2 Years In Business: 9 Major Lessons Learned Building and Running a Start-Up
In early 2017, I wrote a Medium post when we were in the infancy stages of our business titled, Launching a Business: 1 Idea, 8 Months, 8 Major Lessons Learned.
It’s been almost 2 years since we launched our hockey base layer company, Oneiric, and as such, I thought it was time for a sequel to my original post. It’s been a pretty crazy journey, and although I’m unoriginal and have to resort to a platitude, there is no better way to frame it other than saying it’s been one hell of a roller coaster ride; filled with ups and downs, twists and turns, some screaming and some throwing up (just kidding…sort of..😕). Fluctuating emotions happen on the daily and it’s important that we keep them in check and work hard on managing disappointments. Some lessons are similar from last year, but more evolved and they’ve been adapted to our learnings from this year. After serious introspecting, here are the top lessons learned since the official launch of our company:
Hire People Who Are Experts in Areas you Aren’t
I put this one first because it’s honestly been one ofthe most integral pieces that has impacted our business. I come from a sales and digital marketing background and my co-founder, Kayla comes from a design background. There are a lot of knowledge gaps; supply chain and operations, product, manufacturing, finance, human resources, etc. etc. In my last post, I mentioned that one of the most important and humbling experiences being an entrepreneur is discovering what you don’t know, and where some of your skills may lack, and finding the help you need to close those gaps. We participated in several accelerators with incredible mentors and acquired all the skills and knowledge we possibly could that applied to our business, but there were still so many unknowns and time was getting increasingly limited as Kayla and I tried to cover those areas. Last May I received a recommendation from a mentor to reach out to an individual that’s been in our industry for over 30 years. I sent her an email, met up a few times in person, and then formulated a work contract. We now work in conjunction with one another; that is, she has been our strategic business coach for almost a year now, and she’s an invaluable resource to our business — her strengths lie in our weaknesses. She came from a corporate environment and is learning from us, but more importantly, we’re learning so much from her — incredible insights that add so much value to Oneiric. In the same vein, we’ve brought on other contract workers with years of experience in their position that we know nothing about. It’s so crucial to seek out individuals that you can have a pedagogical relationship with — one that fosters collaborative efforts from both parties. As a start-up with limited time to train and manage, of course its ideal to focus on hiring people that can teach us in areas that we struggle with. Not to say I’m against hiring junior people — as they definitely have their place, but for us we need to focus on acquiring human capital that will significantly add value to us at this stage of our business.
Let me start by saying that I am the most impatient person — not quite Gordon Ramsay impatient, but I’m pretty insufferable in my own capacity. Ask the people who know me the most — I desperately need to work on my patience. Which is why I find it so hilarious, and paradoxical, that I am about to share this lesson. Building a brand takes time..a long time and a lot of money. Like a lot of people out there, I want success to be instantaneous — instant gratification is my jam. The well-known reality is that it just doesn’t work like that. There are some days where I’ll be grinding away on a strategic plan for the next 5 years and feel no sense of gratification — it doesn’t feel like I’m moving our business forward, but it’s one of the most important activities we could be doing. What I’ve found though, is that the work that doesn’t provide instant gratification is the most important work we should be focusing on. One of my favourite books, The 5 Second Rule by Mel Robbins, delivered a very compelling and memorable message that I found exceptionally applicable to my life and business is: “you can accomplish anything as long as you let go of your timelines.” I sometimes set unrealistic goals and timelines. Who am I kidding..I always set unrealistic goals and timelines and then get disappointed and discouraged when things don’t go my way (they never do). This inevitably turns me into a grumpy, impatient little troll. I’m just kidding, but it is seriously important to take things in stride; rather than focusing on how your goals are manifesting on a day-by-day basis, take a step back and look at your goals and the progress you’ve made on a macro level. Writing down our major accomplishments helps motivate me to get back on track and a great reminder that important milestones take time and concentrated efforts. It’s so crucial for business owners to be patient — delayed gratification is a great marker of success.
