In hindsight, the first business I started had all the ingredients to succeed. I just didn’t realize it at the time.
I worked really hard and limped along for a few years, bringing in no more than a miserly trickle of cash, before finally throwing in the towel.
That failure had a huge impact on me. It wasn’t the business that had failed. I (me, personally) was a failure. All that work. All that wasted effort. The shame of giving up. For nothing.
Or so I thought.
Other than a total lack of experience (experience is something you get when you don’t get what you want) my primary mistake was not that I had failed but that I tried to avoid failure.
That was a hard lesson to learn. As were all six lessons listed here. Hopefully they might save you some pain.
1. Failure is Your Friend
Picture standing in a dark room. Pitch black. You can’t see a thing but you want to get out.
Hands out in front, you take a step.
Your shin hits the edge of something hard. It hurts, of course. But now you know something you didn’t before. There is an obstacle there.
You can either stand still and avoid being hurt again. Or keep moving.
If you stand still you won’t get hurt but you won’t ever get out the room either. If you move you will most likely get hurt again but you’ll learn more about the surrounds and, eventually, may find a way out.
That’s what failure is. A guide. A teacher.
Failure is a necessary part of the entrepreneurial process.
Always seek to learn lessons from your failures. In this way they become a pathway to success. The only true failure is not trying at all.
2. Time, Not Money, is Precious
Money is a tool used to propel a startup to its destiny — regardless of whether it is success or failure.
Think about it like this.
All other things being equal, would you rather spend two years or two months working on a business before it fails?
Building a website is a good example of where startups often choose to spend time instead of money.
Which scenario is better?
Spending a month developing a custom website for free before finding new customers.Spending a day setting up a site using a website builder with a monthly charge and finding new customers with a week.
Choose to spend money to save time wherever possible.
While we’re on the subject, it’s important to note that many paid services exist because they actually earn/save your business more than they cost. They have a direct, positive revenue effect.
3. It’s a Race to the Minimum Viable Product
Work out the fastest way to an MVP and begin testing it.
Traditionally a business would spend a significant amount of time and money designing and developing a new product. Product development, on an entrepreneur’s budget, is crippling (in terms of time, cost and effort).
It’s far easier to create a landing page that describes the product and offers a free trial or early adopter discount — as soon as it becomes available — for people who sign up.
Drive traffic to that page (yes, you’ll most likely have to pay for advertising to your identified target audience) and measure the response.
If a lot of people sign up it’s a good sign the product will sell. If no-one signs up it may be better not to invest months or years and thousands upon thousands of dollars developing and marketing it.
Either way, you’ve saved months, if not years, of time.
4. Make Money Fast
A vanishingly small number of startups actually make a profit. More often than not founders spend far too much time focusing on their product/service and far too little time securing a stream of revenue as early as possible.
There is no-one quite as demotivated as an entrepreneur with no income.
Understand how your startup will make money before lifting a finger.
Easier said than done, I know.
Know who your market is, what they want, and how to convince them to trust you and pay for what you offer. Win paying customers early.
A good business plan will surface information and data needed to find the shortest path to revenue. A residual benefit is that you may discover previously ‘hidden’ opportunities.
Perhaps there are different audiences you can reach out to, different uses for your product or service, different ways of marketing, and so on. There may be multiple streams of revenue available, or potentially valuable partnerships with other companies that can all help to drive revenue.
5. Build a Network Fast
I understand why people are hesitant to share their business ideas with family, friends and colleagues. There’s always the risk that someone will take the idea and do it themselves.
I concede that point. Although it’s still hard for other people to get to market — even when the idea has been stolen.
While there are risks, there are also advantages. Really big advantages.
Assuming the people you share an idea with have (to a reasonable degree) your best interests at heart, they will often spot angles, connections, and new potential that you won’t.
Different people have different social networks. They have different business connections. They have different information rattling around in their heads. They can bring tremendous value to your startup for very little time, cost and effort.
They might know your first customer. They might know your first investor. They might know how to save on costs. They might see other ways to make money from your idea. They might have equipment they don’t mind loaning.
This is far better than working in isolation where you aren’t exposed to new information, ideas and opportunities.
Force yourself to meet new people and find out what they do. Find out what drives and motivates them in their business/career. What problems and obstacles did they have to overcome?
The more you do all of this the more likely it is that someone will put a game-changing opportunity in front of you.
It’s not what you know.
It’s who you know, who they know and what they know.
6. The Business You’re in is Marketing
This is actually my favorite saying because it represents the biggest paradigm shift I underwent as an entrepreneur.
It doesn’t matter what business you’re in; the business you’re in is marketing.
I guess this only really makes sense if you understand that no-one will notice if you do something better than an established competitor. No-one.
It is quite likely there are startups out there right now doing something far better than huge, established brands. It’s also quite likely that most of them will fail and disappear before you or I ever hear about them.
Marketing consists of an incredibly broad array of concepts, disciplines and strategies, which is kind of a double-edged sword.
On one hand, the sky’s the limit. Be as creative and adventurous as you like. On the other, it’s expensive and time-consuming finding out what works best.
It’s worth exploring and learning about the following, predominantly online, marketing concepts and strategies:
Do not, under any circumstances, rely entirely on 3rd party companies like Google, Amazon or Facebook for marketing and promotions.
Don’t allow your business to rely on anyone else to the extent that losing that relationship may lead to failure. The Internet is littered with the carcasses of companies that relied too heavily on Google search traffic, for example.
Ensure your marketing efforts and revenue streams are diversified.