Spoiler - it’s not COVID.
If I knew exactly why my startup was failing, then it would not be failing...Right?
But one thing is without a doubt; my failure so far is not COVID’s fault. Believe it or not, this startup actually came to fruition because of COVID. Granted, starting a business during a pandemic might not be advisable, but my business is failing for one reason alone – me.
Now, before you start to feel sorry for me, let me share a bit about myself.
I subscribe to a worldview of radical responsibility. In the book, The 10X Rule, Grant Cardone put it like this,
“Nothing happens to you; it happens because of you.”
I think this statement is a window into each of our worldviews. Each of us has the ability to add value and goodness to those around us through our relationships. Playing the victim and constantly blaming something else for our failings isn’t helpful to anyone.
Jocko Willink calls this “Extreme Ownership” – and wrote a book about it. Simon Sinek even talks about it in his book, Start with Why, when he says,
“Leadership requires two things: a vision of the world that does not yet exist and the ability to communicate it.”
What is your vision of the world? I see a world that isn’t continually ravaged by COVID-19. That’s not to say that I hope it quickly fades into history – actually quite the opposite. I hope that we grow and unite and become the types of people that can thrive through any adversity. Most importantly, I know that I have a part in that change by taking responsibility for all of my actions – failures and successes alike.
Before you read any further
This is one of my attempts at communicating my vision of the world with you. So far, my attempts at building a business have gone pretty poorly, but I’ll happily take full responsibility for all the failures.
This is not a sob story or an analytical breakdown of all the business and marketing principles I broke. More than anything else, this is an amusing tale of my first attempt at starting a business. I’m masking the name of the business, and I’m not going into detail about my team to add a layer of privacy for us all.
I sincerely hope this inspires you to spread your vision of a better world! I’m learning that failure is ok – it happens to everyone. Quitting, on the other hand, is something else entirely.
How my failure started
Everyone's life has been a whirlwind since COVID-19 dug its claws into the world. Like a lot of people, I lost my job early on in the pandemic. I had been a software and web developer for the previous seven years, so I figured it would be easy to jump into the freelance world. After all, the entire world was going online – so how hard could it be?
Hard...it was very hard. You’ll notice my blind optimism will be a common trend.
I struggled to quickly learn all of the auxiliary skills that it takes to be a freelancer. The truth is that I didn't really want to learn them. I didn't want to be a freelancer and work by myself all the time. I wanted to lead and develop a team and start my own business.
Books fueled the fire
A couple of years ago, I resolved that I wanted to be more active in self-growth, so I started reading. I hated reading in high school and college, but I've come to love the ability to reach into people's minds and learn from their experiences. I quickly found my favorite type of book: “straight-talk” about leadership and business.
I've always been a little taken by the topic of leadership. Maybe because I've encountered so many poor leaders in my life and that makes me want to be an amazing one. Maybe because there is no right way to be a great leader. Maybe because I enjoy power and prefer to be in the driver's seat most of the time.
These books opened my eyes to a world that was so much bigger than the one in which I lived. It was a world of radical responsibility, business ownership, discipline, and continual learning. But the intelligent and passionate minds I was reading didn't have it all figured out. They had been tested by fire and struggled just like the rest of us mortals. The more I read, the more humanized these individuals became, and I began to realize that I could learn from their stories and forge my own path.
Success was going to be easy
The idea of being a self-made man and a great leader is intoxicating to me! So when I was let go from my job of seven years, I knew I wanted to become an entrepreneur and start my own business. I wanted to test out all of the things I had read about and learned over the past couple of years.
The word “entrepreneur” is a super-buzz-word right now. It seems like everyone wants to be an entrepreneur, and the one million people selling courses on (use your infomercial voice) "How to make $1 million dollars with THIS SIMPLE HACK" seem to be making it easier than ever. I figured with my driven nature, desire to hustle hard, and book knowledge, it would only take a great idea before I was a success.
I found the million dollar idea!
Not too long into my freelancing career, in which I had booked zero gigs, an old friend asked if I could build a web app for his non-profit organization. They wanted to have in-person events and needed a tool that would help them socially distance their seating and limit their capacity. I thought it was an incredible idea! During our second meeting, I negotiated owning the intellectual property (IP) to help other non-profit organizations with the idea. He was happy to relinquish the IP, and I was off to change the world!
His organization, however, was not thrilled with the amount of money I was requesting to build the application. Even with a heavily discounted price, almost 50% and free lifetime use, the organization said no; they opted to wait until I had built the program on my own. Needless to say, that was not the outcome I had hoped for, but I was excited to have a seemingly great idea to work with.
In hindsight, this was a sign of the struggle to come. Even the originator of the idea didn’t believe in it enough to invest. They quickly found a cheaper solution that seemed to solve the problem.
But I was convinced that if I could build this web application and provide it as a subscription service, my friend’s organization and hundreds – maybe even thousands – of other non-profits would love it and, most importantly, subscribe to it. It didn’t take long before I completed all of the legal documents and signed the forms that legitimized my new business.
