When I started my first business I knew absolutely nothing about business. And even more dangerously, I didn’t know that I didn’t know!
It was a cascade of business mistakes just waiting to happen.
I thought I had a brilliant idea: sell art online so rural Australian artists could exhibit their art worldwide. I would make a commission on the thousands of original artworks I would sell because, like, the internet is a licence to print money right?).
Against the odds, my business, Indigo Art, ended up becoming the largest art gallery in Australia. Sounds successful, right?
I’m proof you can create something amazingly successful when judged by one measure (size) yet size doesn’t really matter if that is not the true measure of success (profit).
I ended up losing every single cent and my confidence was crushed.
In this podcast I shared in humbling honesty the journey of establishing my first business Indigo Art, the reasons my first business failed and why my second business succeeded. I go into the story behind each lesson and share some real ah’ha’s for you over there.
Today, I’ll boil my 4 years of struggle and loss into a summary of the 6 business mistakes I made in my first business, and then share with you what I did instead when I launched my second business, Wonderful Web Women. My hope is you don’t make the same mistakes I did and your journey to success is faster and far less painful than mine.
OK let’s go!
6 Business Mistakes I Made in my first business – and what to do instead
1. I Didn’t Test My Concept
When I came up with the idea for Indigo Art, I thought it was a great idea that was definitely going to take off, so I lunged straight into creating an elaborate business model. I didn’t have any evidence the business would actually work, I was just certain it would because, really, it was such a cool idea!
So I went big. I spent a lot of money on things I felt I needed for the business to work and an amazing amount of time and energy creating what I was sure was to become an Art Empire.
The reality is, the business model I invested so much of my life into was never going to work. I realized that too late.
What To Do Instead: Test Small
Do you have a big concept that you have all planned out? Before spending a lot of money on it, test small. Find the cheapest, fastest way you could start out. You might be completely off mark or you may just be slightly off the mark. When you test, then you can tweak the model to be something that will work.
For my second business, Wonderful Web Women, I tested my concept of finding and interviewing the most successful women who had built their businesses online by simply doing an eight week series of interviews.
I interviewed eight women on live teleseminars, and offered paid access to the recordings and transcripts to test the model. I didn’t make an elaborate membership site or website.
Wonderful Web Women was a success straight out of the gate, and only when I saw this short test worked, did I start to really build on my business model.
Here’s a screen grab I found on Way Back Machine of Wonderful Web Women when I first launched. It’s pretty long so click the image to open the full page in a separate tab.
2. I spent money on all the wrong things
First, I spent money on 5,000 custom designed greeting cards. 1000 each of five designs featuring different artworks. How on Earth was that a good investment for a startup? I thought it was a good idea because it appealed to the artist in me, not the business woman. As expected, 12 years after selling that business, I STILL have hundreds, if not thousands, of those cards which I still use for every gift I give!
Second, I spent tens of thousands of dollars commissioning fancy software. This was pre-Wordpress so there is probably a free app to do what it could now. The software allowed a potential customer to choose an artwork, then choose the perfect frame, then calculate the freight to wherever they were in the world from wherever the artwork was in Australia, calculating the size with the frame.
That’s only a fraction of what this complicated software could do. And I commissioned three different developers until I was happy with the result. (yep, if you have a web agency, don’t you wish I was your customer back then!).
After the customer went through the app, every customer still asked me to get on the phone with them to get my reassurance that the artwork was a good one.
It wasn’t a wise decision. Investment in custom software should only ever happen if the concept is tested and you know you will get a return on your investment.
Here’s an image I found on WayBack Machine of the home page of Indigo Art.
One positive did come from this. I know a LOT about technology and how stuff works. I may struggle with my TV remote but I quickly grasp how new software works and can simplify things easily for my clients. I also will never, ever judge anyone who has invested too much in the wrong technology and finds themselves overwhelmed by geek stuff.
What To Do Instead: Spend efficiently
For my new business, I learned to not spend money on things that weren’t completely efficient. I didn’t have any business cards until years into the business. To fund my business, I went around the house and found things I could sell on eBay to pay for web site software.
I took baby steps and grew the business from that. One important thing I did when starting Wonderful Web Women was ensure every cent was measured and put accounting first. I had a bookkeeper before I even had an income, making sure I wasn’t spending money before I had it.
My advice to you, is work out the cheapest way for you to get started so you can test your concept then invest on top-notch things only after you are on track for success.
3. I Got My Target Market Totally Wrong
This was a huge business mistake.
We’re talking death knoll of a business.
I thought I knew who my Ideal Client was. I thought they were the artists. I thought it was the artists who were just like me. People who were frustrated because they didn’t have a way to reach buyers, especially if they weren’t represented by a gallery and even more so if they lived in rural areas without an opportunity to be seen.
So my model was to charge them $50 to add their artworks to the website and then charge 40% commission on any art I sold. This is the same rate that traditional galleries charged as commission.
Can you see the problem here?
I thought my suppliers were my customers when my real customers were people who were actually going to buy the art. The artists were just my suppliers.
I didn’t realise what a huge mistake I had made until I was broke.
When I knew how I could fix it, I had already lost the energy to invest in the business.
What To Do Instead: Do a lot of research
I spent a lot of time doing competitor research and customer research while working on my second business. I needed to know how other people were already doing what I wanted to do.
I had started attending every event I could where multiple speakers shared how they made money on the internet. I was there to learn, but I quickly found that my target market was also there.
I soon saw these events were dominated by male speakers and the women in the audience were asking “Where are all the successful women?”
