Creating your own unicorn without being stabbed by its horn
When you work for a startup, especially in a place like Estonia, you get this feeling you must do something similar, or you’ll lose the chance of a lifetime. Every day you read stories of a new startup getting funds from angel investors or foreign companies willing to invest into new products/services. However, you rarely hear or read any stories about all the failed companies and people who had to give up their dreams and go back to a regular lifestyle (i.e. working for someone else).
The latter one is my case.
Almost 8 years ago I decided to launch two projects in Spain (while also trying to keep a regular daily job): running an administration + accounting software distribution company (with friends and family: www.safinge.es) and (drum roll) opening a gay online book shop with my family (more specifically, with my dad— hint: it doesn’t exist anymore).
I know, none of these companies qualify as an official startup, much less a unicorn, but the feeling of having your own business is quite similar (minus the saving the world motto that most startups have).
For the administration/accounting software, the product was already created and I joined the team as an investor for the distribution part. As for the online bookshop, it wasn’t that common to buy books online back then (except fora few big companies like Amazon and Barnes&Noble, among a few others), but the options were still a bit limited for certain market segments (i.e. the LGBT or queer segment).
The thing is, when you start your own business (using your savings + your family ones as well) everybody encourages you on a daily basis to work hard and to keep on going no matter what. You work like a maniac, barely sleep or eat, and you’re fully convinced you’ll make it at some point.
The whole process of setting up the new business took less than 3 months (the administration/accounting software was already created, so it was basically establishing some legal aspects + improving the webpage, finding new distributors and re-sellers, adapting the product to new requirements, etc…).
As for the online gay bookshop, I started a blog a few years before, and then launched the website selling books from Taschen and other distributors. Back then, these companies used to have very crappy websites, so only re-sellers and distributors could actually purchase books from them by the lot. Seemed like a fair deal, and an unexploited market niche.
At this point I fell into the usual behavior most newbies have when creating their own business: You’re aware of everybody’s mistakes, you read all the business and startup magazines available, pile them up, read them again, make summaries, check balances, talk to other companies like yours, attend all startup events nearby, save as much money as possible, attend business fairs, networking, SEO Google training, etc… the list goes on and on, but the feeling of being busy and having your own business beats any depression. I must admit it, I rarely felt depressed back then.
Unfortunately, bills started piling up and slowly but surely you start realizing something ain’t right. It’s like forgetting about the bread toaster: you toast bread, it smells great at the beginning, you only focus your senses on the bread and forget about the toaster, and it slowly burns and fills the whole house with smoke. After a while it all gets nasty and you lose your appetite.
- By 2008 the financial crash started hitting all markets, but the overall feeling of ‘it will all be over soon’ was in the air.
- By 2009–2010 the crash was imminent and the EU zone started to lose its beauty.
- Regarding administration software, most companies drastically reduced their budget (especially administration costs) which affected software companies since very few companies were investing money updating their systems.
- As for book sales, most book providers started improving their websites and selling books directly to all customers (individual and business).
After 1 year and a half of having these 2 companies, I decided to close the online book shop since sales were plummeting and the crash was imminent. As for the software business, we finally got a few deals for doing audits to administration departments instead of selling software. However, it proved to be a more prominent market niche with a steady income (by networking and building relationships).
To make a long and painful story short, here’s what I learnt:
- Be open to change and commit to it with facts: The company you create might end up becoming something different depending on internal , but also, external factors. Check the facts, build a network, and see where you can make a dent and grow.
- Sometimes, trusting your instincts isn’t the way to go: Sometimes your gut feeling won’t be accurate and you might end up wasting money on things that won’t help you that much (in my case, spending a lot of money on Google AdWords and online marketing, instead of networking and focusing on different business areas with other companies).
- Working with family and close friends is tough as hell: Telling your parents, sister or close friends what to do isn’t a simple task no matter how well you get along. Working with friends ain’t easy either. Finding a good work partner is essential. Some people can build a family business, some people cannot. No rule applies here, it’s learning by doing.
- Have a Plan A, B, C .. all the way to Z and start again: being focused is extremely helpful, but it’s also good to analyze different options and facts. Ask for advice, ask people to review your ideas and to give you honest and direct feedback, find mentors, etc…. don’t do the homework alone (and not just with your family and close friends). Leave your comfort zone.
- Ask your customers and be ready to adapt: ask your customers what they expect and where they’re focusing their interests at the moment. For us it was shifting from software to audits, since the market was (and still is) over saturated and companies are more willing to pay for analysis rather than constantly updating their systems.
- Making changes in your life is tough, but necessary: in my personal case, failure seemed imminent at that time. Even today, 8 years later, I still ask myself if I could have done something different, and the answer is always yes. Learning from it has been tough as hell, but it’s also good to apply your knowledge into new things and you feel a thousand times more prepared for any new obstacle in life.
I still get surprised it isn’t easy to find people telling their stories about all the companies they’ve started and how it went. Admitting failure isn’t easy, and neither is analyzing your mistakes without getting depressed about it.
I’m still working for a startup and everyday I ask myself: what can I apply here that I didn’t do when I had my own company?. It actually motivates me and encourages me to do more things every day and to avoid being afraid of changes.