Tom Markiewicz

I’ve been trying to write about the lessons learned from the failure of my last company (albeit quite slowly) and I read a post this morning from Mike McDerment of FreshBooks that covers some similar topics.

His post is titled 7 ways I’ve almost killed FreshBooks and I can second every single point he makes. Luckily for FreshBooks, they’re still around and thriving.

I especially appreciated his first point - “Thinking we had to move faster than we did”

As entrepreneurs, we tend to immediately feel the pressure of getting our idea to market as quickly as possible. We have some paranoia (good perhaps?) and believe that another company will out-execute us and leave our company behind.

In the long run, it’s much more important to do things right as opposed to doing them as fast as possible. Obviously there’s a fine line here, but stepping back every once in a while to review before making that next move can be a good practice to follow.

A good idea is just that - an idea. It takes execution to build a great company and this is where many fail. Full execution of your strategy may take some time and there’s nothing wrong with that. Rushing forward as fast as possible is not always the best move.

With the new-found popularity of agile development and business processes (which I’ve been endorsing for many years now), I think some entrepreneurs are forgetting that an overall strategic plan is still important. You don’t necessarily need a full fledged, 200 page written business plan. But having a high level strategic plan will definitely enable you to stay on track and hopefully avoid some of the issues with feeling the need to take certain actions prematurely.

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The lessons learned from the failure of my company are going to be in no particular order, so I decided to start with one that I’m already applying to my next project - creating admin tools as early as possible.

With FeedCraft, we took the approach of getting the application launched as quickly as possible with the main features we needed (which I think was wise, but I’ll have some thoughts on this in later posts). In the rush to launch, we put off developing admin tools such as user management, basic content management, and some support related items.

Simple database scripts written in SQL (that steadily ballooned) managed many of these tasks with the initial thought that 1) we didn’t have many users yet and 2) we would add in a robust admin system after launch when we had the time.

I think you can see the obvious problem here. You never have that time after launch to create these tools. The same logic that stopped us from developing them before launch (lower priority) kept them from being developed after launch. There was always something that appeared to be more important in the grander scheme of acquiring revenue.

Unfortunately, the ability to better manage your business, while not always directly correlated to immediately generating income, is often overlooked in the beginning. It’s quite easy to forget about the cost of our time, especially as founders, but it quickly adds up with each task that could have been automated or made more efficient by building admin tools.

Over time there were too many tasks that were not in one central location, enabling others a simple way to manage them.

Here are a few examples of some of the parts of an admin interface that could be added for maximum impact at the beginning of an application’s development as opposed to the middle or end:

• user management (add, edit, delete, activate, deactivate)
• role management
• content management - basic addition, updating, and deletion of content on the site
• CRUD functionality for relevant models - updating content that will be displayed throughout the site; ex. categories, account types, etc.
• support - ex. manage contact forms, feedback, support requests
• e-commerce support - within your own app and not directly on the gateway’s site

Adding admin tools does not need to be a major, separate project. The approach I’m now taking is to add admin functionality as needed along with the rest of the project.

I learned the hard way about putting administration off, so now they’re added directly on the product roadmap so we don’t overlook them.

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I woke up on my birthday this past Saturday morning and thought about the day ahead. What did I want to do today?

I think it says a lot about where your passions lie, when on a day you can legitimately do most anything you want (a birthday and a Saturday), on how you plan your activities.

For me, far in advance I knew I wanted to go climbing. Unfortunately, the weather was not cooperating. Apart from climbing, I really wanted to work on my new project (a soon to be announced web application). And after a few good hours of working, to then spend the afternoon and evening with my wife.

The point I’m trying to make is that you need a strong passion for your idea to be an entrepreneur. How many normal people choose to work on a day off where most would relax?

Let me be clear that I’m not necessarily advocating all work and no play (hey I wanted to go climbing on Saturday). And I wholeheartedly believe in the notion of work-life balance. But I think what you want to do in your “free” time can tell you a lot.

I’m not sure it’s enough to simply have a business idea and work towards execution. It takes more than that. That’s where passion for what you trying to accomplish comes in. The passion simply must be there. Otherwise, when you’re discouraged or frustrated or flat out exhausted you will keep working and press on.

One of my favorite quotes touches on this:

It is not the critic who counts, not the one who points out how the
strong man stumbled or how the doer of deeds might have done better.
The credit belongs to the man who is actually in the arena, whose
face is marred with sweat and dust and blood; who strives valiantly;
who errs and comes short again and again; who knows the great
enthusiasms, the great devotions, and spends himself in a worthy
cause; who, if he wins, knows the triumph of high achievement; and
who, if he fails, at least fails while daring greatly, so that his
place shall never be with those cold and timid souls who know
neither victory or defeat. - Theodore Roosevelt

Where does persistence and drive come from? Maybe a deep passion for what we’re doing?

