“Pratice what you preach” or “Do as I say, not what I do”? Maybe it depends on who you’re talking to, but today, I’ll pratice the former and embrace my failure. How have I failed? Oh, let me count the ways. No, really, I’m going to count the ways. Here are 4 big mistakes I’ve made as an entrepreneur and small business owner. I’ve learned from these mistakes, and hopefully I won’t make them again. And, perhaps others will learn by proxy from my mistakes — if you can avoid ’em, great! If not, then at least you’ll know you’re not alone.
1. I Didn’t Network Enough In My Own Backyard
First — the positive. Very shortly after starting my web development business I realized I was not a good salesperson. My partners were worse. So we made a smart decision and modified our business model to target other, larger web development companies in the US. This was 1997-1998, things were booming and there was a shortage of good programmers. We were cheap (the great Canadian-US exchange rate helped!), did good work and eager. Plus, it was easy to talk with people in the same business as us; no need to go after people that said, “What’s a website?” But that leads me to the failure. I spent so much time looking elsewhere for opportunities that I completely ignored my own backyard. There was plenty going on in Montreal at the time too; but I was almost entirely oblivious. The result was that I missed plenty of opportunities to develop relationships with other local entrepreneurs. And when it came time to do things like hire people (employees or contractors) I was at a disadvantage. Now more than ever, with blogs, podcasts and the reach of the Internet, networking is insanely easy, but the bulk of that is done in the great beyond…don’t forget your own backyard. You can’t replace meeting people face-to-face, and building a solid foundation at home. Truthfully, I still stumble with this. These days 99.9% of my clients are in the US and I spend an awful lot of time networking online. I have to conciously remind myself to stay involved and active in Montreal.
2. I Managed My Employees With a Jell-O Fist
When I first started hiring people I had very little experience managing them. Back in those days I was lucky if I could manage myself. Granted, most of it was common sense (and still is) but there’s still a lot of learning that takes place. I took a very easygoing approach to managing my employees. Too easy. It resulted in a very fun and relaxed work environment (those are positives), but also in a bit too much leniency, flexibility and inefficiency. That last one is the killer: inefficiency. By managing with a Jell-O fist I was too flexible and when the workload piled on, the employees and I crumpled. Now, I’ve learned to balance my management style between Militant Ninja and Super Chill Dude. The balance allows me to tighten the reins when needed, but generally leave them loose enough for people to do their best work.
3. I Relied Too Much On Others
That might sound odd, considering that most entrepreneurs rely so much on their own efforts to succeed. But the truth is, over time, I’ve relied on others, be they partners, vendors, contacts, etc. too much. I grew complacent at times, expecting others to make things happen. I “put my eggs in someone else’s basket.” The truth is, to succeed, entrepreneurs need to ask for help. We can’t tackle everything on our own. But it comes down to balance. Ask for help. Find help. But don’t rely too much on others.
4. I Believed the Hype
I started my business in 1996. By 1998-1999 the Dot-com Bubble was huge. Hype was insane. Money was flowing all over the place. People were spending hundreds of thousands of dollars on websites that now get built for tens of thousands of dollars, if not less. It was a crazy time. And it was so easy to get sucked into the hype. And I did. Not as much as others: I didn’t invest my life fortune in .com companies, but I was in the middle of it trying to strike it rich. Well, we all know what happened. K-A-B-O-O-M! The proverbial poo poo hit the fan, and people stopped investing in websites or anything Internet-related. I survived with some insight, having gotten into software development to balance the web development business, but the hype for a couple of years was almost all-encompassing. Lots of people got rich at 25 (or younger). I didn’t. Lots of people lost everything. I didn’t. So I ended up OK, but I won’t get sucked into hype like that again. What’s scary is this — it’s happening again. Web 2.0. (I nearly spit when I say that phrase.) With any speculative bubble there’s the good and the bad. There’s positive change and then there’s also a ton of money wasted. It scares me, but makes me laugh at the same time. I try and sit outside the hype, looking in, even though it’s tempting to jump in. The Web 2.0 bubble will burst. Maybe not the same way the Dot-Com one did, but it’s going to fizzle out. Lots of Web 2.0 software companies will disappear (taking with them a ton of ancillary companies in marketing, PR, services, etc.) as they run out of money and realize they forgot something critical: a business model. So there you have it. Four of my biggest mistakes. Care to be brave and share some of yours?[tags]failure, business, entrepreneurship, web 2.0, software[/tags] PS. Although not inspired by Darren Rowse’s latest writing project, I will be submitting it there. He’s looking for lists. Check it out and contribute!