10 Mistakes By Famous Entrepreneurs
Today in the world of internet and easy access to money, almost each one of you harbors the intent to become rich and successful in some way or the other. While some look at conventional methods like a plush job or a comfortable lifestyle, there are some who want a little more from life. Their aspirations are predominantly about providing wings to their ideas and bringing about a radical change or introduce a novelty element with a bang. You might say that this is the kind of passion you would mostly associate with entrepreneurs.
So does that mean that if you have a great idea and can work towards generating the fund required to give shape to that idea, you can become a great entrepreneur? Well not exactly.
More than passion and funding, a successful entrepreneur is someone who is intensely motivated, has the guts to stand up against the naysayers and the confidence to ensure they are able to give shape to their ideas despite all odds.
There is another unique feature that often draws the fine line between success and failure for an entrepreneur, and that is the ability to own up or recognize one’s mistake and undertake course correction there on.
Perhaps it is most beautifully borne out in the words of Akio Morita when he said,
“We all learn by imitating, as children, as students, as novices in the world of business. And then we grow up and learn to blend our innate abilities with the rules or principles we have learned.”
The man in charge of creating one of the most dynamic companies of all times truly embodies the spirit behind the saying that ‘failure is the stepping stone for success.’ When his initial entrepreneurial initiative of creating a rice cooker did not take off as expected, it did not stop him from taking up more challenges. In fact, it further fueled his imagination and motivation to learn the big lessons in excellence that went on to lay the foundation of the world’s most dynamic and change-friendly company, Sony.
In fact, even Morita’s successor Norio Ohga embodies Morita’s keen sense of humility and ability to turn his mistakes into the stepping stone for success beyond imagination. Ohga joined the company in the 1950s. Morita hired him as he appreciated the keen sense of judgment, observation and extreme honesty with which he had written a letter to the Sony Chief about the poor quality of the company’s tape. Instead of getting angry or rebuking, Morita identified in him an honest voice whose keen eye for improvement can only help his company prosper a lot more than he could have done alone.
So not just Morita, entrepreneur’s world over have often laid the foundation of their successful startup on some failure or the other. The only difference is instead of giving up that easily as most of us would have, they used this as a foundation for setting up their dreams in concrete. Here is a collection of some of the most interesting failures of well-known entrepreneurs and how it spurred them to greater success eventually.
1. Steve Jobs Recruiting John Sculley as CEO of Apple
As Jobs went about the job of setting up Apple, he realized that he badly needed an experienced partner who could handle the operational and marketing requirements. Sensing this need, he lured John Sculley to the job and made him an offer that he could not refuse. Sculley sure joined in but within two years also created a situation where he actually organized a campaign to fire the man who hired him.
Surely it was a mistake, but that did not deter him from picking up the thread of their lost opportunities. The lesson he learned was not just to make the decision wisely but also at a certain point; it was important to keep some controls to oneself. Perhaps that is how all the product launches became Steve Jobs’ baby in the newly refurbished company that he claimed back. He came back with more passion, grit, and commitment and transformed Apple into literally a force to reckon with.
2. Bill Gates Ignoring the Trend Set By Search Engines
When we talk of Steve Jobs, it is difficult not to mention another iconic entrepreneur of our times, and that is Bill Gates. Founder of Microsoft and a visionary, who pioneered the use of graphics interface in computers that the world has come to know as Windows, Bill failed to spot the next billion dollar opportunity and that is the storm raised by search engines.
Though Microsoft introduced MSN the same year that Google came into being, there was a stark difference in the overall user experience. While Larry Page & Sergey Brin’s product was fast, innovative, and delivered relevant results with a much greater speed, MSN lagged behind completely. Microsoft never even bothered to develop a search engine of their own and rather depended on the existing resources of Inktomi. By 2002, Gate started feeling the heat of the storm that Google stirred. Its revenues tripled to $962 million by 2003 while Gates’ later offering Bing only managed to claim a minuscule portion of the entire search engine market.
