One common similarity you will find among all entrepreneurs is failure. Failure is never a pretty sight but how you react and respond to failure is ultimately what defines you as an entrepreneur. While some may give up, others may embrace failure based on the fact that the learning experience is invaluable. Very few of us are successful with our first idea or venture. We have 21 people who share their first failures and what they learned from it.
Failure: Right out of business school I owned a Subway Sandwich shop in 1992. Only lasted a year and 1/2. I thought I knew better than the “success system.” Subway had a 98% success rate! Not easy to be in that 2%!
Lesson: Let go of ego. It’s challenging to be an adult learner. We set out to prove we know more than experts. Learn from people who are the best to save time. Take full responsibility. Let go of trying to look good.
Failure: When I first released my first book, it flopped, only selling 11 copies in the first month. I was crushed and wanted to quit, I figured out that my mission was to help people, not just make money.
Lesson: I focused on helping people and truly connecting with them through the power of my story, they then started buying books! I signed a 4 book deal with Sound Wisdom Books. I went from being self-published to having the book in print with no agent or book proposal.
3. Ian Aronovich of GovernmentAuctions.org
Failure: My first failure actually happened in college. I did not take it seriously enough and flunked out my first year having missed several of my finals, which was a huge disappointment to my family and really hit me hard. I decided to take it upon myself to rectify my situation.
Lesson: after taking asemester of community college I re-enrolled back in University and became an honor student with grades (an exam score) that were good enough to get me into a competitive law school. That little kick in the butt was all I needed to get on a clear path to success in life and in business.
4. Thursday Bram of Hyper Modern Consulting
Failure: My first attempt at entrepreneurship failed entirely. We focused on landing new clients and just weren’t able to keep up with the workload needed to deliver on what we offered those clients.
Lesson: It was a rough lesson to learn, but I found out that slow growth is the only way to go — if your clients aren’t happy, there’s no way to bring in any money. They’ll leave and your company will wind up with a poor reputation.
5. Jess Loren of Kambio Group
Lesson: I was still in college when I started my first company, ChiTown Deals. I was young, eager, and had little money, which meant that I made the mistake of skimping on the legal side of things. I had been working with partners and things had seemed to be going so well, but complications arose after the company was acquired within 6 months.
Failure: Since we didn’t have clear legal documents concerning agreements between myself and the partners, it became messy when talks about being sold started. It’s easy to overlook the importance of the legal side of things, but it is really important. Don’t risk losing out in an attempt to cut costs earlier on.”
6. Erika Salter of Salter Entertainment Group
Failure: As a small business owner, my first failure was launching my business in 2007 without a solid sales plan. I knew I had the passion, skill, and talent to run a business but I underestimated how necessary it was for me to know who I was selling to and how I planned on selling to them. The outcome was two full years of very slow sales growth within my business which caused me to have to go back into the workforce and obtain a full-time job while I developed a solid business plan.
Lesson: The lesson I learned is that no amount of passion and tenacity can make up for cash flow in a business. Unless your business is a non-profit, the goal should be to make a profit (and produce exceptional work within your given industry). Sales is the life blood of any business. Know your strategy.
7. Mustafa Khalifa of Boxer Watches
Failure: My first failure was trying to start a resource for players of the Official Premier League Fantasy Football game. My website was called FantasyFootballCaptain.com which is now defunct sinceI didn’t renew the domain and hosting. It failed because there was alreadya much better website available called Fantasy Football Scout and I tried to compete with an established website who offered a much better service than me.
Lesson: I didn’t realise it at the time but I had no unique selling point and apart from a strong domain name, I had no knowledge of SEO and so users couldn’t find my website. I realised that in order to succeed with my next venture,I had to offer something more. I could provide something that was already available, but it had to have some added value to it in order to differentiate myself from the competition.
8. Sharon Holzscherer of Mississippi School for the Arts
Failure: My very first company was a childcare referral company called Kids Care Network in California. The purpose was to match parents with childcare providers. It was a struggle because there was a large publicly funded monopoly which cornered the market. Sometimes it just isn’t the right time and place for an idea. Interestingly enough, about five years after we left California, similar companies started springing up all over. It floundered on for a few years and I did make connections which led to other opportunities.
Lesson: When you are doing something out of the box, it is critical to make your message clear. People make assumptions if you don’t explain exactly what you are doing. Now I run a private high school called Mississippi School for the Arts, just outside Ottawa Canada. I do not believe the school would exist if I hadn’t learned from the first company.
9. Mark Zhang of Slip Stopper
Failure: Lack of sales. People weren’t interested. The target audience was not clearly defined. The brand name didn’t have any equity, and people just didn’t want to pay the premium price for something they knew nothing about. The products also did not differentiate compared to competitors. We had intended it to be a premium product (as the unique selling point), but there are already many competitors on the market. We spent money trying to acquire customers and build a name for ourselves, but the sales numbers never materialized and we eventually ran out of cash.
