In his interview, founder Julian Clayton shares exactly why he believes his first business failed and the lessons he learned as a result.
Can you describe the business that failed and what your position was at this company?
The biggest failure I've had was an apparel company in the early 2000s. I was the founder and CEO of the company. We were a custom apparel shop that offered almost all printing and embroidery options as well as some techniques we invented in house.
What happened that caused your business to fail?
I let one client, XM Satellite Radio, become too much of our business. About 70% if I remember correctly. We started working with just one channel, and after a year or so ended up being their only apparel provider. When Sirius purchased XM they immediately notified me that our services were no longer needed as they already had a relationship with an apparel vendor.
What lessons did you take away from this failure?
That business taught me a lot in both its success and failure. The main lesson was not to ever let one client be too large of a percentage of your business. Today I have a strict policy on that subject from both sides. I don't let a single customer be more than 40% of my business, and at the same time, I don't give my vendors so much business that I'm too big for them either. I also learned a lot of other things the hard way with that company. We beta tested a lot of equipment in a production environment, and that taught me to ALWAYS have a backup plan ready in case something goes wrong with the test... which it did... many times. I also learned a lot of creative ways to self promote but didn't realize how scalable those methods actually were until it was too late. It was the same business that taught me the risks of dealing with remote software developers after we had a huge failure regarding a web product we were developing.
When developing a new process, I always have a backup plan in case something falls through the cracks. Checks and balances are now a consistent step in everything I put together. I also have a very strict vetting process for any developers I work with, and I have just as strict of a policy on myself regarding how requirements are documented and schedules are managed.
What could you have done differently to save your business?
The main thing I could have done differently was act like a leader in my original company rather than one of the guys in the shop. My job was not to work in my shop. It was to work for my shop. By that I mean I should have been out there finding the next big client, the new service, the great idea that was going to help us improve. I didn't do enough of that, and part of it was because I was spread to thin with other companies I owned, but most of it was just a lack of experience. I trusted people more than I trusted the process, and I don't do that anymore. Not to say I don't trust people these days. I do. But I trust the process more. If you miss a deadline then you missed it. If you ignore the requirements, that's also on you. If you didn't understand the requirements and didn't ask questions, still on you.
Is there any general advice you want to give to an aspiring entrepreneur?
The best advice I can give any aspiring entrepreneur is not to invent problems. When you're first starting out you're gathering opinions from so many people that it's hard to know what you should actually do. A lot of people get in the habit of trying to solve problems that don't really matter yet, if ever. You don't have to have a logo right now, and if that is your focus then you haven't thought enough about your brand strategy anyway. You don't have to have the perfect office, you don't have to know what every feature in your product is going to be, and you don't have to know the end of the book before you start writing it. Don't invent problems. Do work. As much, and as often as possible. Most people drop the ball at that point so if you're not one of them then you're already ahead in the game.