How much money have you lost?

[sonny_1080]

This is perhaps the biggest thing preventing me from wanting to go into business again. Like everybody else, I've failed over and over again. I struggle with seeing my failures as "the sweat of success" because, well, failing sucks.

I wanted a thread that discusses the amount of money people have lost because it's a topic that most seem to shy away from, yet it is probably the biggest deterrent to entrepreneurship.

My goal is to not only have a place where we can share experience, but also provide hope. Parallel with that hope, we can share what we learned from our money losses.

I'll go first:

Business #1: Started a garage cleaning business at 21 years old. Money invested: $0. Loaded up my truck with household cleaning supplies and knocked on doors to advertise my services. Landed 3 clients my first week. Net gain. Should've never stopped.

Business #2: Started a digital marketing business managing PPC ads at 28 years old. Money invested: under $1,000. Joined a networking group and landed several clients my first month. Net gain. Should've never stopped.

Business #3: Started an online review platform at 28 years old. Money invested: over $5,000 of my own money and borrowed another $10,000 from a relative. No clients landed in over 2 years. Net loss. Still paying off relative. Lessons learned:

1. Just because I value something and believe I should be paid for said value, doesn't mean the market agrees. In other words, get hard-proof (sales) before investing money and definitely before borrowing money.
2. I'm incredibly capable of disillusioning myself to believe my own nonsense. I should always have someone with more experience than myself, whom I trust, that I can run my ideas by.
3. Never start a business in a dying industry.

Again, I share this not to discourage anyone, but to bring the realities of entrepreneurship to our attention so that we can avoid these mistakes and recognize the magnitude of approaching business lackadaisically, which I have done in the past.

Someone once said, "I have more respect for those who mess up and have the courage to repair those mistakes; rather than those who never made the mistakes in the first place." -- Me. I said this.

 

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[MJ DeMarco]

Should've never stopped.

Should've never stopped.

Any reflections on these two statements? Perhaps this is more relevant, not about losing money at business that didn't work out.

 

[Maxkaz]

What strikes me in the stories like this is that with each step you got further and further away from the money. It seems to be a bias of some sort in entrepreneurs, that the farther you are from the money, the more businessy a thing you do.

Look here. Let us assume that we are talking about one single customer. That customer has a wallet and wants some stuff done, say, cleaning.

Cash flow goes like this
First business:
Customer -> Cleaner (you are here)

Second business:
Customer -> Cleaner -> Marketer (you are here)

Third business:
Customer -> Cleaner -> Marketer -> Review platform (you are here)

Science of ecology tells us that in every food chain 90% of all the energy gets lost on every step. A plant in every given moment contains 10% of all the energy it got from the sun. A herbivore gets 10% energy of all the plants it eats (1% of initial sun energy). A carnivore gets 10% energy from herbivores (0.1% of sun) etc, etc.

In terms of business if we have a cleaner who thrives on 10 customers, a marketer already need 10 cleaners to thrive, meaning that he/she has 100 cleaner customers in their network. A review platform needs 10 such marketers which collectively have already 1000 households in need of a cleaning service to be serviced. That distancing from the money and diminishing the impact on the person with money (remember, the guy wants clean floor, not 5* review on some platform he never heard of) eventually leads nowhere...

 

[Oso]

I'm more curious to hear about why you walked away from things that were working, and why you simply don't go back to what was working.

Cheers.

 

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[lifemaker]

What strikes me in the stories like this is that with each step you got further and further away from the money. It seems to be a bias of some sort in entrepreneurs, that the farther you are from the money, the more businessy a thing you do.

Look here. Let us assume that we are talking about one single customer. That customer has a wallet and wants some stuff done, say, cleaning.

Cash flow goes like this
First business:
Customer -> Cleaner (you are here)

Second business:
Customer -> Cleaner -> Marketer (you are here)

Third business:
Customer -> Cleaner -> Marketer -> Review platform (you are here)

Science of ecology tells us that in every food chain 90% of all the energy gets lost on every step. A plant in every given moment contains 10% of all the energy it got from the sun. A herbivore gets 10% energy of all the plants it eats (1% of initial sun energy). A carnivore gets 10% energy from herbivores (0.1% of sun) etc, etc.

In terms of business if we have a cleaner who thrives on 10 customers, a marketer already need 10 cleaners to thrive, meaning that he/she has 100 cleaner customers in their network. A review platform needs 10 such marketers which collectively have already 1000 households in need of a cleaning service to be serviced. That distancing from the money and diminishing the impact on the person with money (remember, the guy wants clean floor, not 5* review on some platform he never heard of) eventually leads nowhere...

this reeks with invaliable value.
thank you!

 

[heavy_industry]

Started a garage cleaning business at 21 years old.