So the next time you’re trying to start on your next big idea, take note of what you feel like doing that Saturday morning.

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Many say you learn more from your failures than your successes. I believe this to be absolutely true in business as well as most other aspects of life. And you can also learn quite a bit from the stories of failures from others.

So, as promised when I announced that my company was shutting down, I’ll be posting a collection of thoughts on what I feel are some of the big learning lessons in this experience of running an Internet startup and its subsequent failure.

When I talk to non-entrepreneurs about what occurred, I often get a sad “I’m so sorry that happened” kind of reaction on the startup’s failure. For an entrepreneur though, it’s honestly the opposite sentiment (or at least it should be in order to be successful).

Failure for an entrepreneur is like a badge of honor. You will start another company and now you have the benefit of a whole host of prior mistakes than can hopefully be avoided. Very few successful entrepreneurs have had success without failures (usually large ones) along the way.

This may sound like a rationalization of business failure, but there are numerous examples.

Many of my lessons learned will be in relation to a web-based startup, but even these still tend to be applicable to any business.

Either way, I hope the examination of my specific mistakes help other entrepreneurs (and those looking to become one) and spark further discussion so we can all learn.

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The other day I had the opportunity to have coffee with a student entrepreneur from Virginia Tech. This is the second such meeting in a month and I hope it’s a sign of future trends. Over the past two semesters, I’ve met with three entrepreneurs, all at the end stages of their undergraduate education, and all were pondering this decision - take a “regular” job or start my own business.

In my opinion, the decision is a no-brainer. Follow your passions and start a company. At this point in your career, it will not look bad on your resume if the business fails and you need to go work for someone else. If anything, the experience of starting and running your own company should count for much more experience than the equivalent time in a fresh-out-of-college job. This is generally the case unless the hiring manager is not very good at what they do, but that is an entirely different subject.

The other factors to consider are the opportunity costs and the risks of failure. Starting a business full-time as opposed to taking a job leaves potential salary income on the table. This is the opportunity cost while trying to pursue the entrepreneurial career.

How much do I need the income that a normal job will provide? What are my current living expenses? How long will it take for me to generate enough income in my venture to cover these living expenses? And do I have any savings to cushion this or provide backup? These are the questions to ask yourself.

Graduating students have a unique financial situation for the most part. They have minimal financial responsibilities compared to their older counterparts. No kids, no mortgage, and likely their debt is credit cards and student loans - both of which can be managed with smaller monthly payments. If the business completely fails, the financial ramifications can be much less devastating than if an entire family was supported by the entrepreneur.

I Twittered these thoughts yesterday and received some interesting feedback. One response was that it is expensive to start a company and can be difficult for a young entrepreneur to raise capital even from friends and family. I can’t disagree more with this statement.

The cost of starting a business can be extremely low. It all depends on what you’re trying to accomplish. If the company is going to be in consulting or another type of service business, the costs are minimal. Company formation can be done online inexpensively via services like LegalZoom and many of the basic business management tools are available online from free to low cost.

If it’s a Internet based business, again the costs are low. The same application that would have taken hundreds of thousands of dollars to build a few years ago is now in the tens of thousands (if not less via offshoring). Server and other infrastructure costs have dramatically fallen. And if you’re a technical founder, you’ll be doing much (all?) of the development work yourself, so it’s not that hard to build something and launch it for minimal costs.

Obviously, none of this applies if your business idea is to start a new biotech company or a micro brewery or a semiconductor manufacturer. Yes, these require large amounts of capital to get started. But it’s quite possible, with the right idea, to start small and learn quickly.

It’s easy to get started (especially as a young entrepreneur), but I’m not necessarily implying it’s easy to become successful. That will be the topic of some future posts.

UPDATE: For more discussion of student entrepreneurs, Rob McNealy of Startup Story Radio is currently running a series of podcasts with a successful young entrepreneurs.

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Last month I announced to all our FeedCraft customers that EvolvePoint would be shutting down the service. I’ll be writing more about why I think the product did not become as successful as planned; but regardless of the reasons, the economic realities made the decision inevitable.

I founded EvolvePoint in 2004 initially performing management and IT consulting work in the Washington DC area. In 2005, I moved the company to Blacksburg, Virginia to be part of the VT KnowledgeWorks program and focus on our main product, FeedCraft.

Now that FeedCraft is closing, I have also decided that it’s appropriate to close EvolvePoint and start fresh with the next venture (more on that in an upcoming post).

I learned a lot over the past three years and even though the product failed, the entire process was a success in many ways. Throughout the process I made many mistakes and hopefully learned enough to avoid making them in the future. I’ve already started writing a series of posts covering some of what I learned. Not only do I hope this helps other entrepreneurs, but I also believe by writing these lessons down they’ll help me in the future.

As a side note, we’re selling the FeedCraft assets. If you have interest, please contact me.

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