By Nathaniel Houghton

Entrepreneurship is in a perilous place.

Last year has been described as the most difficult year for startups in a decade and the 2024 outlook isn’t much better. Despite slowing inflation and planned rate cuts, experts predict continued economic uncertainty.

Reporting suggests that this volatility, coupled with funding logjams and a nearly nonexistent IPO market, could result in another hard year for existing startups and new ventures alike. These challenges paint a frightening picture for would-be founders, and may be contributing to reports that younger people are being scared off entrepreneurship.

While challenging market conditions have likely contributed to decreased entrepreneurial participation, it’s likely that another reason for the decline is unrealistic expectations.

Over the years, entrepreneurial “success” has become disconnected from reality. Decades of free or nearly free money gave us The Age of Unicorns. An overpopulation of startups valued at $1 billion became the norm, not the exception.

Meanwhile, stereotypical media portrayals attempted to convince viewers that all workaholic entrepreneurs strike it rich. Somewhere along the line we conflated lavish, all-or-nothing lifestyles and billion-dollar valuations with entrepreneurship.

It’s time for an expectations reset.

As it relates to company valuations, market economics is naturally taking care of tempering expectations. The state of the industry demands that founders and investors expect fewer unicorns. 

However, what’s equally important is ensuring would-be entrepreneurs don’t lose faith. In the face of seemingly endless challenges, potential founders have an opportunity to reset their expectations and view entrepreneurship through a clearer, more realistic lens.

Here are tips to help founders reset their expectations about entrepreneurship and ensure they get in the game.

Leverage your limitation: embrace authenticity

Entrepreneurial success isn’t about being the smartest person in the room. In fact, a fair amount of ink has recently been spilled arguing why the exact opposite should be true.

Instead of harping on intelligence or educational backgrounds, entrepreneurs should focus on honesty and self-awareness. By acknowledging strengths and weaknesses, leaders can build the foundation for authenticity.

This authenticity empowers entrepreneurs to assemble teams with diverse skill sets. By embracing limitations and building strong teams, entrepreneurs can foster an environment where innovation thrives.

The measure and expectation for leadership then shifts from monopolizing knowledge to wisely surrounding oneself with complementary talents. This departure from the myth of the lone genius toward cohesive teamwork is key to helping entrepreneurs on a path to success.

Avoid the perilous pursuit of perfection

To reset expectations, entrepreneurs should also discard the notion that success demands perfection for two important reasons.

First, the pursuit of perfection can act as a roadblock to business growth, interrupting entrepreneurs’ ability to think creatively and freely. Apple co-founder Steve Jobs — arguably the most successful entrepreneur in history — agreed, cautioning that a relentless quest for perfection can actually stand in the way of innovation and progress.

Second, the toll that perfectionism takes on mental health is significant. Research has found links between perfectionism and severe anxiety in the entrepreneurial community, with the pressure to meet unattainable standards often resulting in early burnout.

By letting go of the expectation to be perfect, entrepreneurs can instead embrace a more pragmatic and sustainable path to success and intentionally work to foster a culture of growth and innovation. Thus, the measure of success shifts from the unattainable to a dynamic journey marked by continuous improvement and meaningful achievements.

Embrace stoicism: empower action and risk-taking

Business leaders have long turned to philosophy for lessons in success.

One group whose philosophies are still deeply relevant for leaders today is the Stoics. Two of stoicism’s particularly relevant tenets implore followers to focus on what they can control and to take action.

For would-be entrepreneurs, this could mean acknowledging they have limited control over external events and the actions of others but complete autonomy over their own thoughts and effort. Within the context of resetting expectations, this concept holds immense significance. Entrepreneurs must acknowledge that setbacks and unexpected challenges are an inherent part of their journey.

Yet, embracing stoicism paves the way for an empowering shift in mindset. It encourages individuals not only to accept that things may not always go as planned but also to recognize that such acceptance liberates them to take bold actions and calculated risks.

By internalizing these insights, individuals can avoid the trap of overestimating downside risk and navigate the entrepreneurial landscape with a sense of inner calm and confidence.

Introducing ‘The 51% Principle’

If the challenges of entrepreneurship still seem daunting, fall back on “The 51% Principle.” This original business philosophy has been developed to provide leaders with two distinct lenses through which to view conviction and commitment on the road to entrepreneurial success.

First, the principle acknowledges that not every decision will be made from a place of 100% conviction. Rather, what’s important is taking action with determination, even if one is just 51% sure it’s the right path.

Whether focused on the viability of a new business, structural changes to an existing venture, or any other number of decisions, founders should shed the notion that they must always be certain.

The second lens of The 51% Principle examines the mundanities of entrepreneurship. The philosophy understands that not every day will be filled with unbridled passion and boundless motivation.

Entrepreneurship can be a grind, and on those days when 100% effort seems elusive, 51% is all that’s necessary. It’s the acceptance that some days all one can muster is that 51%, yet this consistent effort, even in its routine moments, propels the journey toward success.

By embracing The 51% Principle, entrepreneurs find strength in their choices and solace in the persistence of their efforts, improving the chances of transforming their ventures into enjoyable and sustainable pursuits.

Nathaniel Houghton is a seasoned entrepreneur and the co-founder and partner of Incendium Strategies, a leading B2B growth studio. Houghton has been recognized for his ability to navigate the intricacies of entrepreneurship and team-building with authenticity, simplicity and a focus on meaning as long-term success. He is also co-founder of the Congo Leadership Initiative, a nonprofit organization training young entrepreneurs in the Democratic Republic of the Congo.

Illustration: Dom Guzman

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• Source: https://news.crunchbase.com/startups/entrepreneurs-expectations-2024-houghton-incendium/