I began to rapidly flesh out the idea. My experience in full stack web development was paying off. I was able to plan out the database architecture, design high fidelity mockups, and code the entire thing. Very quickly, however, I realized that there was too much work for one person to do. I had to bring someone else onboard.
At least I got that part right!
Avengers, assemble!
With the realization that I couldn’t do everything by myself, I started looking for people to bring on and help me. Luckily, I had a good friend who had been working at the same non-profit as I, pre-COVID. He was let go from his job, as well, and I knew he would have his interest piqued at the prospect of this new adventure.
Let me preface something before you read further. I know the startup lifecycle as well as anyone. I know that market research and validation are foundational to starting an online business. And it makes 100% sense, right? If the market you are trying to sell to doesn't have the particular problem you are trying to solve, then you don't have a business. Somehow I seemed to have forgotten this...
My friend was a talented salesman and had been working with non-profit organizations for the past several years. He had deep connections, and we were both absolutely convinced that we could bring the service to hundreds of organizations easily. He signed on as my Co-Founder, and we were off the races.
Literally... races. We both agreed that this service needed to be done yesterday. I rallied a few other developers I knew had been let go from their jobs because of COVID and I temporarily brought them onboard with my vision. Our goal was to build, test, and launch two web apps required for our service within four weeks.
Feature Creep
Being in software development for a while, I knew that feature creep was a problem that we’d run into and a huge threat to launching on time.
If you don’t know what it is, feature creep is the act of adding additional functionality to a feature or product during its development that detrimentally pushes back its release. The continual addition of new things to the project makes it very difficult to find a stopping point and can easily kill a project by never allowing it to be “done”.
I wasn’t about to let Feature Creep get its hands on my project. I fought hard to keep our launch date realistic and only let in features that were required for our MLP - Minimum Lovable Product. Aka - the smallest and least feature rich product that will still have value for the customer.
Did you notice my HUGE misstep? This is probably the single biggest reason for its failing so far. No market research or due diligence, of any kind, was done. We jumped into building and marketing so quickly that we forgot to see if the market was interested in this type of solution. I didn’t realize it then, but we were flying blind. This is made even more evident when we get to pricing the service. Stay tuned.
I rarely shy away from a bit of hard work so I relished the idea of working really hard to start my business. It seemed like a rite of passage based on the stories I had read. Plus, my team and I loved building the web apps – the sense of urgency was a welcomed change from quarantine and unemployment.
It’s alive!
Six weeks later and around 500 hours of work from myself alone, and the service was built and stable. I was so proud – and so almost-kinda-sort-of-burnt-out.
“Can we stop talking about money?”
Over the entirety of development, my co-founder and I had gone back and forth on how much to charge for the service. We had changed the pricing several times and even had transitioned from a flat monthly fee to a pay-per-use model. The pay-per-use model was super confusing and required an explanation from one of us to be understood. Nonetheless, it was a great offering for scaling and made sure we covered our baseline costs.
Pricing was so hard for us to nail down because we had no idea how valuable our solution was. Since we hadn’t done any research, we had no idea how customers were viewing this problem and how much they would pay for a solution. We didn’t even know if our type of solution would be desired by our customers! We were basing the price purely on how amazing we thought our solution was.
Once the service was stable and we figured out the pricing, we decided to launch! Why hadn’t we “launched” long before that, you ask? Well, we had to make sure we were 100% ready because customers were going to sign up in droves. We were absolutely certain of it.
I don’t know why I thought we had to have a completed product before we could start marketing and getting leads. Marketing and sales can be rather difficult and they take time. It was a bit insane to think that we were going to have loads of sign-ups with no marketing and only a dozen 1-on-1 meetings with potential customers. So the tale continues...
Launch Day!
We launched on a Tuesday with a barebones website, no active marketing of any kind, and no budget to scale with. Surprise, surprise – nothing happened.
My co-founder and I kept working really hard, almost doubling our efforts. He kept reaching out directly to customers and scheduling demos, and I was implementing group marketing while also continuing to build and improve the service.
Unfortunately, sales were still going nowhere. Even with a talented salesman and a deep network, we couldn’t get traction.
GET THIS – even before launching, we had leads! Quite a few of them, actually. But none of them took the plunge and signed up. Business 101 – understand your market! We actually had a great service that our customers thought would be helpful, but the onboarding was a little too difficult and the price tag gave them sticker shock.
Being a web developer, my first priority was the marketing website. It wasn’t a great sales funnel, and I figured that redesigning it would help bring in numerous more sales.
Once again, I put my head down and worked hard to build a stunning website that would drive traffic to demo requests and make sales. But upon completion – nothing happened. Turns out, you need traffic to your website to make sales on your website.
How to get traffic when you are not a marketer
I’ve built websites and sales funnels before. I knew good practices for conversions, and I even knew a bit about Facebook ads. But I would not call myself a marketer, by any means. I was hesitant to lean into marketing and sales because I didn't want to step on my co-founder’s toes. He was good at sales and, most importantly, he was my entire outbound marketing strategy.
