L adies and gents, Founders and Fails, welcome to the next evolution of Founders@Fail. We’re dropping knowledge from the startup trenches directly to your desktop. In addition to our monthly meetups, we’re kicking off a streaming web show. Every week, we’ll release a new episode. So pick up the Ben & Jerry’s, settle in, and enjoy a good kick in the teeth from today’s most inspiring entrepreneurs. I can promise one thing: we don’t pull our punches and don’t shy away from asking tough questions. This isn’t 60 Minutes. It’s real advice from entrepreneurs who are struggling with real challenges. There’s no spin and no press releases. The stories aren’t always pretty, but they’re the ones worth hearing. For those of you out there trying to build a business- if you don’t walk away thinking about what you’re going to do differently, you’re not listening.
PR ain’t the same thing as Marketing. You might as well compare crutches and a car. Yeah, they both help you get around, but that’s about all they have in common. -Schuyler Brown
People’s reasons for buying things often don’t match up with the company’s reason for selling them. -Jason Fried
I have a degree in finance, but I don’t remember taking any classes that even remotely taught me how to make money. -Jason Fried
As preconditions to be creative, one should know something well while having the utmost focus on it. Someone who knows little about aerodynamics can’t come up with the idea for next concord. And focus has two aspects: knowing a specified area well (focus area) and being able to bring most of those neurons to work on it. How do you achieve the latter? I found isolation to be very effective (as have numerous famous people). -Mansour
Until you’ve understood how your majority opinion could be wrong, you should strongly question whether your opinion is right. Until you’ve understood how a dissenting opinion could be right, you should strongly question whether it is wrong. A great and simple test is whether you can argue both the majority and dissenting opinion well — irrespective of which one you hold. -Larry Cheng
If you fail too hard or succeed too easily, I’m not sure how much you really learn. -David Sacks
The marketplace is far harsher than I am and I’ve seen signals from the marketplace that entrepreneurs better heed: there are too many startups, too many things to try, too many apps that really don’t do much more than Google. -Robert Scoble
Maybe you just ran out of road on that route. -Dave Trott
Well, we’re all in showbiz now, walking on eggshells, relentlessly tending our customer base. We’re all selling something today, because even if we aren’t literally selling something (though thanks to the Internet as well as the entrepreneurial ideal, more and more of us are), we’re always selling ourselves. We use social media to create a product — to create a brand — and the product is us. We treat ourselves like little businesses, something to be managed and promoted. -William Deresiewicz
That company was once even more screwed up than you are. -Pierre Lamond
The real revolution is that you get to make waves, not just ride them. -Seth Godin
Why in the hell would I do that? -Joe Yevoli
A list of questions to ask when something goes wrong:
1. How are you going to handle the problem for the customer? Think about an immediate solution, delivered with the right attitude and a sense of urgency that will restore the customer’s confidence in you.
2. Why did it happen?
3. Has it happened before? If it has happened before, why did it happen again?
4. Can it happen again?
5. Can a process be put in place to prevent it from happening again?
6. Can you catch it before the customer calls you?
He pulled me aside and bluntly said “Josh, stop doing stupid shit. -Josh Infiesto
Given this stress, CEOs often make the one of the following two mistakes:
1. They take things too personally
2. They do not take things personally enough
Welcome to the show. -Sarah Lacey
Writing a post mortem is hard, particularly when the result is failure: a failed deal; a failed investment; a failed concept. That said, without a post mortem, without deep reflection, honesty and introspection, how can we get better and do better the next time? Quite simply, we can’t. -Roger Ehrenberg
Kirill’s rules of investing: 1) Don’t submit to peer pressure (Know thy market). 2) Don’t invest in things you don’t understand (Know thy product). 3)Don’t invest in people you don’t like (Know thy people). 4) Make the deal simple (Know thy deal). -Kirill Sheynkman
We started the company because we liked the idea and wanted to do something entrepreneurial. We weren’t in love with the idea or market we were going after, and weren’t core users of our product. -Ariel Diaz
I will never forget my first deal. It was tiny, but it was going to be my startup’s first paying customer and you fight for those pennies… After months cold calling, hundreds of calls, countless meetings, this was the only deal I had to show for it. We were halfway through a 3 month trial and rather than sit on it, our team decided to push for the long term commitment.
Keep in mind, it was November of 2008 and the fallout from the financial crisis was palpable. I was calling prospects only to find out that they’d been laid off…I had to close this deal.
I flew down to their offices to close the deal in person. I was nervous as hell but knew that I had them on the ropes. I had invested the time to develop rapport with my contact there, the Marketing Manager responsible for operational execution.
Our team had handled this account with kid gloves. Before the launch, we made sure to give ourselves wiggle room in case we underdelivered by discussing how it would take time convert their target audience and we may not see results until several after several campaigns had been run. This negotiation tactic is typically called planning a way out. I made sure to speak with my contact at least once a week during the campaigns and sent reports on our progress before every call. I established credibility by setting clear expectations and surpassing them in each and every interaction. I was early to meetings, sent updates before she asked for them, and addressed any issues head on without shirking responsibility.
She was pleased with the early indicators and more importantly, we’d become friends. This wasn’t some clichéd sales tactic. We talked about our families, our weekend plans. We were close, so close that she was advising me about how internal conversations were going, where the pain points really were and what buttons to press.
With that confidence, I attempted to assume the close by talking about how glad we were to continue working together. I opened aggressively: a 5 year commitment with a mid-tier price. Not the most aggressive pricing, but not cheap either. This would be a profitable deal for us. Now 5 years is a long time. Most people don’t even stay at the same company for 5 years. It’s an especially long time when your track record as a company is counted in months, not years. By starting with this highball, I hoped to make any incremental give seem reasonable in contrast. 3 years? That’s nothing…except a lifetime in startup years…
The three of us sat there, going back and forth and ultimatel, we ended exactly where I expected we would. I came down to 3 years after hemming and hawing, I came down on price a little, but not much. And then I made a fatal flaw. I shook hands and walked out. Without signing the papers. I hadn’t prepared the documents before walking into the room. None of that crossed my mind as I walked out of their offices.
I flew back to New York. Shared the good news with the founder of the company and our investors. We had our first client. And then waited. And waited. After three days passed without receiving the executed agreement, I called my contact. “Oh, it’s no problem, we just need final approval from our CEO.” Red flag. Big. Glaring. Red. Freakin. Flag. I had never spoken with this person. Had never teed up our positioning. Had never even known he would be involved in the decision.
And the deal never got done. If they don’t sign on the dotted line you don’t have a deal. Never forget that.