5 Huge Mistakes I Made In My First Business.

When I decided to post on LinkedIn, I promised myself I wouldn’t just talk about success.?

That’s not representative of reality– especially founder life.

And when I digitised my family’s music business I made every mistake in the book. Every. Single. One.

Here are 5 of those many big mistakes (we’d be here for years if I detailed all of them).?

And some learnings too !

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5 Huge Mistakes I Made In My First Business?

I worked in my family’s music business from the age of 12 (probably not legal now!). Then I went to uni, dropped out after 6 weeks and took over the business aged 19.?

I am a non-technical founder (I don’t code) but chose to digitise the brick-and-mortar business my family had been running for 25 years.?

I saw the massive value in putting tech behind a “traditional business” to bring in more revenue and increase our efficiency and ability to grow (something I preach about a lot these days and see as the biggest opportunity within the tech startup world).?

We did take it from it being on its knees to doing well with 20 staff but I made A LOT of mistakes. Big ones. Ones that I still see founders making now.?

I always want to show both sides of the founder experience, success and failures, so these are the huge mistakes I made in my first business.?

1. I got burnt by the development agencies building my product.

Because I don’t code, the only route available to digitise at the time was working with a development agency. I had no idea what a tech stack was, what languages were the right or wrong ones, how to product manage or how much control I was supposed to have.?

So, the inevitable happened.?

I committed to a fixed scope that inevitably wasn’t right, the agency did the product work so didn’t build the right thing (they didn’t have a dedicated product team), they weren’t transparent and would come back every two or three weeks with their progress (or lack of)– there was absolutely no alignment at all.

Not only did this happen once or twice but three times. I lost a lot of money and a lot of time– it was nearly catastrophic.?

This is why these days I advise people (other than working with us, of course) to work with an agency that:?

• Challenges founder throughout and pushes back, not just building exactly what they are told.?
• Uses their previous experience to inform their decisions with the current project.
• Makes sure the founder is always in control.
• Has a product team to advise on what should be built and when.
• Had a track record of successful work with startups specifically.?

An agency-founder relationship is truly complex and extremely difficult. I experienced it the extremely hard way.

2. I didn’t bring on a HR company straight away.?

This mistake ends in a lawsuit, so it’s safe to say it was a pretty huge one !

Going from a family business to hiring external staff, I didn’t think to bring on a HR function. I wrote employment contracts myself or didn’t have the right ones in place, big big mistake.?

This meant when I rightfully came around to having to make tough decisions with who we had in the business, I got caught out.?

Not having the right provisions in place opens you up to a bunch of problems in future with many things, especially HR. In my case a lawsuit.?

There are really good HR companies for a couple of hundred pounds a month. We’ve used Peninsula for many years, they are very good.?

Your task is to build a great product and functioning business… not to be an expert in contracts and HR stuff. For me, putting them together on the fly was a terrible idea.?

3. I built in silo without speaking to customers.?

When I was digitising my family’s offline business I would often have an idea of a feature/product that could be good for a customer– a dashboard, for example. One route we thought could work was digitising the musical instrument rental process.?

But, rather than building it with our customers we just built it in silo, took a long time to do it, and didn’t launch fast enough. When we eventually launched, customers were using it in a totally different way to what we thought, it had features we didn’t even need, and we’d wasted a huge amount of time and money.?

Even in the very early days with Ucreate (now Founder and Lightning), we took far too much guidance from the founder. We built a restaurant booking app that ended up having 360 tours, a splitting bill feature and a bunch of other features– we took on a load of competition that did these individual things 10x better.?

We built this in silo too. The founder kept saying: “my investors will invest if we build this”, rather than building what the user really needed.?

This founder didn’t even end up paying us either ! So all around huge mistakes were made.?

This is probably one of the most common mistakes I see even to this day. You need to build with users, it’s who the product is for.?

4. I focused on revenue over profit.

In this first business, I became obsessed with revenue and didn’t look enough at the profit.?

It looked like we were doing well, but because I had a business that sold stock, that stock just sat in a warehouse– if we didn’t monetize it, we had to pay for it.?

I just laser-focused on shifting stock but when we looked at the numbers we didn’t have enough to cover our overheads.

It totally changed my perspective from that mistake. If you aren’t making profit, you are pushing problems further down the line.?

Even for tech companies, ignoring profit is a big mistake and another mistake I see founders making really regularly.?

Get to revenue as soon as possible and prioritise profit as soon as possible.?

5. I hired too many people and didn’t pay them enough.?

Early days, I hired a bunch of people (way too many) which meant I couldn’t pay them each enough to make them happy.?

Inevitably it led to issues– rightfully unhappy and unmotivated people that eventually left the company.?

My learning from that experience is to hire less people and pay them the most the business can afford.?

People joining a startup won’t expect corporate salaries to begin with, but won’t stay with you long term if you can’t pay them well? - and you will not get the best talent.?

Your business model must have a long-term strategy to be able to generate the revenue to bring in great people. The founder is in control of that model.?

Later on, I then made the mistake of hiring too many senior people who needed huge teams around them. They were thinkers, not doers, and it was costly to pay C-suite salaries and full teams of people.??

Now, I’ve discovered something that works great for me, and the business - which is hiring really really good people who aren’t quite at C-suite just yet, and helping them get to that next level. Businesses need bold, brave, doers, who you can support to level up.?

Hire less, pay well and help people get up to the next level.?

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– Matt?