Started an online review platform at 28 years old.

Are we complaining about a $15k loss here?

What about the decade that just went by? How much are your years worth? $1M / year?

GET THE F*ckING HELL UP AND FIGHT AGAIN.

 

[Stargazer]

Business #1: Started a garage cleaning business at 21 years old. Money invested: $0. Loaded up my truck with household cleaning supplies and knocked on doors to advertise my services. Landed 3 clients my first week.

If this is still a thing in America, why not go back to this and just crack on with it and see how far you can go? Presumably you are only 30ish now?

There's a well known saying in Yorkshire, England. 'Where there's muck, there's brass'

Muck being unpleasant tasks and brass being money.

Dan

 

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[amp0193]

As you have learned, you can only lose what money you invested into it in the beginning.


All of my businesses have been bootstrapped with no more than a few hundred bucks. All of them have made money, some not enough to justify continuing.

Doesn’t mean I haven’t made mistakes that cost me $5,000 to $1,000,000+ along the way. Those were failures and I learned from them.

Problems and failures are a part of the game, but the only way you get knocked out completely is by overleveraging yourself and operating on borrowed cash in the beginning and then you run out of runway (or you quit).

Start another business and pay your friend back what you owe them (plus interest).

 

[Kevin88660]

This is perhaps the biggest thing preventing me from wanting to go into business again. Like everybody else, I've failed over and over again. I struggle with seeing my failures as "the sweat of success" because, well, failing sucks.

I wanted a thread that discusses the amount of money people have lost because it's a topic that most seem to shy away from, yet it is probably the biggest deterrent to entrepreneurship.

My goal is to not only have a place where we can share experience, but also provide hope. Parallel with that hope, we can share what we learned from our money losses.

I'll go first:

Business #1: Started a garage cleaning business at 21 years old. Money invested: $0. Loaded up my truck with household cleaning supplies and knocked on doors to advertise my services. Landed 3 clients my first week. Net gain. Should've never stopped.

Business #2: Started a digital marketing business managing PPC ads at 28 years old. Money invested: under $1,000. Joined a networking group and landed several clients my first month. Net gain. Should've never stopped.

Business #3: Started an online review platform at 28 years old. Money invested: over $5,000 of my own money and borrowed another $10,000 from a relative. No clients landed in over 2 years. Net loss. Still paying off relative. Lessons learned:

1. Just because I value something and believe I should be paid for said value, doesn't mean the market agrees. In other words, get hard-proof (sales) before investing money and definitely before borrowing money.
2. I'm incredibly capable of disillusioning myself to believe my own nonsense. I should always have someone with more experience than myself, whom I trust, that I can run my ideas by.
3. Never start a business in a dying industry.

Again, I share this not to discourage anyone, but to bring the realities of entrepreneurship to our attention so that we can avoid these mistakes and recognize the magnitude of approaching business lackadaisically, which I have done in the past.

Someone once said, "I have more respect for those who mess up and have the courage to repair those mistakes; rather than those who never made the mistakes in the first place." -- Me. I said this.

I don’t see as reckless investment in the businesses. You kept the investment small.

You should also the talk about the domain knowledge gained.

Chess School

I freelanced as a Chess (an asian variant of the game) coach before under a chess school. I an quite familiar on the business fundamentals of a brick and mortar chess schools.

Margin is razor thin on multiple revenue streams.

The chess school bids for afternoon lessons in elementary and middle schools (public and private), and subcontracts to instructors like us, earning a spread.

Holiday classes in June and December and this is highly seasonal. Lessons can be conducted in offices or communities centers (stated owned estate offices) where you pay no rental but share 30 percent of revenue streams while the centers advertise for you.

Holding competition for kids, and getting sponsors. There are businessmen who like chess who is willing to sponsor the location and prize money. The revenue is the participation fees collected from the parents who pay for the kids to join.

The business is profitable for the owner but it is so much work for the hustle and the owner closed down after running it for 5-6 years. It is more like a social enterprise than a business and the business would not survive if he had to actually pay a real rental (the main office to conduct lessons is owned by his family so there is a no rental).

Before he closes the business down he was looking to pivot into teaching academic tuitions where the real money is. 70-80 percent of the kids in Singapore have some form of after school private classes to brush up their academics to keep them well armed in the rat race. This is where the parents are willing to spend 3-500 per month on a kid.

I will leave it to another day to write about my failed import business of souvenirs and failed scholar management system of crypto gaming (Axies Infinity)

Fundamentally chess is too small a market for real needs. Parents have bigger budget to pay improve grades and get their kids in a good school.

 

[Kung Fu Steve]

Like everybody else, I've failed over and over again. I struggle with seeing my failures as "the sweat of success" because, well, failing sucks.

You're delusional.

