Back when I first dabbed my big toe in running my own business, I can honestly say I didn’t know what I was doing. But I was doing something and to me that was the most important thing. It didn’t matter that I didn’t have an MBA or formal education in business, I had an idea, a passion, a dream and doing something was better than nothing in my mind.
My first venture did quite well for a few years, but only before it came crashing down taking almost everything I had with it.
Basically we (I had roped a partner into the venture by this stage) had completely mis-read a new target market. With the egos of success behind us we threw everything into breaking into this untapped market. Alas what worked beautifully in our original market was completely dead in this new one.
As a result we had overestimated the number of sales. Therefore we massively over committed our time and sunk too-many-thousands in to a fat marketing campaign that just didn’t work. We also outsourced parts of marketing that made us so successful in the begining.
Our sales were 20% what we wanted and only 40% what we needed. I had gone from being miles in front to miles in debt in just a few short weeks – it was horrible! I lost friends, I lost heaps of time, I had almost lost the family car and I had definitely lost a lot of money.
But I would do it all again.
That particular failed effort hurt so much, but as a result I’ll never forget the lessons I learned from it. The lessons are worth the sacrifice I went through to learn them, this failure was my Himalayan Temple I had to climb to reach enlightenment and I’m so glad I got it over with early.
1. Research. Thorough research would have helped us identify the differences in the markets and would have driven a different solution, we didn’t do it.
2. Who’s money? Going into debt for a business is often a good thing, but it’s better to use other people’s money for two reasons, one – it’s not your’s and two – if you can can’t convince a third party investor to invest, it probably needs a little work.
3. Risk, Chance, Probability. I never seriously considered the consequences of any of these, but since then, before almost everything I do I perform a snappy risk analysis.
4. Keep your skills to yourself. In the early days it’s best to do what you do best and outsource your weak areas (Robert Kiyosaki says “employ people smarter than you”) We outsourced a significant part of what made us successful – no one is as committed as you are.
4. Egos. Perhaps the most important lesson. Our egos got the better of us and we believed our names would carry us forward into a new marketplace, we should have pushed past our egos and let our rational minds deal with the marketing instead.
So if you’re just starting out, take it from me, don’t worry about failure. When it comes, embrace it, be angry, yell at the cat, and take the lessons learned and move forward.