The start and ongoing of a business can be rewarding and exhausting at the same time. Running a business successfully encompasses learning from mistakes that happen along the way which in the end, helps your business to be more strategic and to get back on track. We asked entrepreneurs and business owners about the tough lessons they have learned along the way.
#1- Not weighing how well our DNA fits into a product
My biggest failure was investing a significant amount of resources and energy into a product that I strongly believe the market needs and has great demand for, but it’s not suitable for our product development philosophy. What I failed to account for when I made the decision to pursue this product was how suitable our company is in developing and providing the product. As a company, our DNA is to create products with innovative technology and sound methodology behind them. We approach all our products with that mindset and our customers appreciate it. However, the product the market wanted, in this case, was one that generates good-looking results whether or not there is strong science behind it. All the hard work my team put in to get the science right did not generate the outcome I was hoping for, not just in terms of revenue generation, but from a product-market fit perspective as well. I learned a very valuable lesson with that mistake. Now when I evaluate opportunities for the company to pursue, I weigh how well our DNA fits into providing that product/solution very heavily.
Thanks to Gladys Kong, UberMedia!
#2- Created a tool that tries to do too much
A few years back, we launched a new tool called Retention Engine for the clients of our marketing business. It was an automated customer communication assistant that was designed to help our customers retain their customers. Trouble was, it was trying to do too much, it wasn’t really making the impact on customer revenue that we thought it would, and the system ended up being really cumbersome to manage. In other words: it was a big fat failure. But honestly, we don’t even think of it as a failure, we think of it as a necessary stepping stone to a better product and a better business model. Because once we stepped back and looked at why it failed, we realized that what we needed to do was create a separate solution that only dealt with the one aspect of Retention Engine that was actually making the needle move for our customers. Out of that failure, Closing Commander™ was born and it’s doing more for our customers than Retention Engine ever did or could. The lesson for us? Sometimes you have to take risks to see what works and what doesn’t. Sometimes you have to kill your babies. It’s painful, but if you’ve got a learner’s mindset and you’re willing to take what works and abandon what doesn’t, nothing’s really a failure.
Thanks to Taylor Hill & Carter Harkins, Closing Commander™!
#3- Going too broad
My biggest business failure was trying to market to every industry without a strategic focus. This lead to being too scattered to function as an agency owner. Once I narrowed my focus, I became much more effective, filled my pipeline with clients that I liked to work with, and became profitable. Going too broad as an entrepreneur can lead to failure quickly.
Thanks to Kristin Marquet, TheSplendorStudio.co!
#4- Failing to regulate when I delegate
One of my biggest failures came right after I learned the art of delegation. My online insurance agency was thriving and it was time for me to take a step back from writing for our blog. I hired a writer who came highly recommended from a friend of mine which lead me to put my guard down a bit. Everything was going great and she was pumping out content like the printing press. However, a few months in I noticed our site took a 60% traffic hit which almost wiped out the whole business. I had to let a few employees go, get behind on the office lease and go through all the savings. After some investigating, I found out that our writer was creating duplicate content by copying from our own and other similar blogs. It was a painful experience but it taught me to always do quality assurance no matter what. Luckily the site recovered and I now always remember to regulate when I delegate.
Thanks to Mack Dudayev, InsureChance Inc.!
#5- Not preparing for the fast growth challenges
Entrepreneurship is no easy job, as a matter of fact, it’s the hardest thing I’ve ever done and for the past 10 years I’ve learned a number of valuable lessons from it. Looking back, the biggest impact over the company’s productivity was shortly after we launched it. I was not prepared for the challenges that came with the fast growth of customer demand and very limited manpower. Combining this with the fact that the company is self-funded, resulted in leaving multiple projects behind, relocating project managers from one task to another and finding creative ways to sustain the business growth. The fail hit much harder than I expected and took a great toll on the company's productivity. This experience taught me to expect the unexpected. I've learned to always first prepare for various situations and outcomes and I try my best to analyse potential threats from both internal and external factors that may influence the business.
Thanks to Rune Sovndahl, Fantastic Services!
#6- Not intervening in a failing project
As a younger, less experienced CEO, I inadvertently allowed my team to fail on an important project. The tech world can be a complicated one, and our employees were overwhelmed by this particular venture, but I failed to truly recognize that and to ask the hard questions needed to turn things around. I hadn’t wanted to intervene because I thought that would embarrass my team and concern the client, but my approach led to the project being
less successful than it could have been and damaged team morale. The lesson learned: Communication is key, and your team and the client will both benefit from outside guidance when it’s needed.
Thanks to Chris Cochran, FreightWise!
#7- Intentionally growing faster than normal
My biggest business failure/lesson was my last startup, Wildfire. The company was essentially Uber for fitness studios and failed when a $12.5M funding round fell through. On September 22nd, 2015, my Board of Directors got a call from the Private Equity firm saying they were withholding the next tranche of investment (they already put in $1M), and that we would have to find other capital. We had a $250k a month burn because we were intentionally growing faster than normal and expanding our fitness network nationally, so it left us with limited options. They were trying to renegotiated us, and we didn’t accept the new offer and instead we tried to get a new bridge round together. That round failed, and we had to let go the 24 employees and all tell our users we were closing. It was like losing a child and I remember getting off the phone when we were forced to shut down and crying because I lost everything I had. It was at that moment that I vowed would never happen to me again, and I would protect other honest entrepreneurs from that same outcome. My biggest lesson learned from that experience is to start with companies that are already generating at least $1M in revenue because that is the hardest part. Most failure comes when entrepreneurs run out of passion and energy and that is why at CBDCapitalGroup we are investing in companies that are growing their revenue and helping those founders succeed when they are struggling to scale their business.
