Through pure luck we gained the attention of a semi-retired ex-executive VP who had worked with a top 5 marketing agency in the US. We immediately formed a partnership with him leading the sales and us developing the product lines. We were able to quickly gain in roads into companies such as The LA Times, Toyota, Dolce&Gabbana, and a few other big name companies.
By now you are probably thinking wow you struck it big, and at this point in time we thought the same thing. And this is what led to problems. First, in dealing with bigger companies such as this the sales cycle lasted a LOT longer than we anticipated. We were burning major cash just to touch these clients. With letters of intent and credit notes from the clients in hand we borrowed, borrowed, and borrowed more. But the problem was that our development hit snag after snag and was delayed extensively over time. The clients lost hope and we began to see the walls come crashing down just as quickly as they went up. In the end we walked away with nothing but debt and a couple torn relationships.
Lessons learned:
1. Focus on a single product. Don't over extend yourself. 2. Make sure you at least have a working MVP before opening the sales gate. 3. Be prepared for delays in the sales cycle. Don't expect the money to come overnight or at times even within the same month (especially true when dealing with big name clients). 4. Make sure you have a strong leader and strong core team. One of our biggest downfalls was that we had to many chefs in the kitchen each trying to put their own ingredients in the pot. It was a nightmare. Don't be concerned with titles when getting started, but make sure everyone knows what their position is. Make sure there is one leader that is capable of handling the management. 5. DO NOT hire a marketing/PR company when you are getting started. As we started to gain attention and began talking with investors one of the things we did was hire a marketing agency to help us define our pitch. A big mistake and waste of money. 6. Make sure you have a strong attorney who is capable. We had a great attorney who helped us extensively, even in the worst of times and even when we were unable to pay him on time. 7. Don't spend cash you don't have in the bank already. 8. Related to #4 above, make sure your co-founder(s) all have a stake in the success/failure of the company and choose them wisely. I had some great co-founders, but I had given up everything to pursue the dream. They in turn each had something to fall back on. While their drive was great, they also knew that if it failed they could go back to their day jobs the next day. Me on the other hand I didn't have that instant fallback. 9. Get your sleep and eat well. I gained almost 50 pounds during this time period. It came from eating on the go constantly and sleeping for an hour here and hour there.
I know a lot of these are common sense and I look back now thinking what in the world were we thinking at the time. How could we F-up so bad. But in the end the fast moving nature of the company coupled with visions of huge success in our heads easily distracted us from the bigger, and true, picture. We were enticed by the big money, when we should have focused on just getting the product completed and the business itself. We are still cleaning up some of the mess, but are at least moving in the right direction now.
In the end we are back to the drawing board again. We have a new product that we are working on, but you better believe we are taking a completely different approach.
On a side note, I think this is a great post topic. Learning from others is valuable. But more importantly, if you can admit your mistakes, work to correct them, and move on from there it will only improve your chances of success in the future. One thing I have learned is not to criticize others for their mistakes. Everyone is going to make them, it is how you recover from them that makes you a better person.