Below is a brief history of my business failures as a young entrepreneur (and some lessons learned). Last updated on June 21, 2011.
I’ve always been a business-minded person. I told myself early on that I’d never work in a retail store or in corporate America. I wanted to work for myself from the very beginning. I wanted to build something of my own. I wanted to be someone who people would talk about. I wanted to be an entrepreneur.
I started out when I was in sixth grade. While my friends were out playing kickball, I was sitting on the computer in my parents’ room for hours (56k modem ftw) reading tutorials on things like Photoshop and HTML. I had a pen pal in Texas by the name of David Biers who I met through Red Faction (that game was the shit back then). His work inspired me to get into web/graphic design. Everything he made was amazing. I wanted to be like him.
Everyday, I was committed to learning something new. David taught me how to create a content management system using simple PHP and MySQL. I learned from him by copying him. When he created a blog, I created a blog. When he created an image hosting site, I created an image hosting site (my site was called Image”R”Us. Kind of funny how that failed. I’ll save that story for another day). Now that I think about it, I should probably write him an email thanking him for helping me get me started. Anyways, the point is that I didn’t stop learning. I enjoyed every bit of what I was doing.
I landed my first project in seventh grade through Guru.com. It was for a dating company who wanted some changes made to their website. The total project budget was $220. Unfortunately, I didn’t know how to do half the work, so I ended up receiving a check in the mail for $40. It was my first paycheck and the feeling that came along with it was absolutely amazing. I truly felt like a million bucks.
Eighth grade was an interesting year. I was sort of accountable for launching one of the biggest MySpace phishing attacks which indirectly led me to almost getting sued by Wells Fargo. I should probably speak to my lawyer friend before writing about that. I did make a couple hundred bucks in the process though.
Fast forward a little to high school. I hated my classes. I was a decent student, in the sense that my behavior was good and that I usually got along well with my teachers, but I never did my homework. My time in class was usually spent writing down business ideas or sketching up wireframes for websites I was working on.
I launched my first business in tenth grade. The idea was conceived in the back of my Biology class with my good friends Navid and Dharmil. We all pitched in some money and used Navid’s PayPal account to purchase servers to start a web hosting company called eMazing Solutions (yes, I came up with the awesome name myself). Since I had been doing freelance web design work for a few years, I had a couple clients on hand who I was able to convince to sign up for hosting with me. Although we were instantly profitable, the business came with a whole lot of baggage. Customer support was a pain and our billing system was complicated. Some things weren’t working out and I ended up wasting more time than I anticipated. Couple months later, I decided it was better to drop the idea of a hosting company.
By the time I started eleventh grade, eMazing Solutions had taken a different direction. I asked my friends John and Joe (fictional names) to join me in starting a full-blown web development firm. It was going to be a real company. We were going to do it right this time. John was doing awesome work with PHP and Rails while Joe was leveraging his network to get us clients. We would dress up like true professionals and have meetings every week. We were signing contracts and NDAs left and right. We even had our own company credit cards. How cool was that?
We ate out almost every day, bought company cell phones, and even new computers. “Put it on the card” became a popular expression among the three of us. We were confident that we were going to have enough clients to be able to take care of our expenses.
Turns out it wasn’t so cool. Although we were making good money, we were spending even more. In other words, we were being typical Americans (you gotta admit that was a little funny). Some of our clients disappeared on us. They signed the contracts and even met with us multiple times, but when the project was near completion, they stopped responding. We totally got played.
The result? We were three high school students who were $10,000 in debt.
Being in debt is more discouraging than it is scary. I think the three of us quickly lost focus in the business. We tried getting new clients but it just wasn’t working out (maybe it was the effects of the economy or something like that). Around the same time, John became extremely ill and wasn’t able to work for months. We ended up splitting away from the company and using our own individual means to help pay off the debt.
I was now in my senior year of high school. I was pumped. I’d count down the days until my graduation. I was ready to do something big.
I had a friend at the time who’s father was in the commodities business. I was helping him take professional photos of their products for promotional use. Through him, I met Tom (fictional name), who at the time was working on their new website. Tom was in his mid thirties and had recently left his position as Senior Vice Manager at Deloitte to start a startup. He was interested to meet me after hearing about how young I was and the work I had done in the past. Tom saw potential in me.