Thanks to David Metzler, CBDCapitalGroup!
#8-Doing business with a fraudulent factory
When I first started my business, Headbands of Hope, I got a loan from a family member for my first round of production. The factory we were working with turned out to be fraudulent and ran with the money. Needless to say, it was a tough moment. But that failure really set the tone for my work over the past seven years. I knew how much I believed in the mission of Headbands of Hope, so nothing was going to be too big to stop me. If you don't believe in the end result, failures would legitimize quitting. Anchor yourself in your mission because if you truly believe it, you'll always find a way to figure it out.
Thanks to Jess Ekstrom, Headbands of Hope!
#9- Several failures and lessons
I've failed in business and succeeded in business more than once. 3 of the biggest keys I've learned: 1. Avoid bank financing and personal guarantees as much as possible. 2. When you have multiple companies do not commingle funds. Keep everything separate so the entities are truly individual. 3. When you start grossing over $5M a year, you need to get audited financials. Without audited financials, you will never be able to sell or secure good financing.
Thanks to Mark Shandrow, Asana Recovery!
#10- Not being authentic
I had originally kept the ‘About' section on my website very businesslike. It was mostly about my education and degrees and a little bit of my experience prior to starting my business. But then while working with a marketing expert to improve my site rankings, I told her the story about how I got into nutrition in the first place. ‘Why isn't this on your website!' she said, ‘It's such a compelling story!' To be honest, I was a little bit hesitant and I didn't know if anyone would be interested, but she insisted and we updated my site to include more personal information. Less than a month later, I signed up a new client in big part because he read about my health struggles (I'm a nutritionist because of that) and had the exact same issue. ‘I have to work with you because you understand me' he said. Now, I won't make the mistake of not sharing my own experience again!
Thanks to Jana Mowrer, HealthWins!
#11- Three lessons from one failure
The second franchise I purchased, Super Suppers, failed in less than two years of opening. Now the entire business segment has evaporated. The biggest lessons I learned from the failure are: 1. Don’t start a business in an unproven industry. Super Suppers was a concept that allowed customers to come in to our store and make meals following our recipes, using our ingredients and taking them home in bulk and freezing them for a future date. Sounded great, everyone loved the idea however, we didn’t realize, that we needed to change people’s habits. Unless you have lots of time and money, changing consumer’s habits, especially when it comes to food, is tough. Blue Apron and other food delivery kit businesses are struggling now for the same reason. It sounds like a good idea however, once you get the kit delivered you still have to do the cooking and clean up. In a convenience-driven world, it’s easier to just order in Pizza again. 2. Another lesson is: Don’t start a business from the consumer perspective. Many people feel that if they start a business or buy a franchise that has to do with their hobby or because they like the menu or worse, there is nothing like this in my town – they may be in for a rude awakening. If you open a bakery because you’re a great baker and neighbors offer to pay you to bake their kids birthday cake, does not mean you should open a fulltime bakery. Stick to keeping it a side hustle. 3. Many know the axiom, if you love what you do, you never work a day in your life. Well that is true if you’re working a job. However, a business is not a job. Business is building a lifestyle that should give you the freedom not to take time away from your family and passions.
Thanks to Tom Scarda
#12- Not setting goals when starting-up
I discounted the importance of doing so and, as a result, did not have a clear strategy or path for growth. I learned that setting goals and tracking progress is important to building a business because it helps you make choices along the way that lead you to the desired successful outcome.
Thanks to Carlos Castelán, The Navio Group!
#13- Taking on everything that comes my way
My biggest failure (so far, because who know what will happen next?) is taking on everything that comes my way. I'm particularly susceptible to this with current clients. They make a request, and I ask myself Can my team and I do that? The answer is almost always yes, because I have a great team. Then my business gets pulled into a direction I don't actually want it to go. The biggest problem with this is that my business is consultancy. Consultants thrive on referrals. When I allow my business to get pulled in these directions, the referrals aren't nearly as valuable. Unfortunately, it's a pretty consistent failure. It's snuck up on me twice so far in different forms. As a result, I've had to refocus my business, and that includes letting clients go. I've learned that I need to evaluate every opportunity through the lens of my ideology and my vision for the future. Even if those opportunities come from current clients.
Thanks to Ruthie Bowles, Defy The Status Quo!
#14- Biting more than we could chew
Few years back we took a huge project for a client which was related to the emerging blockchain technology, once we got the project we realized that we actually lacked the resources to execute and deliver it and from there things went haywire, we tried everything, from outsourcing to hiring fresh resources, but it didn’t work out and we had to refund the first half of the payment. This major setback taught me to never bite more than I could chew and from that day I’ve been very selective when it comes to taking on projects. Business owners should always look into their arsenal before going to the front lines because at times things can turn out catastrophic.
Thanks to Asim Rais Siddiqui, Tekrevol!
|