What my business failures have taught me
On the 10th anniversary of Pure SEO, Richard Conway reflects on how his early business failures contributed to greater success further down the track. Having celebrated the 10th birthday of Pure SEO last week, I feel both privileged and humbled to see what we have built and the lives we have affected. Whilst Pure SEO has […]
On the 10th anniversary of Pure SEO, Richard Conway reflects on how his early business failures contributed to greater success further down the track.
Having celebrated the 10th birthday of Pure SEO last week, I feel both privileged and humbled to see what we have built and the lives we have affected.
Whilst Pure SEO has been a great success, I have started or been involved with a number of businesses that have not been so successful. Almost every entrepreneur has had business failures in their life, fortunately each of those can become valuable learning experiences that contribute to later successes.
My first real foray into business was when I had just turned 15 years old. I started a patio cleaning business with a friend of mine. We rented a pressure washer and started door knocking to drum up business. We booked in lots of patios and driveways to wash and agreed to go 50/50 on all the profits. Because it was coming up to exam time, each of us would need to take some time off the day before our actual exams. We agreed the other would fill in and we would make the time up over the following weeks.
One week, my friend had to fill in for me. Once we got paid, he decided he was going to get the majority of the money (because he did the majority of the work on that job). This was contrary to what we had agreed and shaken hands on. Ultimately, because of this, we closed the business and I learnt a valuable lesson – make sure you have aligned values with your business partners, if not the business is likely to fail. (Unfortunately, I have repeated this mistake since).
Because of this history, now with any verbal/handshake agreement I ensure I get something in writing and I try my utmost to only be in business with people that have similar business values.
When I first moved to New Zealand, I started an insurance aggregation business (comparing car, home and contents insurance). This did not exist in New Zealand but was a mature and thriving industry in the UK. I managed to put together an excellent team with an exceptional skillset (former insurance CEOs, very successful entrepreneurs and technical leads).
Whilst the business did not succeed (we could not convince enough insurers to come on board to make a viable product and I decided not to appear on Fair Go to challenge them!).
I learnt a huge amount in the process and met people who are still influential in my business today.
One mistake we made at the outset was that we approached marketing managers. Whilst the marketing managers were great people, we wasted a huge amount of time. They would chat with us, agree it was a great idea, but ultimately nothing would happen.
As soon as we decided to approach only board-level executives (CEO, CTO. etc) things started to happen and decisions were actually made.
Since then I always try and start at the top; if the CEO delegates to someone lower, there is movement. If you approach someone less senior, it is often more hassle than benefit for them to pursue it.
In 2011, I invested $10k to buy 40 percent of a sports clothing brand. I mainly invested because the founder and majority shareholder was a very gifted designer and immersed in the world of endurance sport.
The brand and product were excellent and at the start everything seemed to be going well. But ultimately the business failed. I believe the main reason for this was that the majority shareholder (and driving force) was too emotionally attached to their vision; they were blinkered to what the market and external advisors were telling them. For example, the imagery on the website featured semi-professional athletes. Unfortunately the athletes he used and the imagery he chose were extremely raw. He would have been far better off using aesthetically-pleasing imagery (which could still be raw – much like brands such as 2XU use).
Also, the marketing for the business was focused on too niche an audience and needed to be opened to those on the fringe using a good social media strategy.
A year or two later I started an online office chair drop-shipping company. The concept behind the business was simple. Drive leads through digital marketing, take orders online and use the wholesale function to fulfil the orders directly, no human interaction. The brand of chairs was well known, trusted and high quality.
The reason the business was not successful (although it was profitable), was that when people ordered online it was only for small quantities. Whenever there was interest in an order of any volume, the potential purchaser wanted to come to a showroom and spend time with a real person. The main lesson I learnt with this business was that things are often not as simple as you initially think, even if on the surface it looks easy, there is often a level of complexity that is not initially apparent.
Fortunately with all the businesses I have had involvement with, there have never been people left out of pocket and each time I have learnt valuable lessons.
Over the years I have also signed clients who I met through these other ventures and have created valuable business contacts that I still rely on today.
As an entrepreneur, it is important to weigh the risks for each business opportunity and be comfortable with the exposure you have, or a ‘worst case’ scenario.
Always remember to fail fast, learn and adapt.