You don’t learn until you launch

I was two weeks away from giving up on entrepreneurship for good. I flicked through the limited job opportunities in my area and considered moving my family back to the city.

I’d thought of myself as an entrepreneur for the last 14 years. I’d ridden the rollercoaster of business ownership for the last seven. ‘What the fuck was the point?’, I thought to myself.

My first business idea

I got my first taste of entrepreneurship 14 years ago.

It was the year 2000 and I was a long haired 20 year old, struggling through university. I was also bored out of my brain and needed to choose an elective to make up for the courses I had failed. I stumbled across a brand new subject called ‘Entrepreneurship’.

I dreamed of launching and running my own successful startup, so this course grabbed my attention.

The goal of the course was to come up with a business idea and plan how to make it happen. I was doing a business degree, so I figured it made sense to choose at least one course that taught me about starting and running a business.

In 2000, it was Dogpile and Hotbot that I used to search the web. But there wasn’t much there. All of the good stuff was in the library.

I was majoring in Human Resources and in the library one day, I stumbled across a publication called the Ultimate HR Manual. I hid it so no one else could find it. It couldn’t leave the building — it was too powerful.

The manual held all of the secrets for managing human resources. It outlined exactly how to hire and fire, how to recruit amazing talent, how to manage change, how to build a team and how to train. It was the holy grail of HR.

I needed a business idea and after I discovered the HR manual, it dawned on me.

“What if I put the HR manual… online! I could create a site where business owners could access all of the forms and processes required for best practice HR including position descriptions, employee surveys, HR Audits and training programs. That would be cool! Wouldn’t it?”

My first business idea was born.

I spent 6 months planning out the idea, working out exactly what topics to include, how to deliver the documents, how to charge and even how to employ writers.

This was my million dollar idea. HR managers were already paying thousands of dollars for HR staff, so I figured they would certainly pay a few hundred dollars for every document they could ever need. As far as my research revealed, nothing like this existed.

I was proud of my plan — it was very organized, meticulous and thorough. I nervously submitted it with hopes of earning a great mark.

I waited… and waited for my results. Finally, the day came. I opened the assignment and saw an A — BOOM!

There was one problem.

I didn’t launch the business.

Sure, I had created a beautiful business plan after spending countless hours in the library deep diving into painstaking research.

But launching a business wasn’t in the marking criteria.

Looking back, the timing was perfect. I had this idea just after the first dot com crash and services like this became mainstream a few years later. HR documents and policies were easy to share and buy online. In hindsight — I’m sure it had the potential to be a seven or eight figure business.

I will never know for sure.

I learned a very valuable lesson from my failure to launch.

You can never predict what happens after you start a business. Long term plans and detailed documents are pointless. Most businesses go on to do something very different to what they set out to do. Today, this is called a pivot.

The lesson is “You don’t learn until you launch”.

My first business

The reason I use the term ‘startup’ is because I think the term ‘business’ is very misunderstood.

A startup needs to be high growth and is usually in a big market with big potential. A startup needs to have the potential of becoming a ‘real business’, not just a job for its founder.

I’ve found that the term ‘business’ often means working for yourself.

Skip forward to 2006 — I had just earned a promotion at my cushy corporate role, I was 26 and I was finally ready to start a business. I told everyone that I would be a millionaire before I was 30.

I had another idea. I would start a business building websites for people. The fact that I didn’t know how to build a website and had no IT qualifications didn’t bother me.

Instead, I threw myself in the deep end. I learned rapidly from reading books and by doing the work. My new clients would ask me questions like:

‘Can you build a website using ASP?’

I would say yes, then frantically search Google for ASP to find out what it was and get to work.

Everything looked great early on. I landed a project in my first week and earned $40,000 in my first year. Sure, it wasn’t exactly $1,000,000 — but I was happy to have even lasted a whole year!

In year two, I generated around $80,000 in revenue and in Year 3 I had eclipsed the hallowed six figure mark.

Before I knew it, I had an office, local employees, a server, a phone system, hundreds of clients and an influx of new leads.

I had built a real business. I was on the path to becoming a millionaire. Or so I thought.

However I had one major problem.

The business was not profitable. It wasn’t profitable in year one, year seven or anywhere in between.

I didn’t become a millionaire before 30. I went backwards as all of my friends went forward. I was 30, living week to week, renting and earning a lower wage than anyone I knew.

It got worse before it got better.

I realized that bringing in more revenue wouldn’t solve my profitability problem. My business was not growing. I tried everything and I mean everything to make it work.

No matter what I did, I couldn’t move the needle.

I’d have big successes like winning a $20,000 project, then a big failure like writing off a $10,000 invoice or hiring the wrong person. It was never consistent.

I regularly worked at Christmas time to appease my worst clients.

I struggled with loneliness, a lack of motivation and confidence. I had put myself out there leaving my friends and co-workers. I knew people expected big things. I expected big things. But I never expected to fail.

