Today marks my 29th birthday and instead of celebrating, I’m choosing to reflect and double down on work. After all, it’s really just another Tuesday. Most people see me having fun racing every weekend or posting lavish things on Facebook, but what most people don’t see is the hard work behind the scenes that allows me to do the things I do – or the number of times I’ve allowed failure to move me closer to this lifestyle.
So last night, as the clock struck midnight, I wasn’t focusing on the things that have gone well in my life. The only thing I could think about is how I’ve failed in life and about the lessons I’ve learned (or should have learned) as a result.
So far, I’ve launched four companies in my life. Three of those companies have failed, making Single Grain the only one that didn’t fail (or, as I like to think of it, is a “success in progress“). That gives me an average 25% success rate… which is pretty shitty, depending on how you look at it. But instead of beating myself up over that average or getting overly sentimental about it, I’ll jump right in to the lessons I’ve learned from failing:
Be aware of legal costs
If you’re going to form a company (even if you take the easier road of an LLC compared to a corporation), it’s going to cost you. Not only do you have the registration fees needed to form the company in the beginning, you’ll have yearly renewal charges and other legal fees to contend with.
When you look online, you’ll see that most states require a filing fee of between $50-300 (Texas is the highest at $300 for a C corporation filing) in order to start a company. That might not sound like much, but what about the hundreds (or thousands) of dollars you’ll need to pay a lawyer to draft up your incorporation documents? Skimping on legal fees up front isn’t smart, so make sure you’re fully prepared for these expenses.
Make sure your idea is big enough
If you’re going to seek out external funding, you’ve got to have a big idea. I’ve had a company fail because we aimed big and failed. We were still profitable, but because it wasn’t making enough money, the investors decided to shut it down. It’s totally frustrating (WTF, right?), but it happens, so be aware of the possibility when courting capital.
Put some skin in the game
If you’re going to try to raise VC/angel investment or even get seed money from your parents, make sure you put your own money in first. Why? Well, if you’re all in, you’ve got a really good reason to get your shit together. Knowing that it’s your money on the line – not some random investment – will give you the will-power to succeed or (at least, not quit) when things get tough.
Don’t be afraid to ask for help
I don’t care who you are – there’s no way you’re going to have all the answers to everything that occurs in your business. But the good thing is, you’re not alone. Even if it feels like you’ve got to figure out everything on your own and like no one is going to help you, there is help out there – you just have to ask for it.
In fact, there are a ton of successful entrepreneurs out there that like helping – all you have to do is ask. Of course, not everybody will answer, but you’d be surprised. Steve Jobs answered a question I sent him when I was 17 asking if my business idea was good. His response was short, and he pretty much said I was an idiot – but, hey, it’s an answer!
Disclaimer: Before asking for help, make sure you’ve done your homework and that you truly can’t get any further on your own. Why waste a favor on a stupid question you can figure out by doing a bit of research?
You can always come back
Did you know that Single Grain has come back from the grave twice? The first time was in 2005, when I first started the company. I couldn’t get enough clients so I took on a full time job to keep myself busy. Eventually, though, I got too busy with work and wound up abandoning Single Grain.
Then, in 2008, I started it back up again. In 2010, the company wasn’t even making enough money for me to pay rent. I had to cut my two employees’ hours and take on yet another outside job. But luckily, we were able to sell off some of our clients and practically start over, allowing us to get to the point where we are today.
What I’m trying to say is that it’s always possible to come back if your initial attempt doesn’t pan out. Don’t believe me? Here are a dozen examples of other companies (including much larger businesses) that have come back from near ruin: http://www.entrepreneur.com/slideshow/219445
You’re always going to have a boss
Don’t start a company because you don’t want to have a boss. As Single Grain’s “MFCEO” (most friendly CEO), I’m technically at the top of the food chain, but we still have 25 clients that pay us to get results. When it comes down to it, each of these clients is my boss, since I don’t get paid unless they’re happy. If you have investors, they’re your bosses. If you have mentor, they’re your bosses as well – and there’s nothing wrong with that.
Take emotion out of the equation
Whatever you do, don’t let your emotions make decisions for you. Use facts and logic instead. As an entrepreneur, you’ll go through plenty of different emotions – sometimes, all in one day – but your feelings at any given time can’t change the facts. This is different than making gut decisions, because those decisions are still based on facts and intuition, both of which are different types of logic (at least, in my mind)
Do it for the right reasons
I don’t know what the “right” reason is for you, but I do know that getting famous or making a lot of money are pretty much universally the “wrong” reasons. If you have a strong enough reason behind what you’re doing, it’ll help you get through the weak points that every journey has.
Learn math (or at least basic finance)
You need to know how much money you’re spending, what you’re spending it on, how much profit you’re making, what your burn rate is and so many other things. Fortunately, learning these things isn’t actually that hard – you just have to be willing to do the work.
I’m a college dropout, but at any given time, I can tell you what our profit is, what our margins look like, how much money I have in my bank account, and how much cash I spent today. I’m not saying that you have to be the CFO of your company, but you do need to learn basic money management for yourself and your business. Do you know how long you could go without being paid? Or how long your company can run without turning a profit? If you don’t, I can almost guarantee that the numbers aren’t as rosy as you might think.
This might all sound a bit depressing, but the reality is that failing is inevitable. Chances are you didn’t learn to walk on your first attempt (although, if you did, call me – I’ve got a job for you). We all fail all the time – we just don’t realize it. Failure isn’t new to you, and it’s something you’d better get comfortable with as a business owner. You must be willing to fail, but – like I did – you’d better also be able to work your butt off and learn from your mistakes. If there’s anything I’ve learned from failing it’s that I will fail, but I will not quit – and I can’t think of a better lesson to leave you with as I celebrate my 29th birthday.