money, you are in a weaker position than your investor. You should create something that people want and pay for, to improve your position and decrease the equity you will have to give away for the asked amount.

Misconception #2 — Once you have an idea, build your MVP

That’s a classic mistake that almost everytime it leads to failure.

42% of startups fail because there wasn’t a market need.

Founders thought that they are about to build the “Next Big Thing” but there wasn’t a big enough market. Or, there weren’t enough people to pay for what they’ve built. Or, there weren’t enough people to pay for such a product or service.

Once you get an idea you need to evaluate it with your potential customers. I know it’s easier to ask your friends and family about it but in most cases they are not your customers. In addition, they are willing to lie to you to avoid hurting your feelings.

During your discussions with your potential customers it’s important to remember that you should focus exclusively on the problem and not on your solution. Your goal should be to learn everything about the problem from the people that face it.

I strongly advise you to make a list of questions before your meetings. What’s important for you to know to better understand their problem? Avoid closed-ended questions and after every meeting review and update them. Meet as many as you can before you write even one line of code, before you even look for a co-founder or a team. Your potential customers will give you the green light to proceed with your idea or not.

Based on your conversations with them, you’ll be able to create a Minimum Viable Product which is Valuable too.

Misconception #3 — You can make it on your own

First of all, investors hardly ever invest in startups with one founder (solopreneur), and there are quite a lot of valid reasons for that. It seems that:

a. Your vision is not attractive enough. If you’ve failed to find any of the people in your inner or extensive circle to commit to your idea, most likely you’ll fail finding customers too.

b. You don’t know how to work in a team. Not being able to work in a team means that you won’t be able to cooperate with the investors. Oops…

c. You are selfish. You are not ready to share the glory (if any) with anyone. Being a selfish non-team player is not so attractive for investment, is it?

d. You don’t know how to recruit. As Phil Knight, founder of NIKE, put it on his autobiography “Shoe Night”: You will need fanatic team members. It seems that as a solopreneur, you cannot do that either.

Any other misconceptions that are worth mentioning?

Good luck!