Advice from a Failed Startup FounderA 12 minute read
This business took everything. Two marriages. Two cars. Homes. Money. Sanity. Everything. How ready are you to open a business?
There is no founder on the planet who has lost absolutely nothing in the process of gaining success. If anyone has ever told you that, call bullshit immediately. I refuse to believe that someone opened a business, and shot to success without hindrance of any form. The reason why I say that is because a business is like a needy baby with an ongoing temper tantrum and never eats anything you prepare for it. Constant resistance. Hey, if you’re reading this and you somehow magically were able to open a business and not have the entire world pull you back, then hats off to you. Please direct me to the fairies who assisted you.
Am I bitter? Yes. My business went tits up and three people lost everything as a result, and we’re now all neck deep in debt, struggling to recover. But I am so very grateful for the experience, because it has taught me so much about myself, and about business, specifically how not to run one for future reference. Will I stop? No. This isn’t about winning, or success, or money. This is about life.
So, how prepared are you? I wasn’t, at all, in retrospect. I quit my stable day job thinking that this client we got, being the biggest beverage company in the country, would have been a career changing, life altering move. Big fucking mistake. We did everything right. Set up a limited liability company. Distributed equal shares. Had a solid business plan. Offered a service no one else did. Offered prices no one else did. Gave away a lot of free shit. We should have dominated the market easily. But we didn’t. And it’s taken the last three months for me to finally admit why, to myself mainly.
There are three people involved in this business venture. Out respect for their privacy, I will call them John and Tony. We all know who I am, and I could care less about privacy at this point. (I mean, this entire blog is about my life experiences and it’s not under a pseudonym.) Also, I’m glossing over a lot of the details here. This is two years of constant drama with no day being without some shit happening. So I have to just give an overview, unless you want to read a book, which I’ve not yet written.
Mistake #1: We rushed.
Timing was shit. We got the call on a Thursday to start working on a brand “ASAP”. My mother was having a procedure done at hospital the following day, so my head was pretty clouded with that drama. On Sunday, I was asked for a confirmation. I made a quick decision without being careful. I said yes.
Now, I wasn’t in an unstable financial position at this point, so it didn’t seem risky at the time. We (John and I) were okay. Just had a car on finance and did not have to pay rent where we were staying. But we could not both be working, as this client needed at least 10 hours a day from one of us. So, given that my job was with a company that was a little less stable than John’s, I signed and delivered my resignation letter to my General Manager the next day. I honestly thought this was going to work. I believed it in my bones. I was so very fucking wrong.
We weren’t foreign to the industry entirely, which is why we believed it would work. I had a business plan in my head already, since I was consulting over the last three years in this industry. I knew the competition, I knew the pricing, I knew the work load, I knew what resources we needed, I did not know the people personally, or the lengths some people would go to just to destroy you or snuff you out.
Mistake #2: We didn’t separate our finances.
This business was everything to us. So we did what every new founder does: we poured our hearts, souls, organs, and bank accounts into it. And we also stirred the two together. Never will I ever do that again.
We required a credit card for the business, but because the business was under three years old, we did not qualify for one, so you know what we, the big idiots did right? We used our personal credit card… YES, we made that mistake. Looking back, all I can think is, “Des, you stupid, stupid girl.” So, when clients did not pay on time, and this was our reality, we had to cop the bills. Which meant, we either paid the bills to keep the business open, or ate.
After a couple months of this, we had to make a tough decision. John and I reluctantly went to the bank to take the loan they had been offering us for months. Des, dig that hole girl, dig that hole. And it brought some breathing room, because we had car insurance to pay, and the credit card needed to be cleared. So, for a little while, we weren’t constantly looking over our shoulders in panic.
Now, this is about five months into the mayhem. Which also meant that I had not been paid yet. Which meant that John had been carrying all of the bills, just about, for five months, and some of the business’ as well. You can just imagine the pressure here. There were even days when we didn’t have enough money to put petrol in the car for John to get to work. Yep. All for the love of business. [insert snarky sarcastic comment here.]
Mistake #3: We didn’t really have a backup plan.
This ties into mistake one. We didn’t have a backup plan, because we didn’t think we really needed one. Yeah, if shit got bad, then we would fold, I’d go back out to work and call it a day. But that did not happen. In fact, the very linear plan we created never actually happened. Somehow, we ended up on the other side of the map, in undiscovered territory. Were we prepared? Fuck no. Were we happy? Absolutely not. Was this nightmare going to end? Didn’t feel like it.
So, we brought a third partner on board to help with the work load, since I was delivering a shitty product I was not qualified to produce in the first place (which really made me feel like a fraud to the point that I never wanted to leave the house), and I could not be in two places at once, so I can’t be at home at the computer and out there selling the service. Enter… Tony. Tony was a long time friend of mine, who was an experienced designer with lots of awards to his name. Tony was freelancing and looking after his newborn baby girl, one year old son and wife, when I approached him with the offer of being a part of the agency. His freelance business wasn’t doing too great, so he took me up on my offer. The risk was big, but so was the reward, and his talent and skill opened a lot of avenues for us. So this meant, we could do more… and make more money… HA. HA. HA.
