How Not to Start a Business: A Cautionary Tale 5

NY 1

Bad day at the office

“So this is not working out and we are going to let you go” said the acting manager of the branch.  I smiled and laughed a little and shook his hand.  This gentlemen that had stayed at my house, ate dinner with my family and drank my wine, was now letting me go.  After I had put weeks in away from my family to build this branch, supported the existing employees and finally got this branch to the numbers head office needed to see, I was being let go.

Well fuck them, I hated it anyways.  Now to my true calling, building a software development company.

 

I had been programming off and on for the last 7 years and I was dying to get out on my own.  After all, I have two degrees, a decade of sales experience, 4 years of management and 5 years of varsity level coaching.  I can’t help but be a success.  My only items of concern were my pregnant wife, our two mortgages, our two dogs and our overwhelming adversity to risk.

 

So upon coming out of my just got fired drunken vacation, I started programming my new game.  While programming in my head all I could hear was 98% of businesses fail.  What happens if it fails?  What happens to the house and my new family?  Your wife is a type A high achiever in her industry, will she stick around if you fail?  Ok… no problem… I just have to build a business that can’t fail.  The problem was I had no idea how to start a business.

 

So, how to start a business?  I’m an engineer and there should be a procedure for these things.  So, I started at the regional business centre.  They were giving free courses on all aspects of starting a business.  I learned that in order to start a new business and get financing, one needs a business plan.

 

Building a business plan

Where we are from, employment insurance runs a course that walks you through building a business.  I attended this course where they indicated they have an 83% success rate in building new start-ups.  The catch is they only help if you are completely unemployable and know nothing about business(Their words, not mine).  It is a great program, but wouldn’t work for me.  So instead I combed the net looking for templates and shortcuts.  The best template I found was Futurepreneur.  This broke the plan into manageable bite size sections that you could fill in independently.  There was also examples!  It was great!  Over the weekend, I spent almost 50 hours banging this document out.  Ok, one quasi business plan complete.  Hmmm…no calls from investors yet.  Luckily the local incubator was running an entrepreneur 101 course.  I’ll join that.

 

Becoming an entrepreneur on paper

So every Wednesday night for an hour I was rubbing elbows with other people with my ambition and “Go get ’em” attitude.  Typically there was a guest speaker or webcast from someone who has done the impossible and started a lucrative business.  Or, the presentation was about patent law, social media or some other key piece of knowledge that is essential for business makers to know or they’re doomed.  One key thing that I found was most “lived it” lecturers didn’t really know why they were in the business they were in or why they were successful.  Typically, they had one or the other, and definitely not both.  Cool stories, but not exactly helpful in mitigating the nagging risk of zero income.  The one redeeming opportunity was the Up-Start Pitch competition.  I could now put the business plan to good use.

 

Meanwhile…begging and attempting to borrow

So income right!?  It allows us to eat, have a roof over our heads and buy sweet video games.  At this point, I’m on employment insurance and my wife just left work on maternity leave.  So, our household income is next to nothing.  A little refinancing here and we’ve bought some time, but this emasculating feeling of not protecting my family is petrifying.  I dug into research on small business grants, municipal development investment, small business loans and angel investment.  Here’s a little secret, if you need money, no one will give it to you.  I have some close friends in a few of these areas and they were really nice, but they kept me hoping that they would find money.  This hope kept me trying to mitigate this financial risk.  A piece of advice to all investors or loan advisors, say “no we can’t help you” if it doesn’t make sense.  This hope is doing more damage than good.

 

The weight of deadlines

After my two weeks of “Awww poor me”, my wife and I agreed that if I didn’t see dollar one by March 1 that I would start looking for a job.  March 1 came and I didn’t say much as I was currently in the throes of doing all of the above.  That’s a full time job right.  The truth is…no it isn’t.  March 8th, my wife came to me with our agreement.  “But honey, I have this going…and this is a sure thing…the city promised me the possibility of grant money…What about the Up-Start competition?”  She conceded to let me make it to the Up-start competition as long as I spent an hour a week job hunting.  Deal!

 

Up-start competition

Perfect, the day is here to prove to the world how great an entrepreneur I am.  Two hours from now I should have a check in my wallet for $5,000 and investors will rain from the sky.  After all, none of these “wantrepreneurs” can hold a candle to my intellect, intelligence and business experience.  I had a demo of a Minimal Viable Product, I had all the industry numbers and I had an excellent value proposition.  Win-win-win…now give me my money and fame.  Well I presented (here) and lost to a dog seatbelt that broke all presentation rules.  This is crap, I’m crap and now I have to go back to crap work for the crap man.  My wife reminded me, because she’s brilliant, to go ask for feedback.  I did, but they didn’t do that for the competition.  Arg!  Why did I do this!  This was such a waste of time!(It wasn’t but feedback is needed and most came from friends and family after I shared it 3 months later)  Now to the end of this road.

 

Conclusion

Having spent the last 6 months reviewing what I had done, I found the following key points.

  1. A fully fleshed out product or service is the key to everything.  Build the product is rule number one.  Nothing starts without this.
  2. Sell the product or service.  Everything else starts rolling when you start selling.  You can show viability to investors, banks will let you borrow against revenue and partners will start to show up once you prove that people want to buy it.  The only way to prove people want to buy it, is to show people that have bought it.
  3. Every other action is just procrastination.  This fear of rejection, financial fear or the fear of knowledge gaps are all just forms of procrastination.  Fear is as much a procrastination tactic as the TV and Xbox.  A great tool I learned from the great Tim Ferriss is to make a list, prioritize it and dedicate 2-3 hours on the one most effective thing today. (Super-paraphrased but check out the link.  His blog and books are great.)

 

It was difficult to go back to work.  Once you take the blue pill and go down the rabbit hole as an entrepreneur, nothing is ever the same.

 

Thanks,

Ian


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5 thoughts on “How Not to Start a Business: A Cautionary Tale

  • Jason

    That was a good read Ian.
    I have two friends who also tried to start businesses, unfortunately both were unsuccessful. Both of them hit the reset button and got a job, but the entrepreneur bug came back and now each is working towards their second business.
    Both of them learned some hard lessons the first go around and are planning to learn from it.

    I believe those people who decide to break the mould, and pursue something they are passionate about really are inspiring. I believe both of our parents had that entrepreneurial spark in them, naturally you have seemed to inherit it as well.

    You never know, maybe all the experiences you gained through this journey may lend itself to the next.

    Best of luck in your endeavours and congratulations on becoming a father.

    Regard,
    Jason

  • Dawn Murphy

    Awesome read Ian, and to the point on every angle. We had our eyes opened as well. The old adage, “Nothing ventured, nothing gained” does not ring true for me. My eyes were opened and I couldn’t agree more with your conclusion.

    • buschfire Post author

      Hi Dawn. Thank you for your support. How is your business going? If you have a website up and running I would love you share it. I think you guys have a great product.