The lessons learnt, it is wrong to overestimate the potential of any innovation. As Gates said, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
Just because something worked for a company does not mean that it will always. To be flexible and to predict the trend is what keep businesses ahead of the competition.
That is a big lesson for you and me too. If you can achieve to make money through something like trading, it doesn’t mean that you can rely on it for good. A new rule or a big change in the markets can prevent you from making money. You should be aware never put all your eggs in one basket. Just a single success cannot cover everything we need in future and in our whole life.
3. Google’s Larry Page Could Not Capitalize On Social Networking Platform
Ever since Larry Page and Sergey Brin introduced Google, it has been a rage. Starting with search engines, it kept expanding service range in a slow and determined fashion with every element being added in an unobtrusive manner and highlighting Google’s core idea of simplicity and ease of use. But in the bargain just as Bill Gates missed out on the Search Engine opportunity, Google missed out the social networking revolution.
Larry Page did realize the potential of social networking and offered as much as $30,000,000 to buy Friendster, a social networking site in 2003. When they refused, Page should have used the existing resources to create a separate networking site but that was not meant to be, and instead FaceBook happened.
The lesson they learnt is to never stop a big trend or opportunity that you feel the business can capitalize upon. It will only create a window for another aggressive player just like FaceBook did in this case.
4. Hiten Shah, Co-Founder at KISSmetrics on Inappropriate Fund Allocation
Hiten Shah and his partner spent a whopping $1,000,000 on a web hosting company that they never ended up launching. Driven by the passion to create a perfect solution, they did not even bother to study and understand the customer requirement before designing the website. It was not just the amount of money spent but also a significant amount of time and energy has been used up in the planning and creative stage of this website.
Therefore, what is the lesson that they learnt? Not only did Hiten and his team learnt to spend smartly, but also optimize the entire learning opportunity that one gets. The primary focus needs to be perpetually the primary priority while creating a winning product. Chastened by this experience, Hite and his team have gone on to create two successful analytics firm, KISSmetrics and Crazy Egg.
5. Robin Chase Failed To Take Customer Preferences In Account
Robin Chase, the founder of brands like BuzzCar and ZipCar, says that when they were conceptualizing their second company, GoLoco, another social ride-sharing site, they spent way too much money and resources on the website and the software used without spending adequate time on market study and customer preference.
The result was that they had to undo a lot of guesses they had assumed in the first go and understand the matter from the beginning with a brand new perspective. This went on to highlight the fact that customer preferences and in-depth study are those crucial aspects of a startup that can in no way be compromised. The result was ZipCar and the additional vigor and enthusiasm with which one was launched and the remarkable difference that a proper market study ensures.
6. Rand Fishkin On The Importance Given To Big Bang Projects
Rand Fishkin, the founder of Inbound.org and CEO Of Moz, may have identified the trend appropriately but lagged behind on the timing aspect. One fundamental reason was the fact that they got involved in big bang projects repeatedly. These projects required a lot of development time without too much of a visible progress. Project delays coupled with missing the deadline, budget and plan is never great news in the Startup world.
Rand’s fundamental message to any start-up is incorporating agile development coupled with adequately visible progress is primary. Not only does it create a greater leeway for the company to diversify into multiple elements, but significantly bring down the gestation period of the business.
7. Leo Laporte on The Perils Of Doing Everything On Your Own
This is such a typical characteristic of the startup world . You are so passionate and fired up initially that you do not pay heed and insist on managing on your own and even indulge in micromanaging to an extent.
Leo Laporte, the founder of TwiT network, says his biggest mistake was trying to do everything on his own.
He knew all he needed to know about media, content and technology involved in it. But what he did not know was the basics of making a viable business platform. The result was after a few years of a lot of growth and rapid rise; the business started to stall.
