Business development 29 September 2015

Lessons from failure: Why I had to let my small business go

Dan Sodergren has some valuable tips for early-stage business builders
Dan Sodergren has some valuable tips for early-stage business builders

Profit

Investor money isn’t real money.

Some people argue that investors might be a bad thing for starting a business. The money they give you might retard what you are trying to do. The capital they invest might be a crutch. However, we live in the world of capitalism, and this needs capital for big ideas.

However, for some ideas, you can start and crowdfund, for others you can bootstrap. Building tech startup’s usually needs a lot of money from somewhere – but only take what you need. If you are well funded – you might already be dead. Investor money isn’t real money. What’s real money is the money customers give you for the value you add to their lives.

Know your customers and at very least like them.

Picking the right demographic for your startup is crucially important. They need to want to give you money, have money to give you, and hopefully wish to tell other people like them about your product or service. This part can make or break your startup. It’s not the same for other brands but it is for you. You will probably need something to be social or go viral.
Another key thing is for you to like the customers you serve. Maybe not love them but at least like them. If you are not liking the idea of meeting your customer, you either need a different product/service or new customers and quickly.

Profit comes with purpose – not the other way around.​

Picking the right customer, not moving away from your path, liking your cofounders, having a company vision that creates a positive culture that people can buy into, all relates to having a purpose. Purpose is what gives you motivation. It gives you the drive to keep going. Lose this and the best business plan in the world will not save you. Your customers will know, your investors will know, you will know. As Simon Sinek says, “start with your why”.

You need to connect with your WHY.

Conclusion

Having a startup is hard and emotional. And you often fail. It’s part of the process. So I would do Follogro again in a heartbeat. But it would need to be a new idea. And this new idea would need to align with my purpose, probably get crowdfunded, be with people I like and trust, for customers I love, and perhaps work in giving something back to the world.
It’s a lot to ask, but it’s better than expecting different results from doing the same things. This, as Einstein reminds us, is insanity. I like being a little crazy in business but insanity I fear would help no one.

About the author:

Dan Sodergren is a professional speaker and digital marketing trainer. He specialises in mobile and social marketing with ideas ranging from augmented reality, to RTB and back again. He trains companies and individuals in best practice on social and mobile marketing platforms with Great Marketing Works, works with young people with PeoplePlus and gets to talk about it all on radio and stages around the world and is even occasionally seen on the BBC.

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Business development