Succeeding with Failure

If you haven’t started a new venture yet, I am willing to bet that once you cut through all the crap it is most likely your fear of failure that has stopped you from taking that first step. I can’t count how many times my friends here in the college of business have had this “great idea” that they have totally flushed out with a well written business plan. They always try to push how this new idea fills a customer unmet need, has healthy margins with a conservative estimate and have a seemingly low barrier to entry. My first question is always “What are you waiting for?”

I am sure if you are reading this blog you have probably had a good idea, and perhaps you have even followed through with an implementation strategy, industry analysis/feasibility study etc. but haven’t pulled the trigger. What is stopping you? The bottom line is that talk is cheap, we are all afraid of failure and even the best can’t win 100% of the time.

Here are three of my personal failures that have only led to increased knowledge and awareness of my markets and overall business strategy.

#1: Ketch Computers
This failure is very mixed for me. On one hand it is my most profitable venture to date, and the fact that I started it while still in high school is a point that I am most proud of. However, with that said I certainly made some rookie mistakes that are now providing a compass for my current projects.

Success

• Quick start-up led to profits in the first week
• Found an immediate market need and was able to mobilize quickly
• Grew the client base on word of mouth and personal selling, no promotional cost

Failure

• Not creating a store front to allow customer to come to me without just calling
• Building a huge client list that was essentially just left to rot when I went to college
• Lack of copyrights, brand development etc. to have an entity I could have sold when I left

The biggest failure here was not leveraging Ketch Computers to it’s full potential. The revenues generated in this venture ended up financing most of my college and allowed for an experience that I would have had no other way of attaining with it. However the market demand was so strong that I was able to grow my business in a ridiculously short amount of time. But, that huge demand also meant that other people were assessing the market potential and what was once relatively cornered by me operating without a store front now has 5 small computer firms covering the same client base. That client base and brand equity should have been solidified by me, so that it could have been sold off when I needed to leave the area and allow for consolidation within the market instead of the fragmentation that currently exists.

#2: “Dad’s Weekend” T-Shirts

The idea behind this was a T-Shirt that highlighted the (at the time) growing success of the Washington State football team against an opponent that we were supposed to handily beat. We decided on a design with score boxes that would actually allow you to fill in the game score afterwards to really drive home the personal feeling of the shirt and show off how much we beat the opponent by. The only problem here is that we “Couged” the game and lost pretty shamefully. Before the game we had almost broken even, but unfortunately no one wanted a token to remember the game by, especially one that highlights the ability to fill in the score. The lessons learned were:

Success

• Learned a huge deal about how to price things in the consumer market
• Figured out the need for wide distribution
• Pre-sales do work, but need consolidation in order to be financially feasible

Failure

• The project lost money
• Wider distribution would have allowed for more sales pre-game time and would have likely led to profitability
• The business model banked on school’s pride and an expected win which was handily upset and killed product demand
• The price was too low, low price signals a lot about quality and perceived rarity of your product to consumers

#3: DropBx {Subsidized Clothing}

I had the grand idea of building a business that would profit through subsidies on consumer grade products. The idea was that by allowing targeted graphical advertising on clothing (especially t-shirts and handouts) we would be able to create a quality match between relevant consumers/small businesses and name brands. A basic example would be an online shopping experience that a greek system (let’s say fraternity) could upload a t-shirt design that would extrapolate price (drop-shipping to avoid inventory overhead), and match up sponsored graphical ad zones on the products. So if Coca-Cola wanted to increase the brand awareness in Pullman, WA with males, and a Fraternity in Pullman, WA was developing a t-shirt order Coke could subsidize their production cost with an advertisement.

The users would win by having a significantly lower price point on their product, which the greek system generally is a volume consumer of such goods. The advertiser wins by having a low cost to reach their target audience for an extended period of time (think of how many times you wear an event shirt, I bet it’s at least the magical 3 times). And lastly, we would win by taking a commission from the drop-shipping as well as from the advertising for facilitating the consumer, advertiser and producer relationship. In essence, the more advertisements a consumer allows, the less they pay for the product and the higher the total selling price for us would have been ( drop-ship + advertisements = total revenues). I ultimately scrapped the idea and just redirected the domain (dropbx.com) to my newest project.

Success

• Had the opportunity to conduct a true feasibility study with consumers
• Understood the market need by the consumers
• Quantified the amount of technical work required for such a site

Failures

• New medium feels risky for advertisers
• Brand exclusivity is hard to guarantee without human verification
• Brand association is so unique to each brand, it is difficult to control (Does Coke want to be associated with binge drinking?)

The conclusion here is that if it weren’t for these three experiences that were tainted with failure, I would not have been able to move forward with my current initiatives and have the same insight into an industry that I do today. I am now able to avoid some of the larger potholes in development and quickly get a feel for a product or services success in areas that I have already felt out. So if you can’t come up with at least 3 concrete reasons to not start your new business, then you need to dive in head first because without that experience you will never have the opportunity to make it work.

The biggest regrets in life should be the chances to regret that you never took.

Tagged as: failure, sucess

About Travis Ketchum
A smart ass marketer who doesn't take no for an answer and always questions the status quo. Connect with me on Google+.

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