He ended up spending more time firefighting and doing very little what brought both joy and money to them. Laporte took care to not let matters go out of hand and hired a business partner who is given complete opportunity to execute her bit of the job flawlessly without any interruption.
8. Dharmesh Shah Of HubSpot On The Dangers Of Being A Parallel Entrepreneur
Again, I am tempted to reiterate Bill Gates famous line, “Success is a lousy teacher. It seduces smart people into thinking they can’t lose.”
This is exactly what happened to Dharmesh Shah. After the reasonable success of a software company which began clocking $10 Million plus revenue, Dharmesh thought he already had a team in place and why not try heading two different startups at the same time. The result was disastrous. The old start-up team felt neglected, and the new team did not feel enough of the pressure, and both began losing ground.
He advises entrepreneurs that it is never a good idea to control two horses at the same time. It creates unnecessary chaos and significantly tones down success rates. An entrepreneur is never short of winning ideas but they need to channelized as one at a time as they are generally very time-consuming and need a lot of attention in the initial stage of operations where functions are being set in. At that point, however efficient the team might be, it is always a great idea that the founder devotes maximum time on the project.
9. Derek Sivers on The Importance Of Maintaining The Company Culture
Derek Sivers, the founder of CD Baby says the biggest mistake would be to let the core culture of the company slip away in the name of growth.
The result the company grows aimlessly a rather robotically without the core ethos that resulted in its very inception. Getting the culture corrupted would often interfere with the natural progression and growth of the business as well and thereby defeating the basic purpose of the startup, the vision with which it was created.
10. Mark Zuckerberg Deciding To Be The Face Of FaceBook
Just like leaving complete control of the startup you envisaged is wrong, the other extreme, being featured extensively is also equally deterring for business prospects. When Mark Zuckerberg created Facebook, it was a work of an absolute genius, but by involving in every aspect of Facebook, that was being promoted he almost squandered a golden opportunity. Mark increasingly began to be underwhelming, arrogant and uninspiring.
The lesson learnt is a crucial one. When a company begins to clock growth, Zuckerberg realized he is not the best person to take it forward. It was time to step back and stick to your ‘circle of confidence’ as Warren Buffett often mentioned. One basic fact is that however strong fan following one might command, it is never a good idea to dominate the trend. The idea is to make the trend a friend and then proceed forward.
As we draw to a close on this article about the top mistakes committed by entrepreneurs and the lessons they have learnt from them, I feel it is incomplete without the mention of the quintessential GM Chief, William Durant. He quite correctly predicted the eventual rise in cars in American household to the extent that automobiles would become very common and users would increasingly hanker for variety. Durant decided in his mind that he was going to create cars of all shapes and budgets to suit the needs of a wide cross-section of people who would be using it.
He financed these purchases to support his vision with GM stocks as a result, the company began getting overwhelmed by unpaid bills by 1910. The Board of directors removed him from Chairmanship and incorporates a cautious as well as a credit-friendly regime. He then went on to create Chevrolet. It soon began topping the charts and converted it into a number one automobile company.
He used the money generated thus to buy back his baby GM, but Durant soon enough got himself into a financial hole. His corporate partners once again threw him out of the company. He went ahead to form another rival company, but, by then, the master had lost his touch. He lost almost everything he had and died a broken man.
Meanwhile, his successor at GM successfully rationalized the cost overruns and ensured this company to be amongst America’s gigantic auto players.
While the jury is still out on how differently Durant would have handled the GM future had he been alive, the fact is when you go on to create something as precious as your company, it is very important to never lose control and neither should once policy dominate so much that those working with you begin to feel suffocated.
Perhaps, one fact where Durant’s absence is markedly felt is in the range of cars that GM developed thus far and the decided lack of enough exciting options. The bottom line, therefore, is that while different entrepreneurs have different style of functioning and attaining success, the fact remains that the ground rules with regard to control and work power management remain crucial.
Good luck 🙂