Every failure has learnings for us. We refer to these learnings as “experience”.
Experiences or learnings either transform us into better entrepreneurs or they break our confidence and take us away from the path of entrepreneurship.
I have been a part of multiple ventures and have had my fair share of failures and successes in past. (more of failures and less of successes)
Have I always learned from my failures?
No. In fact, I have repeated the mistakes which led to the failures. Only to fall flat on my face and regret, not learning from the past.
But whenever, I have made an informed decision of not repeating my mistakes – the losses have reduced, and my ventures have done better.
One of the ventures which I started in the initial days of my entrepreneurship was a business portal for wedding planners.
The venture was started with few friends from college. Good, like-minded buddies, who believed in the idea.
The venture failed within 6 months of its launch. Since the venture was bootstrapped, all the founders lost a substantial amount of money. Personally, I lost a lot of confidence along with money.
Who was responsible for the failure of venture?
All the partners contributed in some way or the other to the failure.
There were a lot of lessons to learn from the failed venture. Some of which I implemented in my next venture, which has survived for good 7 years. I would go as far as to say that “I attribute the success of my current venture to the failure of my last venture”.
Here are me learning from my failed venture which helped me succeed in my next venture:
- There is no business like a “part-time” business:
We all love to multi-task. A skill, we think is essential for us to survive in today’s world. Unfortunately, the skill fails miserably when you try to run multiple small businesses without giving a proper ownership of a small business to one of the partners.
In our case, all the partners had their existing businesses. The new venture was everyone’s business and no one’s business.
Since there was no full-time owner of business, the decision-making process was slow. Employees had the time of their life and we lost money.
I promised myself to never get into a venture which does not have a full-time owner.
- Too much pivoting is not advisable:
In his book Lost and Founders, Rand Fishkin advises businesses against pivoting frequently. The problem with pivoting, he explains is that you end up losing all the effort (time and money) you have spent getting the business to a certain point.
In our case, there were frequent pivots which led to a product that was nowhere near our initial idea.
By the time we launched version 3.0, we had lost direction. The portal looked so different than we had envisioned that none of us could relate to the idea and product we were looking at.
In my next venture, I did pivot at times, but the pivots happened, only after the first working version gave us some revenue and we were sure that we were on the right track.
And we made sure, our pivots are limited to version upgrades or minor changes. We never changed the concept on which the business was built.
- Never work without a Plan:
When I started my entrepreneurship journey, we relied more on instincts than logic. We trusted our business sense more than business plans.
That’s what you call as immaturity.
When the business went south, we had no plan with us to make it profitable.
It was a lesson learned the hard way.
- the emotional stress of entrepreneurship
When they say “It’s a lonely world at the top”. You got to trust them. Working 12 hours in a day under heavy emotional stress is no fun. There is definitely a price for every entrepreneur to pay.
I call it the dark side of entrepreneurship.
No one talks about it and no one wants to hear about it. We all are too busy chasing the dream, forgetting that we are human.
In my first year of venture, i worked around the clock without any fun time or as they refer to as “me time”. The work took its toll and despite working 10+ hours on daily basis, the efficiency was its lowest.
Today, i shut down everything related to business for 2 to 3 hours to unwind. An evening walk, yoga and then my savior Netflix helps me recharge the batteries.
Over the years, I have learned to set up plans for every small thing. My financial projections include business generation, revenue and operational cost are always set for a minimum duration of 6 months.
Today, every small business I mentor. The first task I ask them to do is “Create financial projections for next 1 year” and then I ask them to use this as a base point to compare their progress with the targets they had set for next 1 year.
There are times the plan becomes redundant as it is replaced by a new plan or the plan evolves into something entirely new and I am perfectly okay with that because at least, the first version acted as a starting point for them. A base on which they evolved or built upon their new plans.
- Never Overestimate your idea:
To be confident is good. To be complacent is stupid. We the company founders are at times, so blinded to the reality that we refuse to see the obvious.
There are times we spend all our effort building products, we think are the best.
We forget – it is not us but clients, who are going to pay for the product.
That’s what we did with our venture. All four of us loved the idea. No doubt, the idea was good. Still, it lacked a market research.
Unfortunately, all of us were too much in love with the idea to see the obvious.
When we took the first version to prospective clients, they could not relate to what we had built.
Again, this led to pivots which led to us going off track from the initial concept.
Today, when I meet teams working on ideas i ask them to be critical of what they are building. When they have found N reasons not to build the product, I ask them to find 1 reason they should build the product.
Then I ask them to validate their reasons with actual customers.
The real feedback they get at the initial stage of their ventures helps them save a lot of money and time.
Small bootstrapped Businesses are different than big as they do not have the luxury of spending too much time and money on anything. What I have listed above are simple learnings I gained from my failed venture.
Some of them were catastrophic and they left me with enough experience to not sink my next ship. Others – contributed to helping me run my next venture.