Dan Martell - October 26, 2015


The 3 Biggest Mistakes I’ve Ever Made As a Founder

Hosted by
Dan Martell
Mentioned
John Maxwell Constant Contact Millions Spheric
The 3 Secret Agreements You Make When Accepting Venture Capital The 3 Ways Entrepreneurs Self-Sabotage Their Success

Episode Stats


Length

6 minutes

Words per minute

210.83

Word count

1,331

Sentence count

58


Summary

Summaries generated with gmurro/bart-large-finetuned-filtered-spotify-podcast-summ .

3 expensive lessons I've learned over the years that have helped me scale my business and have a lot of success. In this episode, I talk about some of the most expensive mistakes I've made in my career and how they've cost me millions of dollars.

Transcript

Transcript generated with Whisper (turbo).
Hosts, guests, and mentioned names generated with spaCy (en_core_web_sm), reconciled against Wikidata.
00:00:00.500 Three expensive lessons that I've learned over the years.
00:00:03.600 This, honestly guys, this video is not something
00:00:06.000 I was gonna do.
00:00:07.000 I got inspired by watching John C. Maxwell,
00:00:09.900 one of the leaders on leadership.
00:00:12.300 Get that, leaders on leadership, John Maxwell.
00:00:15.100 And he talked, he was on stage and he was talking about
00:00:17.200 some of his most expensive mistakes.
00:00:19.600 And that's what inspired me.
00:00:20.800 I mean, he told some crazy stories about how much,
00:00:23.100 how forgetting his passport at his house cost him $25,000
00:00:26.600 because he had to get a private jet to bring it to him.
00:00:29.800 because he couldn't be late for a keynote he was doing.
00:00:32.560 So I kind of thought through the different challenges
00:00:35.900 and I wanted to share those with you guys,
00:00:37.200 some of those really expensive lessons learned.
00:00:38.780 The first one was at a company called Sphear.
00:00:40.640 We'd been working with Procter and Gamble,
00:00:42.580 an amazing company with their innovation team,
00:00:44.880 and we had the opportunity to build a specific product
00:00:48.280 that not only would they use,
00:00:49.880 but we would retain the intellectual property.
00:00:51.680 And so essentially they were willing to pay
00:00:53.900 or co-fund the development of this idea.
00:00:56.420 And it was such a big opportunity that I asked myself,
00:00:59.420 I need to bring somebody in to help me with this.
00:01:01.580 So I hired somebody to help work on that project
00:01:04.480 and just wanna fast forward what happened is
00:01:06.940 I hired somebody that was super senior,
00:01:09.100 gave them complete control and at the end of the day
00:01:12.860 I didn't manage it at all.
00:01:14.940 And we almost lost, I mean not only did the project fail
00:01:18.460 and was like totally off track after nine months,
00:01:20.940 it cost me probably $500,000 in salary costs.
00:01:25.940 I mean we had a whole team on this
00:01:27.340 and this person was managing it.
00:01:28.780 and then also almost lost the customer,
00:01:30.660 which was a huge customer for us at the time.
00:01:33.160 And that to me is probably the biggest mistake,
00:01:36.980 one of the biggest expensive mistakes I've ever made.
00:01:38.820 The lesson learned there was don't abdicate responsibility.
00:01:42.980 Delegate and then essentially like monitor
00:01:45.780 and ensure that they're delivering on the expectations
00:01:48.020 that you would set for yourself or with your customers.
00:01:50.160 And I think that's the biggest lesson.
00:01:51.820 If you've ever hired somebody
00:01:52.860 and just kind of let them free on a challenge
00:01:54.780 without monitoring, you're at fault.
00:01:56.980 And I was 100% accountable for that outcome,
00:01:58.740 but it was one of the most expensive.
00:02:00.440 The second one, two, was Flowtown.
00:02:03.820 We were working on this product that essentially,
00:02:06.240 Flowtown allowed you to get the social data
00:02:08.620 on email addresses.
00:02:09.920 And because we were so focused on growth,
00:02:11.580 we ended up raising about 700,000 in angel funding,
00:02:15.320 and we were so focused on growth
00:02:16.560 that we did a bunch of partnerships.
00:02:17.920 We did 15 different integration partnerships
00:02:20.960 with MailChimp, and Constant Contact, and Batchbook,
00:02:24.060 and Unbounce, and Formstack,
00:02:27.500 and all these different landing pages or forms
00:02:30.440 that collected email addresses
00:02:31.600 because our secret sauce was taking the email address
00:02:33.880 and giving you the social data on that email.
00:02:35.980 Were they on Twitter, Facebook, whatever social network?
00:02:38.580 Here's the deal, is we were so focused
00:02:41.020 on this one-trick pony, this one feature,
00:02:44.120 and we blew it out as fast as we could,
00:02:46.020 again, 15 integrations in probably 12 months,
00:02:49.480 and we ended up raising venture capital for it,
00:02:50.960 that one day when we went into work,
00:02:52.860 we found out that some of the technology we had built
00:02:55.660 would no longer work, and essentially that one trick
