What I learned from failing in business 4 times
For the first 23 years of my life, I was terrified of making mistakes.
Failure meant that I was a bad person. It was something shameful that had to be hidden from my peers, my family — and even myself. In the education system, there is a subtle conditioning that students who get lower grades are the “bad students,” and I wanted more than anything else to not be among their number.
I recall getting 90% in a Geography exam at the age of 10 and feeling like it was the end of the world. A few years later, at the age of 14, I was mercilessly teased by my peers for getting 7/10 in the first History test of the year.
As an adult, you rapidly learn that what is true in school is rarely true in the real world. In life, as in business, I’ve come to see failure as (often painful) learning in disguise. It’s no longer something I feel I have to hide.
In this post, I want to share the major lessons I learned from my first four failed business ventures. Perhaps it might help you avoid making the same mistakes that I did.
1) Ideas are meaningless without good execution
In 2013, I was working as a communications consultant in London. The hours were long, the pay was mediocre, and the work was bureaucratic and tedious. After a dispute with my line manager in which I felt disrespected, I decided to quit and do my own thing.
I had been working on a business idea in my spare time for a few months. It was called GovMakr: a social network designed to introduce direct democracy to the UK. The idea was to take conversations that were happening in private between politicians (Govs) and engaged citizens (Makrs) and put them on an open, publicly accessible platform. Public policy would be determined on the basis of which ideas were upvoted the most.
A noble ideal, but one that I was hopelessly underprepared to execute.
In my arrogance, I was so convinced that my idea would be a success that I told almost no-one about it for the first few months— not even family. I resisted hiring a cofounder to help me (until it became clear that I would not survive without one) and isolated myself in my bedroom, building wireframe models and conducting market research with politicians.
What I learned is that ideas are of very little value in the business world. The world and his aunt have a business idea, or a book that they want to write some day. What matters is the execution, so answering concrete questions like:
- How are you going to sustain the business financially?
- What value are you going to deliver to customers?
- How are you going to deliver that value?
- How are you going to find leads?
- How are you going to convert leads into customers?
- How are you going to capture payment?
Indeed, by not sharing my idea with fellow entrepreneurs, I isolated myself from valuable feedback that might have allowed me to execute my vision more effectively.
Behind my grand plans for the business lay a good deal of fear of judgment and failure. Perhaps that was the real motivation behind my silence.
2) Analysis paralysis: just doing something is better than waiting for a perfect plan
After GovMakr ran out of money, I joined an app startup in Berlin called Comeet as the Head of Marketing.
Comeet was a social app that aimed to connect like-minded groups of people in a given location. Like with Tinder, groups were able to swipe right if they liked the look of another group and swipe left if they didn’t. We marketed it as “Tinder for groups, without the sexual part.”
As with GovMakr, a decent idea, but one we had no idea how to take to the marketplace.
I spent all my time at Comeet coming up with marketing plans and putting them past the CEO. There was a launch party, a flyer campaign, a plan to build partnerships with local bars, brand ambassadors, some digital marketing… you name it, it was on our list of things to try. I wrote an impressive-sounding marketing schedule so that everybody knew what to do when, and so that the marketing launch would coincide with releasing the product in the App Store.
The only problem was that we spent so much time planning that nothing ever happened. We resisted collecting feedback from real-life customers about our idea (there’s that fear of failure again), preferring to endlessly tinker with the marketing plan until our funds ran out.
This is a classic example of a phenomenon known as “analysis paralysis.” We were so preoccupied by analysing the different marketing possibilities that we were paralysed and took no action.
In all my marketing activities today, and in those of my clients, I avoid this phenomenon by adopting the mindset that doing anything at all is better than waiting around for a perfect plan. That’s not to say we have no plan at all — clearly that’s not a good idea either. We simply take as much action as possible and strive to integrate the learning that results into our future plans.
This has led to a good deal of trial and error, or “learning by doing.” Many of the marketing strategies I’ve tried have failed, but that learning is preferable to analysis paralysis.
3) Cashflow is king in small businesses
Having learned a fair bit about marketing and building relationships, I decided that my next venture would combine these interests in a Youtube channel. My aim was to impart knowledge about healthy communication and hope that a small sub-section of my audience would reach out to me for paid coaching. I put all my energies into creating quality video content.
What I didn’t realise at the time is that building a profitable marketing funnel takes time. Even making your first dollar takes longer than you think it will, let alone becoming profitable! The longer the project dragged on without anything in the way of financial return, the more precarious my situation became and the greater my stress levels.
The key lesson here is that cashflow is king in small businesses. Unless you’re backed by a Silicon Valley investor with an 8-figure net worth, you need to make your first sale as soon as you can to ensure that your money doesn’t run out.
The Lean Startup framework has helped me understand that pitching a minimal viable product to real leads is a much faster path to sales than barricading yourself in your office designing products that no-one will use.
Resolving to make my first sale as quickly as possible, I abandoned the Youtube idea and threw myself into a business course I had found through my network.
The business model I chose is called dropshipping. It involves shipping products bought online directly from the supplier to the customer, without the cost of storing them in a retail environment. It has the potential to be profitable within a few months, and I had a proven methodology that I was able to follow.
Unfortunately, I ran into exactly the same problem again. Setting up a marketing system took time and energy that I didn’t have. I was broke and drained from my previous exertions, and was frustrated by my lack of traction. I needed cashflow immediately.
So I asked myself: what skills do you possess that you can immediately put to use serving other people? Coincidentally, at the same time I was helping out a good friend with writing job applications. She told me I was a good writer… and the rest is history. I made my first sale within a week.
- Ideas are meaningless if they’re not being implemented
- Taking an imperfect step forward is better than analysis paralysis
- Look to make your first sale as soon as possible
I hope this is of value to a fellow anxious perfectionist out there 🙂