Dan Martell - October 26, 2015


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


Episode Stats


Length

6 minutes

Words per minute

210.83478

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).
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.