Why my first business failed. A lesson in what not to do.

My first start-up business failed miserably.

It was 2007 and I was excited and full of enthusiasm. My new business was going to be awesome and it would change the world. It would create passive income and I’d be able to retire at 30.

At least that’s what I thought.

Txtme logo

The business was called ‘txtme’ and it was a text messaging solution for the real estate industry. The concept was simple: home buyers could send a text message from outside a property and get property details back via text (like number of bedrooms, open home times etc).

Here’s what I did wrong (in no particular order)

  • I paid an obscene amount for a domain name ($3500!! domain names are important but not that important).
  • I locked myself away for the first month designing a logo and business cards (what a waste of time).
  • I thought I needed to create some software from scratch, when in fact there were other solutions already available to me.
  • It took me over 6 months to test the idea with a potential customer, something I could have done in the first week.
  • By the time I talked to any potential customers I’d already invested way too much time and I was over-committed.
  • I kept trying (way longer than I should have) because I thought starting a business was meant to be tough (it is, but I now realise when something is tough vs when something just doesn’t work).

But I wouldn’t change a thing.

The mistakes above are now etched into my brain and I couldn’t have absorbed them from a text book.

What lessons have you learnt in your start-up business?

Share Button
Social tagging: >

6 Responses to Why my first business failed. A lesson in what not to do.

  1. Alistair says:

    Hi Dan, really good post, the point you make about taking 6 months to test the idea with a real customer is so important. There’s a massive lesson in forgetting about what you, your mother, your neighbour thinks about your idea and getting your product/service in front of potential customers who could pay you, and then testing their response. Thanks for sharing.

  2. Joelene says:

    Hi Dan
    Great post. For some reason, while ony own journey, it makes me feel better to hear about other peoples muck ups – takes some of the pressure off- fear of failure can be crippling to motivation!
    If you did it all again, how would you test your market/ customers? Would you go out and talk to strangers or would you do it using a website? It’s pretty easy for people to say “yeah that’s a good idea, I’d buy it” buy when it actually comes to opening their wallets to pay for it, may be a different story!
    What ya reckon?
    Very likeable btw!

    • Likeable Dan says:

      Hi Joelene,

      Thanks for your comment – yes that fear of failure can be a killer for sure!

      In this instance my solution was for the real estate industry so if I did it again I would talk to as many real estate agents I could. I’d start with any that I had a relationship (if they tell you it’s bad then you know it’s a terrible!), then I’d move on to other agents I didn’t know. My approach when testing (regardless of the industry or solution) would be ‘I’m looking for your feedback’ rather than ‘would you buy this?’.

      In terms of using a website, I wouldn’t be inclined to do that in the early stages (unless it’s purely a web business). A website can be a reasonable investment of time/money and the tricky thing is that you’ll probably scrap, re-position or change your offering once you’ve received feedback anyway.

      Do give me a bell Joelene if you’d like to chat more about your plans – I’m always keen to talk about new businesses!

      Cheers, Dan

  3. Quentin says:

    I read a HBE article a couple of months back which talked about failure as an important part of business and businesses learning process.

    One of the key take always I got from the article was “fail fast”. That is by failing you can move on to the next thing. If you keep trying to “make it work” you waste resources and miss greater opportunities.

    • Likeable Dan says:

      Hi Quentin,

      I couldn’t agree more.

      A fast fail would have been a much better. I was stuck trying to ‘flog a dead horse’ and I just didn’t have the perspective to realise it at the time.

      Thanks for your input!

Leave a Reply