Throwing in the Towel: The Lessons I Learned as a Failed Entrepreneur

Shutting down my business was not an easy decision. My partner and I invested a lot of time and money into trying to make our business dreams into a reality. The problem was, that reality consisted of us being very good at setting up our business, but not so great at expanding it.

I learned a thing or two about myself throughout this experience:

  1. I’m great at setting up a business.
  2. I’m terrible at selling, particularly cold sells.
  3. I love coming up with marketing solutions.
  4. I hate dealing with customer’s complaints on a retail level.
  5. I can be both detail and big-picture oriented.
  6. I can really become demotivated by working completely on my own.

There are probably a million others but I don’t want to bore you with them all. The point is, that for every victory achieved and every mistake made, I learned something very valuable about myself. Although, I came out a net loss financially, I probably learned more in this experience than in any other in my life.

That said, one of the most important lessons I learned was when to throw in the towel. If you’ve ever invested in anything you have to have an exit strategy, no matter what the investment. Having invested in the stock market, both winning and losing, I knew that there was a point in time in which we had to pack it in if it wasn’t meeting our expectations. Here are a few of the indicators:

  1. First and foremost, we weren’t profiting off of our venture.
  2. Both my partner and I had lost the enthusiasm we had when we started out.
  3. Neither of us were willing to invest further into our venture.
  4. No one else was willing to invest in our venture.

I still believe in our business model, but without the proper motivation and funding, nothing was going to happen.

I would like to thank everyone who took the time to help us out, supported us, and gave us the opportunity to launch our company: Jeeves Valet Dry Cleaning. Everyone of you, and you know who you are, have been an inspiration to this humble entrepreneur: Thank you!

That being said I would like to turn the page to the future of my career in web and e-commerce analytics in the startup business world. I will be changing my blog focus to discuss topics in these areas and I would love for all of you to join me in these discussions.

Until we meet again, entrepreneurship!

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Group buying deal revisited: Was it successful?

With any promotion, especially a new one, you always have to wait to find out whether it was successful or not. Despite the fact that with group buying site promotions you pay per voucher sold, and despite the fact that you receive payment from the advertiser (Teambuy in this case), there is still an enormous cost and risk associated with this type of promotion.

Finding out whether or not the promotion was truly successful or not may take months but it is important to track its effectiveness afterwards, and not just for  a few months, but for years (take look at a cohort analysis if you haven’t already before). For this scenario we are only a month-and-a-half in and we a are new company, which makes it difficult to compare and really measure our success so far but this doesn’t mean we can’t start analyzing it. Here are a few things that we’ve considered already:

  • Have our revenues increased?
  • Have our revenues less discounts increased?
  • Do we have repeat customers?
  • Are we covering increased costs?

Our answers for the first three are all ‘yes,’ but our costs may take more time to solve. We’ve smashed our record for revenues even with discounts and we have repeat customers. As many as we would like? No, but it may be too early to tell still.

When we dig deeper we realize that previous customers did not increase spending at all. Almost, all of our increased revenues came from new Teambuy customers putting more emphasis on a successful campaign thus far.

Does the campaign cover its cost? Have we increased our customer base? Have we received a sufficient amount of repeat customers? Has this been profitable?

Until our vouchers expire in December these are all questions we will not be able to fully answer but analyzing the deal before it ends is just as important as analyzing it afterwards.

Here is some extra reading if you’re hungry for more ways to analyze group deal success:

http://mashable.com/2011/07/11/measure-group-buying-deals/