This was not a part of the linear plan we had. This now meant that we had to hold our course, as there was now a very real risk of two children not eating as a result of us not getting the job done, or building the company. This was my motivation to get everything moving. And we were moving at a good pace.
Mistake #4: We were too hungry.
We were like blood thirsty ravenous wolves, which meant we took anything we got. We were desperate. We took work on for half the price, and sometimes did not even bill for it. And this cycle only got worse.
We did this for the love of the business and the brands we worked with. We got emotionally involved. Another fucking mistake. Getting emotionally involved in what you do gives the other person the upper hand. In the end, these clients easily turned around, after all the work we did for them, and went with a competitor, not because of quality, or even price, but because of nepotism. We trusted, and we never saw it coming. That hunger is blinding.
Don’t get me wrong. Being emotionally involved about what you do isn’t always a bad thing. It’s sometimes even a good thing. What’s bad is when the person you’re working with doesn’t share that passion and interest, and it becomes one-sided. Save the passion for your personal projects, and your own intellectual properties, not for the clients’. In the end, the only person who will lose is you. And you’ll lose big time. It’s a business, and think of it like that. That’s what we did not do.
Mistake #5: None of us were cut out for this kind of industry.
“Know who you are getting into bed with,” rings true here. I knew both John and Tony fairly well. I lived with John for five years and I knew Tony for an odd ten years. But did I personally really know them? Honestly, in retrospect, no. John and I had grown so far apart and neither of us really wanted to admit it for fear of being alone. Tony and I spoke once or twice a year, always about some business idea, but beyond that, we hadn’t spoken much in nearly 8 years. And John and Tony didn’t previously know each other. So, I was the common ground between everyone. And guess what? We all had serious trust issues.
To further compound that issue, we were all highly emotional creative people. We were all super passionate, but all suffered from severe depression, and were all quite volatile. Again, something you only see in retrospect. We all had our own personal issues which only grew with the stress of starting a company. Lots of hours had to be dedicated to this, and as tensions continued to rise, so did the number of and intensity of arguments. This was a business made up of two young families, on the brink of starvation and holding onto life by a degenerating thread.
Now put that combination with what was happening above. Add the fact that clients weren’t paying on time. Add in the increasing arguments. Add in the emotional attachment to our work. Add in the sacrifice of time and money for people who did not give a shit. What do you get? Chaos in its purest form. Everyone turned on each other in some way. And it all came to a head one night. I had enough and called it quits with John. This caused more stress between the partners and how we were going to separate the business. Within two weeks, Tony and his wife split up. It was nothing short of hell.
If I could do it over, what would I do?
Nothing. If I had to do it again, I wouldn’t. I wouldn’t open the business because I cannot work without investing myself into what I’m doing. It’s just how I work.
Today, I am 23 months into this nightmare. I am now finally able to sit up, and not be flat out on my ass. I’m not yet in a position to stand, or even think about crawling or walking. But I’ll get there.
Do I regret this? In some ways, yes, but as a whole? Not in a million years. I have gained some very valuable insight and hopefully, I can pass that on to you, so you can learn from those mistakes.
Now here is the interesting turn of events. If none of this happened, I would not be sitting in England, writing this. I would not have had that push to come back home and I would have been struggling with the same issues back in Trinidad. Also, by having these extreme circumstances, I’ve learned a lot about myself, the way I work, what really motivates me, and what I want out of life. It has also prompted a complete career shift, and has opened avenues I had not previously thought of before.
So, while it is a pile of shit and I feel like it was unnecessary and none of us deserved this heartache and stress, in many ways I am grateful for it, because it’s brought me to this very moment, where I can now, finally, build my life as I want it.
Another important lesson in all of this is my situation opened up a lot of avenues for me to see what people truly are. I’ve seen who I can and cannot trust and that experience and knowledge is invaluable. I’ve also seen how cruel people can be when all you’re doing is fighting for them. I’ve learned what real support is, what genuine people do and how to sift out the people who have a hidden agenda. I wasn’t completely naive to this before, but I’d be lying if I said I knew it could have been on this scale. Quite an eye opener this has been.
Take your time. Do not rush this. Write a business plan. Take six months to evaluate the market. Do not quit your day job. Think about what you are doing.
Start small. Do not quit your day job. Slow and steady. Do not depend on the money. Save as much as you can. Bootstrap everything. Outsource as much as possible. Don’t quit your day job.
Do not panic if you see a competitor pop up. Competition is good and healthy. See how well they do; it is an indicator of the market health.
Be passionate, but trust no one but yourself. Clients and companies do not have your best interest at heart. Always safeguard yourself. Do not get attached or emotionally involved. The world is very selfish, and it takes nothing for someone to pull the rug from under you. Trust in only you.
You are not a charity. Repeat after me. YOU. ARE. NOT. A. CHARITY. Do nothing for free, because people do not respect free. Charge full price. Stand your ground. Do not quit your day job.
Know your partners. This might be a bit tough as stress and certain situations can change this, but put as many safety measures in place if you’re not sure. Always be careful.
Have a safety net.
Do not quit your day job.