learning from your mistakes
Making a mistake, for some people, can feel like a failure. In reality, mistakes are an opportunity to improve your chances of success, especially in business. As these startup founders have discovered, learning from your mistakes can help you run a business better.
Delegating too much financial management to accountants
In her first business, a fast-fashion startup, Nikki Hesford, founder of The Small Business Academy, admits she viewed financial management as accountants’ stuff and a “boring legal requirement.”
“I didn’t understand that having weekly/monthly/quarterly control of my income and expenses supported everything else in the business; my cash flow, marketing budget, sales forecast,” she says. “Although the information was readily available in my accounting software, I did not use it regularly or seek to understand the data. Having learned from that mistake, I am now picky about financial information.”
Miscalculating the size of the customer base
Andy Cockburn, CEO and founder of the Martech firm Mention Me, built his first startup in 2006. He says, “We raised money upfront from investors, spent two years building a big, sophisticated platform, and then launched it, just for a handful of people. of people. to use it.”
He took the opposite approach with his second startup, only raising money and starting hiring once they proved the model worked. “We took a lean approach and set ourselves nine tests, including finding out if customers wanted to pay for it, how many meetings it took to sell it, and making sure it worked for customers,” he says. “Once we got through all nine tests, we knew it was working and we could scale it, which we did.”
Invest personal finances in one place
Daniel Curran, founder of Finders International, initially invested his first business leftover money in Blockbuster, which had the opportunity to invest in a then-fledgling Netflix for just $50 million. Blockbuster subsequently went under.
He says: “Entrepreneurs sometimes make the mistake of thinking that their business is their primary investment when their goal should be to build a broad and carefully distributed personal finance portfolio. Profits from those efforts can be useful cash to reinvest in your company when needed.”
Having learned his lesson with Blockbuster, Curran bolstered his assets by investing extensively in profitable ventures, including commercial properties in London’s Shoreditch, long before it caught on, Apple stocks, and most recently Shiba Inu (SHIB), all providing excellent returns in later years. He says: “Entrepreneurs should never overlook the diversity of personal financial investing.”
Assuming senior hires require less mentoring than younger hires
As co-founder of tech recruiting firm Carrington West, it’s an assumption Simon Gardiner admits to making in the past. “For years, I found it difficult to distinguish between what constituted good mentoring of a higher-ranking employee and what aspects of induction or training would fall below the ‘mildly condescending’ line,” he says.
After some feedback from 360, it became clear that some of the more experienced people felt that their experience was not as well managed as younger hires. “Now, I specifically say, ‘stop me if I’m covering things too basic.’ This allows people to receive the information fresh or as a reminder, without affecting their egos.”
With a view to income distribution
Becky Shepherd is the founder of the social networking agency Swwim. In the early years of business, they had a client who contributed 50% of their revenue. When they lost that client due to a business change, the agency was devastated and took a long time to recover.
“Our goal now is to keep all customer value below 20% of total revenue,” Shepherd. “My mentor’s advice was that if we win a large portion of business that is close to or above 20% of total revenue, we should double down on new business efforts to reduce that percentage and eliminate vulnerabilities.”
Not realizing that the market does not always say what it wants
Ted Lawlor runs the If Only They Knew media group and The Manifestation Journal. In the past, he has introduced many new features to the market based on what his target audience has suggested they want.
“It’s only when you launch the new features that you realize that your audience’s actions can be different from their words,” he says. “For example, they may say they want a group of exclusive members, but when you work hard to make it happen, the audience realizes they don’t want to join.” Lawlor now tries to weigh the opportunity cost of the time she spends creating a new feature against the potential revenue or impact the feature could have. “This helps me avoid disappointment,” she says.