Young Successful Entrepreneur

85% of businesses fail within 3 years.

Out of 10 businesses that VC’s fund, 8 will fail, 1 will be a small success, and 1 will the the ONE big successes that generates the big money for investors.

There is so much failure going around that an entrepreneur can easily be discouraged to leave the shelter of his or her comfortable corporate life.  I was at the Startup Camp in San Francisco this weekend when it hit me: “I think I now understand one of the most compelling reasons that most businesses fail.”  (I’m not saying that I know the whole enchilada, but this is definitely one of the pieces to the puzzle)

Most people just never have a chance

What do I mean by this?  Lets dive in and see what I experienced with my very own eyes at the startup camp.

At Startup Camp, entrepreneurs were given the chance to pitch their idea to their peers and have their company voted to be the best startup company.  The winner got a new $4000 computer!  Yu-kai and I were going to compete, but like a bunch of lamos, we signed up after all the spaces had been filled up.  Anyways, Yu-kai and I sat down to listen to the 21 companies pitch their ideas.  We only made it to pitch #5.

I don’t want to be a mean person nor do I want to bash anyone’s ides.  After all, entrepreneurship is about hearing everyone tell you that your idea sucks and you do it anyways.  However, these companies DO NOT have the slightest chance of succeeding.  I say this because the idea itself is fundamentally wrong and the team is of low quality.

Here are some ridiculous things that people said during their pitch:

“We only need 1% of the market”

(A guy was reading off of note cards)

“We will beat Google, Yahoo, and MSN and become the number one search site”

“You all have one thing in common, you all want to change the world”

Question: “Are you planning to build an online community?”

Answer: “What’s an online community?”

One of the things I learned is to avoid using absolute statements.  There was a person talking about how Spam is the number one pain for people and their email.  After he said that I thought to myself, “Spam isn’t a problem for me, I have Gmail.”

More importantly, you need to find and focus on a significant pain.  “Spam” is not a big pain for me nor is “Searching for things on the internet.”  Google already has those two things covered perfectly.

What are some of the most ridiculous things that you have heard during a pitch?