I saw the really long lines for the women’s toilet at lunch times at these events and I saw an opportunity. I had a captive audience of my target market!
I literally did my market research in the toilets. While we waited, I talked to them about what they wanted to know about becoming successful on the internet. I asked them what they would want to ask women who successfully made money on the internet if I interviewed them.
As a result, I knew my target market very well.
Here’s an easier way than hanging out in the loos.
You can swipe my survey template I use to research customer needs now.
For market research, I have this tool called the Profitable Avatar Quadrant. It gets you super clear on your four customer avatar types and helps you determine which one is the most profitable. Every time I get someone through this system, they come out with a better understanding of their target market and how to approach them.
4. I Assumed I Knew What My Real Customers Wanted (and didn’t want)
I thought I had done great market research but I was really just looking for data that would support my idea. Have you done this?
For example, I read reports on the art industry. This did give me some great insights into things such as “people want to hear the story of the artist”. But what I read really focused on the frustrations artists had with getting their art seen. I was very, very biased.
If I took the time to do thorough research into the buyers of art, I would have been much clearer on what they really wanted and a business model that would have been far more successful from the start.
Once I did start listening to my market I discovered there was an untapped demand for top quality, original artwork people could RENT to style their homes when selling them, and for offices to create an environment of quality, without the price tag.
If I had continued in that business I would have made that my focus. I had tested the concept (see I was starting to learn) and it worked. But by then I had discovered a much easier way to build a business on the Internet (information products) and so gave the idea to the the new owner when I sold Ingo Art. They ignored the concept unfortunately so it’s no surprise the business didn’t last long!.
What To Do Instead: Ask them what they want
As I mentioned earlier, I did my market research in the toilets. As people joined Wonderful Web Women, I asked every person who joined what they wanted. I developed my first $2000 program because I listened to what my audience wanted. My program has come specifically from my clients asking wanting to know how I do things step to step and how I achieved what I did by eight weeks.
Here are a few things you need to ask about yourself as you continue to change and evolve your business. Are you listening to your clients? Do you know their needs? Can you fit in that need to your current business model? Is your market changing? Are you on top of it? How connected are you to your audience and your target market?
This will help you improve your business and keep up with their ever-evolving needs.
5. I Tied My Personal Identity To My Business Identity
I’m not talking about personal branding. I’m talking about self-worth. If I had stepped back and not tie my identity to what the business was, I would have been more objective in logical with my approach to the business.
As the owner of Australia’s largest Internet Art Gallery I was cool Janet. I was artsy and interesting. My ego got in the way because I associated my personal value with the business. Because the business was failing, I saw myself as a failure as well. It took me a long time to recover my confidence.
What to do instead: Treat your business as an experiment
Wonderful Web Women was about being the passionate reporter when I first launched. It has since evolved into Romance Your Tribe. The business isn’t focused completely on me, my personality, or my ego. Instead, I focus on the systems I have put in place and the results I get. My personality is still strong in this brand but the business no longer defines my personal worth.
Now, I treat everything as an experiment.
I detach myself from the business. And because I look at it objectively, I see what can be improved and tweak and continually improve.
How much of your ego is associated with what it is you are doing in your business? If your confidence has been crushed, it’s okay. This is why I address this with my clients and put a lot of mindset stuff to buffer the blow. All the mindset stuff is important to your business.
Be kind to yourself and step back.
6. I did it on my own
What a crazy, slow way to grow a business. All my training in preparation for launching my first business boiled down to one-day workshop on how to do a business plan. I would have saved $100k and years of my life if I just found someone who had done what I wanted to do and asked them for help.
What to do instead: Seek help
When starting my second business, I identified what knowledge and skills I lacked and needed. Then, I found people who did them well, and bought programs specific to what I wanted to achieve in my business. I became friends with mentors and followed systems that could quickly get me the results I need.
It worked out. I won best membership site within those first eight weeks. I had people contacting me all around the world asking me to coach them and I didn’t even know what coaching was. All because I realized that I didn’t have to do it alone.
The fastest way for me to get from A to B is to find someone who has done it, made mistakes, and tell me all the shortcuts.
I continue to spend tens of thousands of years per year on mentoring, workshops, and travel to meet people. It’s not all about coaching. Sometimes you just need to have this whole community of people who are passionate about the same things as you are so they could offer support.
That’s why I launched the free Romance Your Tribe Facebook group.
So you can get support from people on the same journey. You are very welcome to join us over here.
A Snapshot of Lessons From My Business Mistakes
- Test your concept and start small. Don’t waste your time spending the money on a big business model if you don’t know it’s going to work.
- Be super careful with your money – only spend on what is important. Test your concept faster in the cheapest way you can and then move on or tweak what you have.
- Market research and competitor research. Absolutely do not scrimp on this. You need to know who your competitors are and what your market really needs.
- Keep on asking. Continue to do that. Keep listening, keep adapting your business accordingly. Otherwise you will be left behind.
- Treat business like an experiment. Of course, it’s an experiment that you care about but in this way, your ego is not so wrapped up in this business and it will be easier for you to deal with failure.
- Shortcut the heartache and money loss with mentoring and finding a community.
Make sure that resources are available to you to shortcut your success. Whether it’s a paid program or you’re at least connected to a community that can give you that support. You don’t have to do this alone. You don’t have to be making mistakes on your own. There are people who are going to help you.
This has been a very vulnerable post for me to make so please feel free to tell me any of your insights and what “aha!”s you got from this article. Tell me in the comments below!