Have you heard the saying “Don’t put all of your eggs in one basket?” It exemplifies this situation and how I treated outbound marketing. Our Plan A was to make initial sales through my co-founder’s non-profit network. We both thought it would be easy with his relationships and history. But we quickly found out that it was not going to be easy! Our plan B was… there was no plan B.
I think I’m learning!
I wised up a bit and began doing market research by reaching out to influencers, Facebook groups, Reddit threads, and online magazines. I wasn’t even looking to sell; I was hoping that talking to people about the service would simply generate traffic and that that traffic would generate customers.
What I found through my research was a massive gamut of opinions on COVID-19 and the tools being used to solve social distancing and capacity limits for live events. I can’t go into details about the market, but the diversity of opinions illuminated a lot about why we had been struggling to get traction.
At this point I began to realize a few things. 1) We were very overpriced, 2) we needed more features to be attractive and 3) We needed to find more effective verbiage so we could showcase our value more effectively.
Talking directly to people in the market wasn’t very helpful, initially. Each organization was looking for something different, and most that wanted to hold live events had figured out a solution already. This left very little room for a premium-priced service.
To combat one of those problems, we changed our pricing from the confusing pay-per-use model to a monthly, flat fee and dropped the price by almost 50%. Our service was now slightly lower but appropriately priced against its competitors – a change that would undeniably make the service more attractive and bring in sales.
Can you guess what I’m about to say? Unfortunately, the change did not boost sales. We had a few more leads, but no one was converted into a customer. We still weren’t able to get any traction.
The beginning of failure
I’m a strategist at heart, but for whatever reason, I wasn’t able to see that I didn’t have any kind of plan. I was being purely reactive – changing things week to week or day to day because nothing was working. I never took the time to get the altitude I needed to make long-term and thought-out decisions.
All of those eggs in one basket
At this point, it had been around two and a half months since launch day, and my co-founder told me he had some bad news to share. He had to pick up another job to keep his house. That means he has very little time to work on our business. It took courage to have that hard conversation with me, but his decision was completely understandable. Life during COVID-19 is hard and ever-changing and it often requires hard sacrifices. Nonetheless, I all but lost my teammate when he cut his hours back.
One of the things I’m proud of is the way I handled that situation. I would never have asked or expected him to sacrifice his home for our business. I wanted our business to be successful more than I wanted most things, but people will always be more important than business or money in my book. I was disappointed when he stepped back, but I recognized the hard situation he was in and didn’t hold his decision against him.
Putting more pressure on me, the developer I had on contract was very close to getting a full-time gig. His contract was written so that he was paid based on how much money the business had made and at this point, we had made $0. He had rent and groceries to pay for, just like the rest of us! When he was hired for his new full-time job, he stepped back and cut his hours down to under 10 per week.
That week ended with zero sales and with the entire weight of a failing business on my shoulders.
I know I said this isn’t a sob story, but that is pretty sad, huh? But that’s as low as it goes. The only direction to go is up!
Who's to blame?
It would be easy to blame this failure on COVID or even on my teammates. After all, they did choose other priorities over our business. But I think there’s much more in their decisions than meets the eye.
They cut back hours and choose other priorities because I was unable to lead them in a successful launch or post-launch sales campaign. Jocko Willink’s words in Extreme Ownership are ringing true in my ears:
“There are no bad teams, only bad leaders.”
“I’m going on an adventure!”
It doesn’t end there, Bilbo Baggins. We’re now several months post-launch (at the time of writing), and we are still going. My co-founder is working really hard and making time for our business, which has breathed new life back into me and the business. If nothing else, all his hard work is an incredible blessing to me.
And me? I’ve been taking some time and learning from my mistakes - hence this article. It hasn’t been easy, but I’m doing my best to be patient and develop a great strategy for scaling up and gaining traction.
Also - we have customers and demo requests coming in - it’s slow, but we’re trending upwards! Maybe time will turn out to be the secret sauce to it after all.
Failure isn’t always bad
Here’s the short of it - failing isn’t objectively bad. It’s hard and can feel terrible when you’re in it, but it is the best teacher. I don’t think you are a “failure” when you make mistakes and “fail”. I think what makes you a true failure is when you give up.
Because of that, I’m not giving up. I have an abundance of things to learn and it would be wrong for me to quit now. I’ve failed to launch this business well, but there is life left in it! I think the idea behind this service is incredibly helpful and I think that the longer COVID sticks around, the more organizations will realize they need a solid, long-term solution.
I’ve made a lot of mistakes to get myself here. Ironically, I feel more prepared to take on any future businesses now that I have taken time to slow down, and can clearly see where I’ve failed in the past.
At the end of the day
I did something that most never will – I started. I’ve had a hell of a go so far on this business and I’m sure it'll be laborious going forward but I’ll pay that price to bring value and safety to non-profit organizations.
At the heart of this is my desire to better the world around me; to add value to people’s lives so they have more energy and life to give to others. That’s my mission and it’s worth a lot of hard work and sacrifice.
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