The Best Way To Start A Business.....Failure - My 7 Best Failures
I truly believe the best way to start a business is to first fail. Why would I say this? Because when you fail you learn ten times more than when you succeed. Success breed confidence (which is good) but can lead to complacency if it is left unchecked. Failure breeds contemplation, review, brainstorming and character traits like perseverance. You need to fail every now and then to continually improve.
Below is a list of my 7 best (or worst, depending on how you look at them) failures that I have experienced since starting Profitworks and what I have learned from each.
1. My First Customer = Failure
What Happened
My very first customer was a complete failure. I agreed to work with him and provide a service to bring him new customers. After working with him for 6 months I was able to obtain him one meeting with a prospect and 0 customers. That is right the big goose egg.
Why It Was Good
From this experience I learned I need to be selective on what customers I choose to work with. Some products or services just can't be sold in certain markets because there is not enough interest. There needs to be clear overwhelming value that the product or service delivers that the prospect understands and wants. That was not the case with this customers product. The market did not value the service my first customer was trying to sell or at least understand the value. There were too many other lower cost, higher value options that the market could purchase instead of my customers offering. In addition, this experience was great as it made me conduct some sales skills research, review and work to improve my closing rate when I meet with prospects on behalf of my clients, and study up on common sales mistakes. It also helped me refine my own processes for dealing with my customers and made my interactions with my second customer much more efficient, professional and successful.
2. My First Online Product = Failure
What Happened
On October 28th 2010 I launched my first online product. It was Profitworks' Easy To Use Accounting Software. It retailed for $29.99. I was pretty impressed as I was able to create the online store by my self because at the time I had very little programming knowledge, really actually none at that point. As I got web page visits to my product page one week went by, two weeks went by, one month went by two months went by and I still had not sold a single copy. By April 29th 2011 I realized I was not going to be able to make money with the product or at least not in its current form I had sold a large grand total of ......$0.00.
Why It Was Good
From this project I learned a lot about websites work and how to conduct search engine optimization. This knowledge has proved to be invaluable for improving my website, working with clients to improve their website, and discussing search engine optimization with my clients. From this knowledge base I am now starting to perform SEO services for some of my clients. I have learned when you have a failure often you will learn things that can be applied to totally different projects as this example illustrates.
From this experience I also learned that for people to spend money they need to trust who they are buying from and the product needs to provide immense value to them and that they can clearly see the value. This is the only way to generate significant sales. I still have a long way to go in mastering selling products on line but from this experience I learned some valuable lessons.
3. My Second Direct Mailer = Failure
What Happened
The second direct mailer Profitworks ever did was an absolute failure. At that time I was the only employee of Profitworks, I was fully accountable for the results as I have no one else to blame. The direct mailer went to 2,250 business, resulting in zero contacts and zero sales. That is right not a single business out of the 2,250 business that it was sent to contacted my client about their offer.
Why It Was Good
From that experience I learned a lot about direct mail, mainly that for a direct mail to be successful it needs to include an enticing offer that a high portion of direct mail list values. If only 1% of your list value what you are offering you have wasted 99% of your direct mail campaign. This is simple stuff but I find that is is easy for me to think people will be interested in the offer, when what I need to do is take a hard look at the proposed offer from the view point of the prospect. Since that experience I have been able to produce multiple direct mailer campaigns with return on investments of over 100%. To read more details on the specifics of what I learned and how I changed things to get better results read my blog post "Learn How To Do Direct Mail That Works"
4. My First Mass Email For My Customer Gold Roast = Failure
What Happened
On January 25th 2011 I sent my first mass email for my customer Gold Roast. From that email I only received one open for a whopping open rate of 2.9%. This is terrible given the industry standard for open rates.
Why It Was Good
I learned a lot about email marketing. After sending this note I quickly learned you can't just send out an email and expect to have people read it. There has to be a lot of thought put into it. Everything from why a person would want to open the email, what the subject line is, what to put in the from line, what to put as the from email, what day to send the email, what time to send the email, what to put in the email and how to structure the content within the email. I quickly learned that by modifying each of these components they can have a dramatic impact on open rates. In order to generate good open rates I needed to develop an email marketing guideline to follow to maximize my results.
5. My First Networking Event = Failure
What Happened
At my first networking event I think I got maybe the contact information of about 5 people and none of them turned into customers. I did not even get to meet with any of them after the networking event. Basically the benefit I got from spending an hour of my time at the event....zero. Another great failure to chalk up on my list.
Why It Was Good
As discussed earlier in this article when something fails or does not work it causes you to contemplate, review, brainstorming and improve. I took time to research how to be effective at networking and also watched human interactions to see how I can could improve the first impression I make on people. To read what I learned check out my blog post "How To Make A Great First Impression With Potential Clients" I learned that talking to only 5 people at a networking event was not enough to make a networking even worth while (unless of course you get lucky). I needed to improve my networking skills so I worked at them and my results improved dramatically.
6. My First Marketing & Sales Employee = Failure
What Happened
One a cold winters day in January I got a phone call from an excited college student. She wanted to work for my company. At this point I had not hired a single employee. I became very excited that someone was so excited to work for my company. I was going to have her work with me to generate new customers for my clients. Well the arrangement did not go as well as planned and after a short stint the employee no longer wanted to work for me. This was a direct result of my poor management and communication.
Why It Was Good
I learned just how powerful it can be to have someone work for you. By having someone work for you, you can multiply the amount of work you can accomplish in a day. I also learned I needed to work on my management and communication skills so that when the next employee came along I would make working with me much better and create an environment where people enjoy their work. I learned that it was important to communicate to employees how their tasks fit into the great scheme of things and why it is important. I learned that setting goals and having employees make commitments will improve their productivity. I learned that letting employees know what you are working on helps them build trust, rapport and understanding, which increase productivity. There are so many things I learned that there are too many to list.
7. My First Google Adwords Campaign = Failure
What Happened
I conducted my first google adwords campaign on the behalf of one of my customers. From this campaign I blew through their entire budget in about 2 weeks and generated 0 sales and zero customers from the campaign.
Why It Was Good
After learning more about google adwords and looking into what happened I learned a very important thing about google adwords.....negative keywords. What I learned from analyzing this campaign was that I was paying for a bunch of clicks from searches like "hotmail login" and "facebook login". These search terms were completely irrelevant to the product I was trying to promote. I learned that irrelevant broad matches like this can occur but that they can be prevent by watching what search terms you are getting clicks for and proactively setting up negative keywords. I continue to learn and improve my google adwords skills and am at a point now where the campaigns I manage actually create customers and sales.
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My name is Chris R. Keller. I work at Profitworks Small Business Services helping various B2B small businesses in Waterloo and Kitchener Ontario generate new customers. Feel free to connect with me on Google+. If you are just interested in getting new customers for your B2B small businesses enter your email in the box provided below and click the "Send Me Free Updates" button.
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