Lesson: Focus is the most important thing. Start by creating just 1 product that meets a need that isn’t filled already on the market. Build the brand around this one product and make it the best it could possibly be, and then think about expanding. My mentor tells me the story of of the humble beginnings of large corporations like HP an GE. Their success all started with making one product and being focused. Startups need to avoid being the jack of all trades and master of none.
10. Justin Young of This is His
Failure: My first business was an eCommerce site that sold tanning lotion. Long story short I got hit with a cease and desist letter at age 19…I about crapped in my pants.
Lesson: From that I learned, just cause everyone else is using the same content doesn’t mean I can. I now run a digital advertising company called This Is His, in downtown Los Angeles, and the knowledge of what’s usable and what’s not comes into play almost everyday.
11. Sandip of Go Get Funding
Failure: The first website I created was called MrStinge.com and it was a huge failure! I spent every waking hour for several months creating hundreds of pages of content – I wanted to build the ultimate personal finance site. However, after around 5 months I realized that the scope of my project was far too big. Also, I wasn’t doing anything new – my site wasn’t differentiated enough. Also, functionality-wise, it was hard to use.
Lesson: It was emotional but I decided to let that go without fully launching.
12. Erica Duran
Failure: I’ve had many failures over the past 20+ years as an entrepreneur. My first one though was knowing that I wanted to be an entrepreneur but being a little too afraid to do it all on my own so I joined several network marketing organizations. They never worked for me because it wasn’t my idea – I’m an entrepreneur and therefore control freak.
Lesson: These failed attempts turned out to be a blessing. Nowhere in the world can you learn the “grass roots” of business than when in a network marketing company. You learn so much about face-to-face sales and these companies always have so much on-going business training for free or a small fee. I now specialize in coaching time management and productivity to those in network marketing companies in my own business.
13. Brandon Medenwald of Simply Made Apps
Failure: My first failure was quite epic. I started a golf tournament tracking website called Hole in 6. At that time (4 years ago), there wasn’t anything as detailed and user friendly anywhere on the internet. It allowed for complex search queries, gave credit to contributors, and looked great. The trouble was, no one used it. Each user was gained via word of mouth advertising by myself. This site also relied on advertising income, which is virtually zero when no one is using the service. After spending gobs of money on hosting (because I was sure this would be a hit), I moved it to a small-time server and 18 months later, it went under all together. Gross profits during 2 years of operation: $12.
Lesson: The lessons learned were many. First of all, don’t ever believe that building a cool internet startup guarantees people will find you. If you build it they will come will kill your internet startup right quick. Second, don’t invest in tons of capacity without having a solid customer base. With Hole in 6, the amount of money spent to host the site was enormous for almost no users. Start small and ramp up only when necessary. Finally, sell a product that users will pay for. Relying on advertising is a bulk business, requiring large amounts of traffic. If you don’t have that traffic, then you’re DOA. Build a nice product, charge money for it, and back it up with great customer service.
14. Caitlin Cota of Pure Perception PR
Failure: My first failure as an entrepreneur was thinking I was actually ready to be an entrepreneur. I’ve always had an entrepreneurial spirit and was overly eager to work for myself and create a business that I was passionate about. As a publicist, this seemed achievable considering the start-up costs, resources, etc. needed to do PR are limited and dependent upon who you know, not what you have.
Unfortunately, I let my ego get in the way and my over-confidence eventually led to the realization that I needed to spend more time in the “working world” in order to build an adequate foundation before trying to do it on my own.
Lesson: Overall, I learned that it is “okay” to not know everything and it is not a sign of weakness to value the guidance and wisdom imparted on you from your colleagues. When you work for someone else, you have the advantage of not only learning what to do in business, but more importantly what NOT to do. You are given the ability to sit back, observe and take mental notes all while avoiding the stress of owning the company. At the end of the day, the experience I forced myself to gain has paid off exponentially in my entrepreneurial endeavors and I’m glad I was able to swallow my pride to achieve success.
15. Diane Hansen of Hansen Marketing Communications
Failure: The first time I started Hansen Marketing Communications, I was overcome by something first-time, full-time, entrepreneurs feel – self doubt. Can I REALLY do this? Will I have enough money to survive? By setting my goal as survival and not to thrive, I backed myself into a corner. I didn’t have business rules so I had no barometer on whether or not a client was worth the time.
Lesson: As a result, I one-off projected myself back into the full-time world. It’s important to set clear business rules for yourself and KNOW your business’ identity as you launch. Don’t set yourself up for survival. Set yourself up for success!
16. Andy Henriquez
Failure: Back in 2005, when I first left corporate America someone pitched me on a real estate investment opportunity in Costa Rica. Excited and eager to make my first major investment as a real estate investor, I flew out to Costa Rica to go see the possibilities. Shortly thereafter, I invested a majority of my savings, over $40,000 into a real estate project.