I had plenty of positive signs where I’d think things were coming good, but then something would change and I’d be knocked back on my arse again. This happened all. the. time.

I lost faith in my own judgement. I committed to various courses of action thinking they would save my business, only to have each one fail.

After seven years in business I was turning over about $180,000 per year, but was still only making around $40,000 per year.

In the end, I accepted that it was a problem I couldn’t solve. I sold the business to try to build something new.

This time, I was going all in. I wanted to build something real. A startup that would succeed spectacularly. I wanted to stop scraping by and finally become a success.

Not only that, I wasn’t leaving any room for the alternative.

I had enough money from the sale to cover 12 months of expenses. If I couldn’t get traction by then, I would have to move cities and get a job. This was scary, but it didn’t seem like a real threat because I was confident that I could make it work.

My first startup

I knew what to do this time. I was going to create something big, something that could scale. I had four possible ideas I could run with.

  1. A pot plant stand that supported heavy pots — a friend had told me they couldn’t find one.
  2. A surfing app that allowed surfers to check into their local break — think Foursquare for surfers.
  3. An SEO app that enabled website owners to order SEO services for keywords.
  4. An analytics dashboard that simplified analytics from various places.

I worked on all of these ideas and then decided to choose one to focus on.

I had no idea about product design or manufacturing, so the pot plant stand was out. I couldn’t foresee making any money from the surfing app, so that was out too. I started building the SEO app and Google introduced new rules that punished that style of link building. Strike 3.

The analytics dashboard was the remaining idea, so I ran with it.

I named it Web Control Room and later renamed it to Informly, to make it sound more like a startup.

Some things were the same. Throughout the 12 months most of the time I felt things were going well. I had good traction on my website, a lot of free signups, regular press coverage and I achieved a lot. I had a great team, I put together a solid application that was unique, useful and solved a big problem according to what people said.

After 11 months and trying everything, I was earning just $476 in recurring monthly revenue and spending $2,000+ a month. I had burned through all of the money I made on the first business and was two weeks away from completely running out.

I started looking at jobs and wondering how we’d go about moving back to the closest city where the jobs were.

I’d failed again.

This time it was looking like there was no coming back.

My 7 day success

I had two weeks left, so I had one last crack.

This would be my last startup attempt.

I learned a lot from my first and second business, so I wanted to try to apply this to my new idea. This time, I didn’t have seven years or 11 months. At the end of the week, I needed traction on the idea or I would have to shut everything down and start job hunting.

I was running mainly on adrenaline. I ignored a lot of the activities I would typically spend time on when planning a business.

I was focusing only on things that led me to paying customers.

I forgot about:

  • Sexy ideas. I wanted to solve a problem, sell a service and fast.
  • My failure. I had failed a lot in 14 years, but I didn’t have time to worry about my shortcomings.
  • Permission. I used to ask for people’s opinions on my ideas, but not this time.
  • Assumptions. There was no time to plan for events based on assumptions.
  • The small stuff. I didn’t have months to agonize over a logo, business name or design — I chose the idea, invented a name and put the site up in one day.
  • Pricing strategy. I set a price and would let my customers tell me whether it was worth it.
  • The perfect payment gateway. Informly’s payment gateway took 6 months to set up — this time, I used a PayPal button which I set up in 30 minutes.

On Saturday, I decided to launch WP Live Ninja (now WP Curve). My WordPress support service offered unlimited small WordPress jobs, 24 / 7 for $69 per month.

By Saturday afternoon the domain was registered, on Tuesday the site was live and by Wednesday I sent out an email launching the service. I landed my first paying customer that day.

In the first week, I signed up 10 customers. This resulted in $476 of recurring monthly revenue, which was the exact amount I’d worked up to during the previous 12 months with Informly.

This may not sound like much, but my excitement was through the roof! I knew this was the one. People were voting with their wallets. WordPress issues are an annoying problem that people are prepared to pay for. It was a monthly recurring service in a big market that I knew could scale into something significant.

Within 23 days I was covering costs and within a month my San Francisco based co-founder Alex had joined me. The thoughts of moving to get a job were a distant memory.

Each month we grew by around 15%. People started proactively spreading the word. After 10 months we had signed up 230 customers and were making over $15,000 monthly recurring revenue (MRR).

After 10 months WP Curve had more customers than my original agency, more annual revenue, more staff and a stronger team, lower costs, a simpler business model, happier customers and three times more profit.

Most importantly, it was a real business. A high growth startup, in a big market with a lot of potential.

After 14 years, I’d finally realized my dream of being an entrepreneur running a high growth startup.

It only took seven days.

This is a chapter from my free book, The 7 Day Startup.



Lessons learned the hard way — submissions tweet @michaelsacca

Get the Medium app

A button that says 'Download on the App Store', and if clicked it will lead you to the iOS App store
A button that says 'Get it on, Google Play', and if clicked it will lead you to the Google Play store
Dan Norris

Entrepreneur, author & international speaker. Co-founder @blackhopsbeer author of #7daystartup & 3 other best sellers.