00:02:58.060 was no longer available to us,
00:02:59.560 and we didn't build the product that we had envisioned.
00:03:02.260 We spent so much time on this one thing
00:03:05.220 focused on revenue and growth
00:03:06.560 that we actually didn't ask ourselves,
00:03:08.060 what's the long-term plan,
00:03:09.160 and how do we build out the product?
00:03:10.660 So I wanna share that with you guys
00:03:12.060 in case you're in a mode where you do one thing,
00:03:15.060 and you know that there's a bigger vision for it,
00:03:17.360 but you're so stuck on revenue and growth
00:03:19.320 and just customers that you don't ask yourself,
00:03:21.400 how do we invest in the long-term and have a long game?
00:03:23.800 And that to me, it was such a palatable experience.
00:03:27.740 What did it cost me?
00:03:29.040 Millions, I mean we essentially went to zero.
00:03:31.600 We were doing great, we had like 50,000 customers growing.
00:03:35.280 We were about to close our series A
00:03:36.420 and essentially the product went to zero.
00:03:38.240 We had to rebuild the business over 11 month period
00:03:40.400 before we got acquired.
00:03:41.540 And it was just going through that pain and challenge
00:03:44.380 and we probably could have avoided it
00:03:45.820 if we built other features on top of the social data
00:03:50.260 that we were getting and really allowed the product
00:03:52.360 to stand on its own without this one trick.
00:03:54.600 So that was a huge one.
00:03:56.340 It cost us millions, obviously,
00:03:58.200 in potential kind of like compounded growth
00:04:01.060 and compounded value.
00:04:02.380 And then the third one I'm gonna share with you guys
00:04:03.800 is of Clarity.
00:04:04.720 A lot of people don't know this.
00:04:05.640 My last company, Clarity, was a marketplace
00:04:07.440 for expert advice.
00:04:09.240 And they only know it as a marketplace.
00:04:11.920 Clarity was a place where you go search for experts.
00:04:14.320 What you don't know is that when I first started it,
00:04:16.620 it was actually a utility, a tool for experts, okay,
00:04:20.420 to give people access to themselves
00:04:22.820 through a scheduling mechanism,
00:04:24.380 and if you wanted, you could charge,
00:04:25.840 and we'd donate that to charity,
00:04:27.080 again, if you chose to do that.
00:04:28.800 And we didn't have search in the product for nine months.
00:04:33.540 So check it out.
00:04:34.380 We had thousands of experts on Clarity,
00:04:37.180 people were using it every day,
00:04:38.980 and the number one feature request
00:04:40.520 that everybody asked was,
00:04:41.360 how come I can't search for experts?
00:04:43.380 And my rationalization at the time was,
00:04:46.020 this is a utility, this is a tool, it's not a marketplace.
00:04:49.340 and I fought with our customers for nine months.
00:04:51.560 So what was that, and obviously you know the results,
00:04:54.240 we ended up getting acquired last February
00:04:56.000 and the business grew like crazy as a marketplace.
00:04:59.760 So what was the cost?
00:05:00.980 Well, we built the company in a three year period.
00:05:03.320 This is nine months of me saying no customers,
00:05:06.420 I don't agree with you, this is our vision for the product,
00:05:09.180 and not really truly listening.
00:05:11.200 And so nine months is probably 30, 40% larger outcome
00:05:15.820 because we would have had that time focused
00:05:17.320 on the product we ended up building anyway.
00:05:18.960 So I wanted to share those three lessons learned.
00:05:21.520 Real quick recap, Spheric was hiring somebody
00:05:23.900 and not monitoring and managing them the way I do today.
00:05:26.700 It was just crazy that I would do that
00:05:27.940 with such a significant project and customer.
00:05:30.900 Two, not completely looking at a product roadmap
00:05:33.540 or a service or whatever offering you have
00:05:35.140 and saying, okay, if we're starting here today, cool,
00:05:37.520 and that's what people know us for,
00:05:38.480 but where are we going in the future?
00:05:39.940 Let's get there fast so we can create more value
00:05:41.960 in that chain.
00:05:43.020 And then third is making sure that you listen
00:05:45.380 to your customers and really try to learn from them
00:05:47.880 and don't fight with them, because at the end of the day,
00:05:50.120 yes, you might have a vision, but your customer's decision
00:05:52.820 to choose or buy or use your product
00:05:55.620 is gonna make or break your business.
00:05:57.560 So, I wanna ask you guys below,
00:05:58.980 I wanna first ask you to like the video,
00:06:00.500 but also leave a comment below,
00:06:02.220 answering what one of these lessons learned that I had
00:06:05.880 do you feel like you might have also learned?
00:06:08.040 Or, what's a big expensive story, challenge,
00:06:11.040 lesson learned that you've had?
00:06:12.000 I'd love to hear from you guys below in the comments.
00:06:13.800 As usual, I wanna challenge you to live a bigger life
00:06:16.280 and a bigger business, and I'll see you next Monday.