You didn't fail. You stopped.

Don't let your emotions cloud the truth.

Be careful not to get addicted to this feeling. The world of entrepreneurship is filled with self-loathing because we think we HAVE to be sad. It's a way to connect with others. You want connection, get a puppy.

Until then, stop stopping and you'll do just fine.

 

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[Antifragile]

the amount of money people have lost because

I think I lost $5 yesterday… does that count?
No wait, it was in the other pants, got it.

Jokes aside, I don’t see the point. If business doesn’t work, we pivot.

Evolution works by trial and error. When you were 6 months old and couldn’t walk yet, did your parents think about “what you’ve lost by not being able to walk” yet?

It’s pointless. Keep at it, until it works. Don’t hope that “someday it will work”, make it work.

 

[Andy Black]

stop stoppin

^^^ This.


And in case you're wondering why you stopped:

A business coach once told me: "F*ck why. It only holds you back."

Go back to 1) with your new skills gained with 2). Or go back to 2) and keep going.

 

[Andy Black]

What strikes me in the stories like this is that with each step you got further and further away from the money. It seems to be a bias of some sort in entrepreneurs, that the farther you are from the money, the more businessy a thing you do.

Look here. Let us assume that we are talking about one single customer. That customer has a wallet and wants some stuff done, say, cleaning.

Cash flow goes like this
First business:
Customer -> Cleaner (you are here)

Second business:
Customer -> Cleaner -> Marketer (you are here)

Third business:
Customer -> Cleaner -> Marketer -> Review platform (you are here)

Science of ecology tells us that in every food chain 90% of all the energy gets lost on every step. A plant in every given moment contains 10% of all the energy it got from the sun. A herbivore gets 10% energy of all the plants it eats (1% of initial sun energy). A carnivore gets 10% energy from herbivores (0.1% of sun) etc, etc.

In terms of business if we have a cleaner who thrives on 10 customers, a marketer already need 10 cleaners to thrive, meaning that he/she has 100 cleaner customers in their network. A review platform needs 10 such marketers which collectively have already 1000 households in need of a cleaning service to be serviced. That distancing from the money and diminishing the impact on the person with money (remember, the guy wants clean floor, not 5* review on some platform he never heard of) eventually leads nowhere...

Love this. Folks want to get further from the muck as our Yorkshire friend calls it, but all they do is exchange one muck for another.

 

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[NervesOfSteel]

You're delusional.

You didn't fail. You stopped.

Don't let your emotions cloud the truth.

Be careful not to get addicted to this feeling. The world of entrepreneurship is filled with self-loathing because we think we HAVE to be sad. It's a way to connect with others. You want connection, get a puppy.

Until then, stop stopping and you'll do just fine.

Stopping is also a failure.
Not being able to access, if its working or not, is also a failure.

He has lost most precious entity in this world - TIME ! Its a loss!

Only OP has the option and power to learn from his experience and use it to start building a bigger and better version of himself and his company!

And Pets are a nuisance! Waste of time and emotional baggage!

OP needs to understand that he cannot get back what he lost, but he can build something great, starting today!

What's gone is passive loss. What's actual loss is the time wasted in sulking and feeling depressed about it!

You have time. Energy. And now experience!

What are you gonna do now?

 

[Kung Fu Steve]

Stopping is also a failure.

No, it isn't.

Not being able to access, if its working or not, is also a failure.

That's a simple mistake.

Also, not FAILURE.

I know plenty of 10, 20, and 100-million-dollar companies that don't always know "if it's working" or not.

He has lost most precious entity in this world - TIME ! Its a loss!

He can F*ck it up for the next 30 years and STILL become a "success" (or what I assume you see as success)

Let's not project our limiting beliefs on him.

 

[Maxkaz]

Love this. Folks want to get further from the muck as our Yorkshire friend calls it, but all they do is exchange one muck for another.

It is not just about the muck imho. I believe that many wannabe businessmen are really afraid of primary customers. Those are people with different background, different standing in life. Take this cleaner case. What in the world is common between a person mopping the floor and a person, paying not to mop the floor?

So usually to get to your primary customer you need to get out from your normal social circle. That is scary. So what can one do? Try to sell to someone similar! “That guy wants to pay for mopped floors? I do not understand and afraid of him. Rich bastard, I hate him! But that other guy wants money, that I can relate to. So I will go to that guy, speak on his language and sell him my services. I am safe, I know the language, the drill and even his deep thoughts. And he is not above me! Even better, he mops floors and I am a respectable marketing guy working not with hands, but with Head”

 

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[amp0193]

And Pets are a nuisance! Waste of time and emotional baggage!

Sounds like there’s an emotional backstory here…

 

[NervesOfSteel]

No, it isn't.




That's a simple mistake.