Run a Customer-Centric Business
There are hundreds of books out there that tell you customers are the lifeline of your business, the customers always right etc. I’m sure you’ve heard this recycled business ethos numerous times, but there is definitely validity in it — if you don’t focus on building relationships with customers and actively listening to their feedback, you are going into business blind. One of the smartest things we did when developing our products was showing them to potential customers, getting their kids to try them out, surveying and really listening to the feedback being given. It’s so easy to share your idea and concept with family and friends who always say “that’s a great idea — you don’t need to change a thing!” They’re encouraging and nice, but they’re liars, haha. I literally paid my friend in the currency of an iPod Nano to create our first prototype in our living room made out of fabric bought from a textile store on Queen Street in Toronto and padding out of a life jacket. From there, it took 80 revisions and over 100 prototypes tested by real potential customers to get the product right and ready to commercialize. After we released our v1, we listened to the customers again and made even more changes for our v2 model. The lean methodology, MVP, whatever you want to call it — is getting feedback on an idea from real potential customers as early on as you possibly can, which is probably the most important business activity you should be doing. Those people who we’ve built relationships over the years were also the first to buy our products and tell their friends. Even though we’ve grown significantly since then and have thousands of customers, I still focus on building relationships and actively listening to feedback from our customers. Good or bad. I’ve recently had an experience ordering a custom birthday cake and the owner was rude, made it clear that she was making a huge exception by hitting my 5-day deadline and honestly, it made me feel shitty. I reluctantly gave her my business because I was desperate, but it left a bad taste in my mouth (literally the cake tasted dry and terrible) and I won’t be returning or recommending her business. Communicating with customers is actually my favorite part of running Oneiric and it shows. My correspondence is genuine and we have so many customers that are now strong advocates of our business.
I Am Not My Business: Separate Your Identity From Your Startup
I wrote about this lesson in my previous post, but I think it’s so important that it’s worth mentioning again. This is a really hard one to do for most startup founders. They feel a great need to tie their identity to the business (I’m also guilty of this), but it’s important to really take a step back and realize that you are not your business. They are two different entities. It’s easy to tie yourself to the business when things are going well, but what happens when things aren’t going so well (which is definitely going to happen). This is just like any relationship — you have your life together but you also have your separate lives — you are each your own person. However, when the relationship between you and the business you’ve fostered becomes so intricately intertwined that you can’t even distinguish between the two, then it becomes problematic. My number one value is embracing challenges. I look at problems as opportunities to better myself. Try to read/listen to a book a week. Put my family as number one. Run everyday to give myself breathing space where I can spend time reflecting on difficult issues and relieve stress. By developing myself it makes it less scary if Oneiric fails because although I feel a great tie to it, I know that my company and I are not one in the same and I can move on without it.
Managing Adversity and Disappointments
There’s a lot of bad things that happen on the regular..daily actually. Towards the end of last year, shit hit the fan and I became really miserable, unmotivated, negative and was seriously questioning whether I wanted to continue running Oneiric. We ran into some really big disappointments including a falling out with a long time partner, a new supplier who was able to hit our margin targets dropped out last minute, we hit some big issues with retail, and there was literally one month where we had close to $0 in the bank. I’d say I’m a pretty positive person and can usually handle stress well, but not this time. The overwhelming pressure and series of disappointments lead me to a panic attack (which I’ve never had before) and a mental breakdown followed by pneumonia. I needed to move away from negative habits that were not helping me manage stress — drinking too much, continuously putting off difficult decisions (which would then build up and come after me ten-fold), being negative and complaining about my issues to my family, friends, and my co-founder. After our rough Q4, I vouched that in 2018 I would focus more on my mental health and doing things I love to do. Getting back into writing, running, spending more time with my family and good friends, and playing hockey! There’s this weird thing in the startup world where only successful founders share stories of failure. A lot of founders I know pretend like everything is going well all the time which is complete and utter bullshit. By being vulnerable and opening up to my founder friends, they started opening up to me and although our issues varied, there were a lot of fundamental issues that were the same. It was so reassuring knowing that we weren’t in it alone and there are other people who are going through similar struggles that can relate and help share their advice. Talking to founder friends is an incredible tactic to help manage stress levels.
