So it all started In late 2013, me (Praveen) right after my engineering degree, was in full swing, dreaming about creating a company. I’ve started freelancing as an animator creating custom made explainer videos and went on to create a company with 20 employees at a point, which contains my hard work, sleepless nights, day dreams, strategies, people. In late 2014, everything started collapsing, the small empire I built on my own, which I considered as my pride, became nothing by the end of 2014.
A great shock I faced till now, in my 23 years of life. Something I strongly believed that won’t be a failure sank in just 1 year, which made me mad, but eventually I realized to figure out what went wrong. Here is the list of Top 5 mistakes I’ve done in my first startup.
I’m a believer of bootstrapping. I believe anyone can create a great company without money, I was wrong. In my first business, I’ve started with $500 in our bank account. No wonder we managed to make a turnaround of $40,000 in the first year, we lacked capital. Because of this, me and my partner were forced to concentrate on short-term marketing tricks and threw long-term marketing out of the window. Things went well few months, but didn’t last longer.
Takeaway : Never start a business without enough runway. It will lead you to fail soon.
We’re from India and our monthly expenses were damn low than our US or UK competitors. At first, our monthly expense was around $1050 which includes a beautiful office, 2 employees, my salary and maintenance. Damn low, right? Even then, I failed at it. We started to get a good number of orders in the month of January and continued to February, where I decided to move to a bigger office, more staff and off-course more expenses. While our revenue is stable ($1200 a month), our expenses gone rocket mode, just like the one you see on the right. From $1050 a month, to $3500 a month. Ah, deadly mistakes man!
Takeaway : Increase your expense only if you can. If your income is not meeting your expense, you’re in serious trouble.
POOR MARKETING STRATEGY
We all know long term strategies will always work. So do I, but the situation I was in didn’t allow me to focus on them. In the 1 year of marketing, we always gave discounts. Every month, we ran offers, giveaways, commissions, email marketing just to be alive. Working just to be alive is never a startup, it’s a business that earns the founder a monthly wage. Now, with Live Chat Ninjas, we’re concentrating on content marketing, making friends, meeting Influencers and getting things done. This, is a Startup. I always wish I could do the same when I’ve started.
Takeaway : Create your marketing strategy. Aim for the long-term, short-term results are always short.
FAULTY BUSINESS MODEL
My previous business was an agency then. Chasing customers every month, producing custom made explainer videos and trying to save few bucks out of it. The Agency model is just trash, the only way to work it out is to have larger capitals and lots of contacts (pure opposite of our mistakes #1 & #3). But even then, you need to chase new customers project-after-project, month-after-month, year-after-year. It’s too hectic and boring. Know what we got working hard with our faulty model? well, we managed to earn -$2000 per month. Yeah, debts!
Takeaway : Work on a business model that grows, makes recurring customers and have enjoyable daily tasks. Something like WPCurve.com or LeadFuze.com
Yeah absolutely. Why won’t I do that? In the 1 year of our business, halfway through, I sensed something wrong, something like we’re going to fall. But then, instead of working on stabilizing the business and fixing things that broke, I’ve diverted to start other businesses. Thinking of new business models and neglecting the one you already have, is a big no-no. Turned out, I didn’t believe what I’m doing in the first place. Now with Live Chat Ninjas, I’m invested. Talking with Influencers, helping people, writing content and building a business, something that I really believe.
Takeaway : If you start a business, believe in it 100%. If not, you’ll be easily diverted to other things, ultimately resulting your business to fail.
How are they? seems obvious? well, you can’t sense them when these mistakes are happening in your company, you’ll never know. The best way to overcome this is to keep an eye on what you’re doing with your business 24/7.
I’ve got this idea of providing 24/6 Live Chat Agents to online businesses from my past experience with Live Chat, they work really great in traffic conversions to leads. At the same time, I’ve started following Dan Norris from WPCurve and read his book “The 7 Day Startup“, which introduced me to the concept of productizing a service. Now, I’m here with few customers, in which Dan Norris is one? , making a monthly recurring revenue and growing.
Have you done any of these deadly mistakes in your first business? any other mistakes you did? let me know in the comments below.
P.S. : I’ll be writing in more detail on how we did those mistakes in the coming blog posts. Subscribe to our email list and make sure you wont miss any.