Also, not FAILURE.

I know plenty of 10, 20, and 100-million-dollar companies that don't always know "if it's working" or not.




He can F*ck it up for the next 30 years and STILL become a "success" (or what I assume you see as success)

Let's not project our limiting beliefs on him.

* I said that OP has time to accomplish a lot, and my post was not entirely negative as you interpreted it.

* OP stopped and never tried to revive those businesses he stopped at. It's called Quitting. In my opinion, Quitting is also a failure.

*Yes, I agree the OP can f*ck up for another 30 yrs and still make it. In your opinion, he would have never failed for 30 years before making it big?

Sounds like there’s an emotional backstory here…

Yes, pets are a nuisance. They destroy stuff, shed fur, and make noise!
There are people who seek emotional security in their mouse, cat or a dog, and I am not one of them!

 

[circleme]

I'm more curious to hear about why you walked away from things that were working, and why you simply don't go back to what was working.

@sonny_1080 I'm curious as well. I did quite well as a freelancer by myself and had a good time vs. money trade overall. I still didn't see myself doing that for the next X years, as at the end of the day it was still a "job". At least it felt like it and instead of having one boss, I had 4-5 bosses. Anyways, in hindsight, I could have solved the "time vs. money" trade problem differently (scaling to an agency for example).

@Oso I did, however, decide to quit something that was successful. Not in terms of fastlane-entrepreneurship, but in terms of making money or better said: providing value and getting paid for it in exchange. Main reason: Not seeing any future in tihs type of "business". Not only because of the time vs. money trade, but also because of the market itself (it was SEO consulting).

 

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[Maxkaz]

And Pets are a nuisance! Waste of time and emotional baggage!

During my FTE there were like 2-3 weeks when I already was suicidal but did not commit the deed because someone had to feed my two doggos and two cats. Eventually even this reason was overwhelmed but a happy ocasion saved me like 6 hours before the action was scheduled.

So never underestimate doggos. They can save in more ways than one. I hug mine every day and dread as every day they get older. This Sabbath a trip to the desert, buddies!

 

[Johnny boy]

If I had worked harder I'm sure I could've added about 1M in yearly revenue to my business but I had fun.

Avg customer = 2k/yr added to revenue each signup.
Avg signups per day in spring I can do myself = 6.
Days I could signup customers = 100.

I could have added 600 customers paying $2,000 EACH YEAR to our company which is 1.2M at a 35% margin.

And that stays for subsequent years because it's recurring customers.

So I have lost a few million dollars.

All of your costs are hidden inside what you didn't do.

 

[amp0193]

Yes, pets are a nuisance. They destroy stuff, shed fur, and make noise!
There are people who seek emotional security in their mouse, cat or a dog, and I am not one of them!

ok, but what does that have to do with this thread?

Who was talking about pets?

 

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[Paul David]

This is perhaps the biggest thing preventing me from wanting to go into business again. Like everybody else, I've failed over and over again. I struggle with seeing my failures as "the sweat of success" because, well, failing sucks.

I wanted a thread that discusses the amount of money people have lost because it's a topic that most seem to shy away from, yet it is probably the biggest deterrent to entrepreneurship.

My goal is to not only have a place where we can share experience, but also provide hope. Parallel with that hope, we can share what we learned from our money losses.

I'll go first:

Business #1: Started a garage cleaning business at 21 years old. Money invested: $0. Loaded up my truck with household cleaning supplies and knocked on doors to advertise my services. Landed 3 clients my first week. Net gain. Should've never stopped.

Business #2: Started a digital marketing business managing PPC ads at 28 years old. Money invested: under $1,000. Joined a networking group and landed several clients my first month. Net gain. Should've never stopped.

Business #3: Started an online review platform at 28 years old. Money invested: over $5,000 of my own money and borrowed another $10,000 from a relative. No clients landed in over 2 years. Net loss. Still paying off relative. Lessons learned:

1. Just because I value something and believe I should be paid for said value, doesn't mean the market agrees. In other words, get hard-proof (sales) before investing money and definitely before borrowing money.
2. I'm incredibly capable of disillusioning myself to believe my own nonsense. I should always have someone with more experience than myself, whom I trust, that I can run my ideas by.
3. Never start a business in a dying industry.

Again, I share this not to discourage anyone, but to bring the realities of entrepreneurship to our attention so that we can avoid these mistakes and recognize the magnitude of approaching business lackadaisically, which I have done in the past.

Someone once said, "I have more respect for those who mess up and have the courage to repair those mistakes; rather than those who never made the mistakes in the first place." -- Me. I said this.

What was your online review platform?

 

[NervesOfSteel]

ok, but what does that have to do with this thread?

Who was talking about pets?

You want connection, get a puppy.