We met up for lunch at my friend’s office. Turns out, we had very similar goals and aspirations. After bouncing around thoughts and ideas for a few hours, he asked me if I wanted to work with him. Tom was a natural salesman, a networking master, and had over fifteen years of experience in corporate America. There was so much I could learn from him. My answer was obvious.
We started HS (fictional name) in early 2009. HS was a digital media company. Actually, we started out as a “presentability” company, then became a digital studio, and then finally settled as a digital media company. It was difficult to describe what we did because we did just about everything. Our business cards simply read, “Ideas Implemented”. It was a hook to get people to ask the question, “So, what do you actually do?” Not a bad conversation starter.
We did awesome work. The company’s name got out quick and generated a buzz. We created cool videos, worked with some popular companies/organizations, blogged about technology and marketing, and even created a cool iPhone app. I’d spend long hours at the office. If I wasn’t in school, I was working on the company. I really worked my ass off. I was confident that HS was going to be big.
Tom and I were a great team. I learned a lot about business from him. But from time to time, he’d disappear on me. Weeks would go by without a single email or phone call from him. It was his way of recovering from a cold or a fever, by literally sleeping it off. It was weird and annoying, but I didn’t let it get to me. I’ve always been a patient person.
By this time, I was in my first year of college. We had a good number of projects on hand and things were going well. But towards the end of my semester, Tom started disappearing on me again. He would be out of touch for weeks, then after an email or two, he’d disappear again. This happened at least a dozen times. The worst part was that it was all happening during my final exams. Can you imagine how stressful it was to sitting in class and having my phone vibrate non-stop over emails, text messages, and phone calls from clients who were angry because deadlines were missed and they weren’t able to reach Tom for weeks? All I could do was respond saying, “I don’t know where my partner is, but I’m trying my best to get in touch with him. I’m so sorry.” I even took the blame at times. I wanted to protect the company. I genuinely cared about my clients and I didn’t want to screw anyone over. That’s not the way business is done.
After continuous searching, I got a hold of Tom’s brother, who finally got me in touch with him. Apparently, Tom was going through some internal family issues. Although I understood his situation, it was still unacceptable to completely disappear off the face of the planet. Tom always taught me the importance of communication, but you’re playing under the shade of hypocrisy if you’re not talking to anyone, even you’re own business partner.
After speaking with some of my close friends and mentors, I decided to jump ship. It was extremely painful to leave something you wholeheartedly believed in, but it had to be done. I couldn’t let my name be ruined because of someone else’s screw ups. HS was dead.
1. Business isn’t for everyone. If you’re not comfortable working 10-13 hours a day and 7 days a week, you’re better off getting a job somewhere. Also, entrepreneurs go through a heavy ride of emotions. There will be days where you feel like you’re on top of the world and then days where you feel like you’ve lost everything. I personally ended up having high blood pressure and gaining almost 30 pounds in a year because of stress.
2. Start as early as possible. Looking back, I don’t regret anything that I did. I learned from every screw up and I just positively moved on. I’m nineteen years old now but I feel I have more knowledge and experience than many of the older folks in my industry. Not to mention, I’ve built up an amazing network over the years which will highly benefit me down the road.
3. Choose your partners wisely. There’s nothing wrong in working with your friends. In fact, I encourage it. But if they aren’t going to be serious about the business, drop them like it’s hot. Run away from the debbie downers. Surround yourself with people who are better than you. Afterall, you are the product of your environment.
4. Save money. It’s easy to make money, but it’s ridiculously difficult to save it. I could have avoided the $10,000 debt if I was more careful about my spending. I wish I had read a book like this before starting my first business.
5. Be realistic. I was so confident about the success of HS that I was strongly considering dropping out of school for a few semesters. I come from a family where education is taken very seriously, so the process of convincing my parents would’ve been extremely stressful in itself. I’m glad I chose otherwise since there really was no way for me to be able to predict the downfall of the company.
6. Failure is good. When I asked Adnan Durrani for advice, he told me, “The more mistakes you make, the more successful you will be.” I screwed up so many times in so many ways, but I learned so much in the process. This is not the kind of shit you can ever learn in school. You just have to live through it. What doesn’t kill you will only make you stronger.
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