“Success consists of going form failure to failure without loss of enthusiasm.” — Winston Churchill
My first business failed, miserably.
My second business was a rocky ride, but eventually found a firm foundation.
And, my third company managed to succeed in many of the ways I hoped my first and second would.
The moral of the story: Try, try again and no matter what, never give up. But remember, giving up isn’t the same thing as hitting the restart button.
After launching three separate startups, two of which are still operating today, I have friends and colleagues that always ask the same question: “How did you beat the odds?”
Based on my personal entrepreneurial pursuits, here’s an inside look at a few foundational clues that will help you reach your goals and become financially independent on your terms.
Live a little, learn a lot
I dropped out of college my freshman year. (This is not advisable, but it certainly isn’t fatal.) Some entrepreneurs point to the benefits of taking a gap year, a year spent between high school and college for traveling and living a little, to experience life and better define your passions. I look at college through a slightly different lens.
Having a degree or an MBA from a reputable school can open doors, but you’re much more likely to end up working to build someone else’s dream. While a degree may be required in certain lines of work, it’s not the golden ticket to startup success.
'For me, college represented an ongoing discussion on theory in a world driven by experience.'Click To Tweet
There’s nothing wrong with college, but for me college represented an ongoing discussion on theory in a world driven by experience. If there was a way for me to monetize the courses I was taking, to understand their value on the free-market, I would have likely stayed. But a degree represents a massive investment of time, money and opportunity cost in order to gamble that the knowledge and connections will pay-off.
I acknowledge that many college graduates find amazing jobs, or an easier path to startup funding as a result of their education. I salute them for selecting a course and seeing it through. But, for me, I had a burning desire to get out and experience the world that was being described in my macro-economic courses.
I opted to drop out and have a tough conversation with my parents. Then, I chose to be completely self-funded in life. I picked up jobs to earn income and save capital. I used the time spent outside of my day jobs to launch my business.
Due to this choice, everything I did had an immediate consequence. I knew the value of my actions within a few weeks, rather than the four years (or more) a college degree required.
Focus, determination and traction are precursors to success
Based on real-time market feedback, I was able to structure my efforts around things that helped push my first business forward. In a matter of days, I could learn and experience (the hard way) each of the lessons being taught in my university business courses.
My eyes were opened when I summoned the courage to start pitching my growing startup to investors. I thought I would be laughed out of the room, and need to continue grinding away, using my limited resources from my job at a local fast food restaurant.
It turns out, investors pay attention when you tell them: “Hi, I’ve started a business and we currently have X customers with an average acquisition cost of XYZ. Over the course of their relationship with us, we’ve seen that they provide X dollars of profit per transaction, and X dollars of revenue per year.”
I, of course, had the business plan to back-up my claims, combined with the real-world track-record of my fledgling startup. By pouring every minute of spare time into my venture, I was able to do things that paved the road for the right VC to provide capital and grow the system I was developing.
My first startup successfully raised more than $100,000 in investor capital from two VC’s willing to take a risk on a college dropout with a passion for grinding through obstacles, and a proven track record of market traction (on a very limited basis).
Failure is not fatal, it’s valuable
Within two years of raising investment capital from my new partners, we had to shut the doors. It was the most difficult decision of my life. This was my baby, and although I had proven the model could work, the Great Recession proved that it’s possible for the world to change in the blink of an eye.
I had become complacent, convinced that my model was a success. It turns out, taking your eye off the ball, and focusing on building infrastructure to rapidly expand isn’t always the best move.
We hired more than fifteen people in a single year to help grow. The revenue was solid, but we weren’t generating the ROI necessary to fund our expansion.
I could blame the failure of my first startup on the Great Recession. Sure, we had $967,000 in annual revenue, and we could have probably raised the necessary second round of funding if the economy hadn’t tanked. But, I had made a consequential mistake.
'Never count your market share before it’s acquired.'Click To Tweet
I built the infrastructure before building the customer base to support it. Lesson learned: Never count your market share before it’s acquired. If you expand too quickly, you’ll find yourself overleveraged and at the mercy of new rounds of funding to cover the gap between current operational costs and future customer acquisition.
My first failure paved the path for future success
When we closed down, I felt like a failure. I pulled myself out of depression by focusing on the lessons learned; performing a full post-mortem on the business.
Trust me, the failures taught me much more than my successes. Don’t view failure as a fatal destination. View failure as the tuition paid for life experience.
'View failure as the tuition paid for life experience.'Click To Tweet
Experience will beat the snot out of a “piece of paper” any day of the week. Keep trekking, focusing on one goal at a time based on your priorities. You’ll find success is a matter of perspiration, guided by inspiration.
You’re only dead if you stop moving. You can do this. You’re going to fail and it’s going to hurt. But, if you keep trying (even if it’s trying something totally different), you’re virtually guaranteed long-term success.
This article has been edited.
M. Rafiq business development consultant and founder of financentric. His work has been featured in The Huffington Post, Tweak Your Biz, Growmap, and Evancarmichael.com. His real-world experiences allow his articles to speak to readers on a personal level. Connect with @tahir_raf on Twitter.