If eight out of 10 businesses fail, then it stands to reason that the most resilient of us will focus on learning from our mistakes, rather than focusing on the relatively few successes.
With this in mind, I thought I’d ask eight successful entrepreneurs ‘what has been their biggest mistake since starting out’ so that we could all learn something from their journey.
“When I started out, everything was about speed, lean and getting sh!# done. When I had to sign a large software contract I made two massive mistakes. Firstly was not demanding that a US contract presented the dates as DD-Month. As 7.6.17 is actually the 6th of June not the 7th of July. Secondly that contracts can have a perpetuity clause meaning that if not cancelled by a said date then it auto renews. The kicker to this is that latest time to cancel can be 30 prior to the actual end of contract date.”
“It would have to be not being careful enough with cash. I was extremely fortunate to have had an unexpected and moderately-sized dividend payout from another company I owned at the time that got me through.
Cash is the engine that keeps your organisation going from month to month.
You could have a stellar team, producing some great work, and have signed with some juicy contracts. But that all counts for nought if you come up short on cash for payroll, because your clients are slow paying, or have longer than expected payment schedule because of external factors.
Always keep a sensible cash reserve, have a competent person following up your invoices, and make investments only when you can pay for them.”
“When I started my first company, my biggest mistake was making assumptions and not clearly defining everyone’s expectations, rights and obligations. This is something that can be easily accomplished with professional counsel drafting a shareholder’s agreement. Unless you’re a fortune teller, you just don’t know what the future holds.”
“I’d say one of my biggest mistakes was being so focused on growth metrics that I became obsessed with trying to get new clients onboard which meant that I neglected our existing clients. In hindsight, I would have worked much closer with a few raving fans and used their experiences to build the product to a scalable point as opposed to making new user growth the priority.”
CEO & Co-founder
“The biggest lesson I’ve learned is not to give new people to your business too many high hopes. Some people don’t want to take over the world with you, they don’t want to grow at the pace you want to grow; they’re happy plodding along in life being happy and keep things at a certain level. Lesson learned from this, recognize this fast, communicate your feelings and move on without them, it’s all going to be ok.”
“While there may be many mistakes that I’ve made during the early stages of starting a business, I think the biggest one was not connecting early with really smart domain experts to serve as advisors or even board members. We missed a couple of seriously important growth strategies, where once a different decision was unwittingly made, has been near impossible to revert to a different course of action. The two that come to mind was not thinking global and only acting local, assuming having just a presence on the (global) web would be sufficient. The second was creating a profit focussed and dividend paying business; versus a growth engine that reinvested its earnings back into that growth. Not sure what the value of the business would be today but we estimate somewhere in the vicinity of 8-10 times.”
Founder & CTO (Sold)
“When bringing on your first investment it is always good to find someone who can directly help you grow your business either through contacts, advice or being able to leverage their existing businesses to provide additional access to your market. When I was starting out in my first startup such an opportunity presented itself early on and we did a deal where we expected to get a sizeable sales channel and direct access to our market and for this, we gave up a big percentage of our company for not a lot of money. The reality was very different to expectations and the sales channel we expected was not really interested in selling our product (software) and the company we were working with was not a good fit (consumer products). We found our best sales channels independently. As a young founder, you can be impressed by the very idea of a large influential company wanting to invest in you and think it a gateway to sure success, but reality can often be very different once the deal is done. Make sure you do proper due diligence on the opportunity to ensure it is the best opportunity for you and your company and try to structure the deal to protect you if it does not meet the outcomes expected.”
You will only fail to learn if you do not learn from failing. – Stella Adler
Now it’s your turn, what has been your biggest mistake in business and what have you learnt from it? Share in the comments below and let’s combine our collective experience.