In this blog, I am going to share with you three businesses and ventures and investments that I’ve made that didn’t work out and I’m going to share with you the reasons why they failed, what I learnt from them and how you can not make the same mistakes I did.
I have made a lot of good decisions in my life but also a lot of failures and issues that I’ve learned from.
Around 1996 (don’t laugh), my good friend Bradley and I came up with this idea of connecting takeaways to the internet.
The internet had just taken off at the time and we called our company Web-Driven. The problem was this was 1996 and not enough people were on the internet.
You are probably thinking “James are you saying you could have started Deliveroo or Just Eat?”. I had the idea but the key lesson I learned from this was that I was ahead of the time… I didn’t have the cash or the support to keep going to make the dream happen, and maybe I didn’t even want it enough?
If you have an idea, you must have enough resources in place and enough motivation to make that business idea come to life. You also have to deal with the tough times and the low times when they come about.
If you want to be successful in business, back yourself! Make sure you’ve got the resources and the passion to overcome challenges that will come in those early days because you will face them.
In Web-Driven’s case, we gave up on our dream and moved on.
Don’t let that happen to you.
The second is a more recent failure. During the covid pandemic, I invested in a business. I put a lot of money and time into that business and, unfortunately, last year it came to an end and it collapsed. I lost some money, some time and some pride in that business failing.
What was the reason why it failed? I think there are two reasons why.
The first reason was that they started spending money before they were earning it.
When you start out, you need to keep those expenses as low as possible until you bring income in on a consistent level. Too many businesses want to spend too quickly at the beginning. The challenge is once you have racked up a lot of expenses up you have got to bring in revenue to cover it, and if your revenue doesn’t cover it you have a big issue ahead of you.
In the case of this business, too much money was spent rather than bringing in income. I could see it happening and I should have said something, but instead, I let them get on with it. I wish I hadn’t as staying silent cost us all.
Conserve your money. Make sure you spend as little as possible to get your business going until you can bring revenue in.
The second thing reason is that they didn’t focus on a real customer problem or desire.
It’s one of the biggest issues that I see companies face on a regular basis. When I talk to small business owners, they have this grand idea of what they do and how they do it. But in reality, there’s simply not enough demand for their idea.
There is a great quote that I was given once that I encourage you to think about which is: Is your business a vitamin or a painkiller?
If you’re a pain killer and you solve a problem the chances of your success is going to be higher because people want problems solved. If your business is a vitamin, you can still do very well, but you’ve got to make people want to spend money with you and that’s sometimes tough to do.
When you’re focused on building your business really look at yourself in the mirror, chat to mentors, head to my Facebook Group and talk through who your target audience is and what their big problems and challenges are. When it comes to tough economic times and when money is tight people make decisions on those aspects and if you’re one of these things that’s nice to have rather than a must-have you are likely to get dropped. Focus on the pain point for your audience and it can make a big difference.
I started a company in 2005. I was basically my baby for a number of years – I raised investment, nurtured and grew it, and now I’ve exited and handed it over to its new parents.
What went wrong here? Also two things.
Firstly, we were too generic and untargeted in our approach. We had a piece of software that we targeted to small businesses. Small businesses is such a big category! We weren’t specific enough within this sector. We kept on focusing on being a generalist, and the problem that comes with being a generalist is that we were everything to everyone, not something to someone.
Secondly, in 2013 I raised nearly half a million pound for that company. I didn’t’ see customers, I saw numbers, and a growth objective that would see me selling my business and walking away with a load of money.
The reality is that didn’t happen because I stopped focusing on the basics.
I believe businesses are a three-legged stool: if you focus on delivering incredible service for your customers and the make your team feel valued and love working with you, then the third part is the stakeholders and shareholders will be looked after themselves.
No company can operate unless you’ve got a brilliant set of customers who absolutely love you and what you do, and a team that loves working with you. Focus on delivering a brilliant service and a brilliant experience and company environment. I didn’t do that I took the money in investment and focused on growing and focused on numbers rather than people and it came back to bite me on the backside.
There you go – there are my three key failures and what I learned from them with these businesses.
These failures have not only taught me invaluable lessons, but they have made me able to share advice and support other business owners in a better way. Failure is a good teacher!
James Dyson had to do the Dyson hoover hundreds of times until he found the magic formula to make the hoover successful.
Don’t see failure as a problem. Embrace it. Learn from it. What experience can you take form it that will help you become better at what you are doing?