This would turn into a total failure. The land that I thought I was acquiring turned out to be 1/4 of the size that I thought it to be and it turned out to have multiple other owners that I was unaware of. All my legal documents were written in Spanish and I trusted the person who introduced me to the opportunity to interpret everything for me. I lost my entire investment and I had no recourse as my documents weren’t worth the paper they were written on.
Lesson: Since that time, I have learned that as an entrepreneur you have to take full ownership and responsibility for all your business decisions. Both the good ones and the bad ones. You can’t place the blame on anyone else but yourself. Once you take ownership, you can gain the lesson from the experience and you can start working on turning your situation around.
17. Jeff Kear of Planning Pod
Failure: The name of the failed venture was My Icon Design (the Web site is no longer in operation), and we offered a quick-turn online logo designs for small businesses. It failed because, although we received enough customers to make a decent profit, the customer support was wearing us thin. We had thought that all our customers would be at least somewhat savvy about the design process and working with a design company, but we quickly discovered that only about half were, and the number of revisions and extra work we were doing was eating into our margins.
Lesson: What we learned from this experience is that we had to build a business that enabled us to support all types of customers – from the novice to the expert – with a small support staff and make self-support intuitive.
18. Rick Rudman of Vocus
Failure: Rick Rudman started Vocus with a friend in his garage in 1992. It was a government relations product. In 1996 a larger software company focused on the PR industry offered to buy the company for $5.8 million. Looked like a done deal. An exit. Success.
Then the buyer backed out. The deal was off. Government relations was a limited market. Rick figured, if he couldn’t beat them – he’d join them.
Lesson: He pursued the same PR market as the would be buyer. And through the last 20 years, he’s largely succeeded. Revenue grew 53% in Q2 (this past quarter). His company went public in 2005, trading under the NASDAQ ticker VOCS, topped $100 million in revenue in 2011, and now he’s become an acquirer. Vocus has made a string of acquisitions in online and social media companies the last few years: PRWeb, Help A Reporter Out (HARO), North Social, Engine 140 and in Q1 of this year made its biggest bet ever – the $169 million acquisition – of email marketing company iContact.
19. Bryan Silverman of Star Toilet Paper
Failure: As a co-founder of Star Toilet Paper, a niche advertising company, it is essential that I wear many different hats and am able to perform the duties of any position in the company. On one of my first sales calls, to a local pizza place, I remember saying the first part of our script and going, “Hi. My name is Bryan Silverman and I run a local advertising compa-” They immediately hung up after I said the word advertising and I was heartbroken. I thought it was just completely rude and it really hit me hard. My brother, who had been making calls for a few months at that point, told me I was being ridiculous and could not even count the number of times that he has been hung up on.
Lesson: This was an important lesson for me to learn. It was not only that this was going to happen to me often, as many business owners hate receiving cold calls, but it also taught me that I cannot take no personally. People are not saying no to me, they are saying no to advertising or to our business concept. In addition, I learned not to take no as an answer. Business owners normally obey the law of inertia, where they do not want to change what they are doing at the moment simply because it is easier not to. However, many times when an owner or marketing manager says no, they simply mean they do not want to change what they are doing. If I am able to convince them that adding us to their marketing plan is not such a grand change in the scheme of things but could have a huge positive consequence, they are more open to listening to the idea and the multitude of benefits we offer.
20. Melissa Picoli of BijaBody
Failure: My first failure was a salon/spa. I failed because I thought “understanding every cost” was boring. Money came in, money came out, and it all seemed to balance for a few years. Until I needed to grow, and couldn’t. And of course, because I wasn’t keeping perfect record of everything, I couldn’t get investors.
Lesson: This time around, I’m a stickler. I believe in book-keepers and acocuntants, of course, but you have to know your own numbers. If you can’t move around your accounting software yourself, eventually, you might fail. Probably will. You have to now the numbers. Passion counts for a lot. Understanding numbers ensures your passion has some structure, and has a real shot.
21. Dayne Shuda of Ghost Blog Writers
Failure: My first failure was a business called HunterShare. I has visions of creating the “MySpace for Hunters”. The site crashed and burned big time. I wasted a lot of money and made some really bad choices. I had no idea what I was doing. Looking back now it seems like it was a lesson that had to be learned. This was around 2006-2007 and there was a huge growth in social media. It seemed easy. I think in some ways it was, but the tip was that it’s never really easy to start a business.
Lesson: You have to jump in and make mistakes and learn from those mistakes. If I had never started HunterShare I don’t think I would have started blogging, which has led to my current and successful business – Ghost Blog Writers. For some the failure of HunterShare would have ruined their confidence. It certainly shook mine, but I just kept trying things until something worked. Maybe the tip is perseverance.