The problem is, Holmes wasn’t wrong. Successful entrepreneurship often requires an element of delusion from its founders – it’s what allows them to see potential where others see obstacles.

Buying books from a shop that only existed online looked pretty far out in 1994 and is now the ubiquitous Amazon. Inviting complete strangers to stay in your home sounded like the plot of a horror movie but ended up as Airbnb. A microblogging site only allowing 140 characters sounded unworkable… and maybe it was.

But in the exhilarating rollercoaster ride that is entrepreneurship, it’s important to remember there’s a fine line between being admirably persistent and digging yourself into an ever deeper hole.

My own journey as a founder began with a modest lawn-mowing business when I was ten and after one summer, I coordinated “my competition” (two other young lawnmowers) so we could equalise our pricing, expand our reach, and make more money to spend on candy.

I am now on my fourth and fifth ventures – the most successful to date being my international brand and marketing agency. It’s in this role I’ve had the opportunity to work with dozens of startups, their executives and investors

Which means I’ve seen first-hand the challenges that most trip up startups in the formative stages – and, with the benefit of hindsight, how a reality check could’ve prevented a lot of pain.

Here are the five most common of those “entrepreneurial delusions” – and ways to avoid being tripped up by them.

The “all we need to do is launch” delusion

Many founders get so obsessed with the idea of finally launching their product or service that they believe the act of going live will magically bring in customers, investors, and media coverage. The implicit assumption is that a great idea will sell itself the moment it hits the market.

Launching is, of course, a milestone – but it’s definitely not the destination. In fact, it’s more like the starting line of the marathon of real business operations.

Which is why your startup plan shouldn’t only take you up to launch day. It should extend for months after, outlining your marketing strategy and sales channels, and how these will be resourced.

It can be worth seeing your launch offer as a beta test rather than the final product. It’s great to love what you’ve done but to think it’s perfect is a delusion in its own right. Improvements should be ongoing and based on feedback from customers and real-world insights.

“I heard on this podcast they only invested [insert small number] in marketing” delusion

Startup lore is teeming with stories of overnight sensations and boasts of making it big with zero marketing budget. Consequently, you meet a lot of would-be entrepreneurs who are absolutely sure there’s no need to invest heavily in getting the word out.

I’ve noticed that these kinds of claims tend to appear in podcast interviews or posts on social channels – in other words, media unbothered by fact checkers – so I’m dubious. But even if they are true, the only learning from these kinds of stories is that sometimes there are lucky exceptions to the rules.

To avoid this delusion, consider the fact that for every “shoestring-budget success,” there are tens of thousands of ventures that went nowhere or struggled to live up to expectation. And then? Get working on that marketing plan.

You can work out a realistic budget by analysing your target market, competition, and brand positioning. The moment to invest small is when you’re in the testing phase – once you know what works, you can double down.

There’s a related delusion: believing that marketing is just a launch activity. It’s actually a continuous process of building awareness, driving engagement, and thinking not only about new customers, but also in terms of retention – something that is often overlooked.

The “we don’t have competitors” delusion

Loving your idea is commendable. Believing your idea is so unique that no one else could possibly be operating in the same space is deluded.

Even if there is demonstrably no direct rival, that does not equate to an automatic monopoly on customer attention and wallet share. Consumers almost always have other ways to meet their needs – often referred to as indirect competition.

Behind this delusion is actually a much bigger one: that it’s a bad thing to have rivals. I disagree.

Competitors stop us from becoming complacent. They’re actually really effective in keeping us aware of potential threats, meaning we’re not caught out when new entrants or substitutes appear. And competitor analysis is a great way to identify best practices and market gaps.

So embrace the idea that you’re not unique, and do the research to identify direct and indirect competitors alike. Observe their strategies, pricing, and value propositions to better position your own, and to understand what sets you apart. Then articulate that clearly to potential buyers.

The “founders should stay in the trenches forever” delusion

For understandable reasons, it’s incredibly difficult for some founders to step back from day-to-day operations, even when there are staff being paid to refine products, write code, serve clients and so on.

The CEO might not be deluded in their belief that they are the best coder in the organisation. But they are definitely deluded if they think that business growth will carry on apace without someone stepping back to gain the big picture perspective and to manage multiplying complexities.

Instead of framing this as “losing touch,” view it as ensuring that no opportunities are missed to leverage talent and scale effectively.

To get over any anxiety about loss of control, start making more specialist hires as well as recruiting people who are great at managing routine functions. At the same time, know that leadership is a skill you can learn – and invest time in studying how to lead at scale.

Stepping back doesn’t mean not staying connected either. You can still touch base with teams or test products regularly (but in small doses,) ensuring you remain informed without losing the broader perspective.

The “we need to be profitable” delusion

Some founders believe that turning a profit from the very beginning is the single most important measure of success.

This delusion can result in them pursuing short-term gains at the expense of building a stable base of customers and a reliable revenue stream, undermining growth potential as a result.

Ironically, during startup mode it’s more likely that investors will be looking at things like customer acquisition and the potential for consistent revenue, rather than profitability.

So take that persistence and self-belief that got you to this point and channel it into believing that investors aren’t going to abandon you if you’re not in the black immediately.

If they’ve been around the block more than once, they’ll understand why you’re reinvesting in strategies that increase your customer base and product value, and appreciate it if you emphasize metrics like MMR (monthly recurring revenue) or CAC (customer acquisition cost) to demonstrate that you’re growing your true market traction.

Passion, persistence and self-belief are terrific qualities for entrepreneurs. I’d even go so far as to say that it can pay off to be stubborn. But not at the expense of believing that scepticism equals disloyalty, or that great entrepreneurs never admit they’ve got something wrong.

So when you see potential while others only see obstacles, remember that taking a moment for a reality check isn’t a sign of weakness – it’s a way of ensuring that your vision isn’t just a dream, but a strategy for lasting success.

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