Do What You Need to Do to Survive
I came up with the idea for the business in my last year at Laurier when I was doing my BBA in 2011. After graduation, I had thousands of student loans to pay off and wanted to move immediately from my hometown Waterloo, Ontario to Toronto. As most know, Toronto is definitely a city that is far from cheap. Jumping into building the business full-time wasn’t feasible for me so I worked full-time for 5 years while building Oneiric on the side. I finally left my full-time job at a digital marketing agency in September 2016 when I felt that I was missing out on big opportunities because I was constrained to full-time hours. Deciding to leave my job was extremely stressful, but they were kind enough to give me a freelance contract for a few months after I left while I also built my portfolio of freelance clients to bring in sustainable income while working on Oneiric. A lot of my co-founder friends work part-time either serving/bartending or freelancing in an area they’re skilled at while building out their business. It’s not very glamorous, but essential in the first few years to take as little as possible from the business — taking salary eats up cash super quick so being able to cover living expenses through other means and re-investing that money I would have taken from Oneiric into activities that build the business is important. 2 years in and I’m still freelancing in digital — not only does it bring in income, but I can continue building my skills and bring in applicable learnings to Oneiric’s digital efforts.
Be In It For The Right Reasons
There are thousands of start-ups that launch globally each day. Some are in it to make a quick buck. This lesson goes hand in hand with “be patient” as starting a business needs to be for the right reason and takes time. Overnight success is a myth — it’s taken 5 years to get our product right and ready for commercialization and we’re still nowhere near where we want to be. The amount of time it takes from ideation to commercialization definitely varies. If we were in it to make a ton of money right away, we would have quit a long time ago. For us, it’s about building an incredible product that meets a need and improves the player’s experience in Canada’s favourite game — a sport we’re very passionate about. Getting emails from our customers about how much they or their kids love the product makes it gratifying. We keep a folder of emails and sometimes print them out to put on our desk to remind ourselves why we’re in this business. It keeps us motivated and excited on what we’re building even on the hardest days.
Focus on Cash Flow
Every start-up needs to pay attention to cash flow. This isn’t anything new. In a retail centric business where payment terms aren’t great (actually terrible) and seasonality is very prevalent, looking at the cash in the bank and planning upcoming expenditures is a necessity. Our biggest issue in a product business that manufactures overseas is supply chain. We need to place inventory orders in December to get product in time for the following season and have to front a huge chunk of cash for the deposit. Forecasting (a.k.a somewhat educated guessing) is even more challenging given those POs from retailers rarely trickles in for the following year in December. Our direct sales season is August — December which is nearly impossible to predict. To prevent running out of cash we need to purchase inventory and plan our accounts receivable 6 months out — by having a living cash flow document we’re able to update any anticipated expenditures and make sure we’re not overspending on inventory, marketing or salary and leave room for unexpected expenses. In the same vein, we work on a very lean model where my co-founder and I are the only full-time staff in Oneiric. We have 5 part-time/contract workers and can shift their monthly hours at our discretion based on cash flow. This allows us to be more agile and adaptive to unexpected operating expenses that arise.
Test Multiple Traction Channels
We’re a startup and literally have no money for marketing. So what do you do when you have no money? We’re forced to get creative. Every week I force myself to brainstorm 10 marketing ideas — 75% of those ideas are terrible, but if only 1 of those ideas drive significant traffic to our site then that means sales! We’ve tested ads on several platforms (Twitter, Instagram, Facebook, AdWords, etc.) and find that our best performing platforms are Instagram and Facebook. Content marketing and email works really well for us also. There’s been a million other channels and tactics we’ve tested over the past couple of years and now that we have enough data, we’re able to really fine tune our marketing efforts and invest in the channels that work.
Starting a business is hard and there have been so many valuable lessons I’ve learned along the way so far. Every stage a business progresses through presents new challenges, and as such, new lessons materialize alongside each struggle. It’s important to keep this in mind, especially when going through a spurt of despondency; tackling a challenge gives you the opportunity to grow in some capacity, so embrace these learning experiences, because we certainly have. Our second year in business was a perfect blend of ups and downs; incredible opportunities, fabulous consumer interactions and severe disappointment, but in retrospect, these feelings synthesized in a way that was incredible. We’ve grown and we’re ready to tackle the upcoming year — knowing it will be our biggest yet :)
*edited by Alex Rudow.