The Business of Failure is Failure
I’m not in a good mood today. One reason is that it’s Monday and I’m always a little grumpy on Monday’s. My “happiness meter” seems to get progressively higher as Friday approaches. The second reason for my grumpiness is that I finally decided to wind down an on-line business that just wasn’t working out. I sold a few items, but not enough to turn a profit and I decided to stop the bleeding. Looking back on why it didn’t work, I realized that I made a fatal mistake, one that I hope not repeat again. What was that mistake? I did poor market research. There was not sufficient demand for the item I wanted to sell. I did spend some money on advertising, which brought in some sells, but still not enough to make it profitable. So, I have to really figure out how to accurately gauge demand for a product before I try to sell anything else.
So, I am going to move on to my next business idea: Affiliate marketing. What is it? In a nutshell, it’s a form of on-line advertising, but you (the affiliate) don’t handle any inventory. You simply set-up websites and write catchy ad’s that will hopefully get people’s attention and make them click on those ad’s. If the person clicks on your ad and buys the product, you get paid a commission by that company. However, the dilemma I had with my first venture will still be in play with this second venture because I still have to figure out where the demand is for whatever product I chose to market. If this doesn’t work out for me, then I’ll will move on to idea number three.
I’ve talked to many people who tell me that they’d like to start a business, but they just don’t have any ideas and I am slowly coming to the conclusion that ideas are not just going to fall onto your lap like osmosis. Unless you have a very particular skill in one area {that you are very good at}, you almost have to keep trying different things and hope that one eventually works. Were will these ideas come from? I think you have to read, read, read. You can always tell people who are not regular readers because you go out to dinner with them and they have very little to say about anything. This has to be my biggest pet peeve about socializing. I’m at the point in my life where I can’t spend 8 hours a day just cracking jokes and talking about nothing. At a certain point, I like to switch to more substantive issues and if I’m stuck with a non-reader, I start getting very annoyed because I feel like I’m not learning anything.
That was a diversion so let me get back to my main point here — It’s all about figuring out where the demand is, then learning how to sell it and I guess I’ll see if my market research skills have improved. Although I sometimes think that if you start with a huge sum of money, either in the form of a loan or as part of a venture capital infusion, your chances of success are much higher. Yes? No?
Kim:
Real estate is an interesting, interesting venture, especially for Kenyans who’ve been brought up believing that it was the key to wealth. My parents were brought up in a generation where land was everything. They lived off the land and to them, that’s where all the wealth was. or, if you lived in Nairobi, it was buy as many buildings as you can and rent them out, but I’m seeing a younger generation of Kenyans who are moving away from the idea of land as a source of entrepreneurial wealth.
If you’ve grown up in Nairobi, chances are, your not going to live off a shamba and dig..so, I’m hearing about people wanting to set-up call centers, and businesses like Mama Mikes and I’m sure we’ll see more of that as a younger generation of more urbanized Kenyans begins to come of age.
Don:
You have perserverance! that’s very good. I ‘ve really come to believe that the key is to do what you are doing — just keep trying different things and eventually something will stick. So, what is your next business idea? I’m surprised your not looking into trading and reading books on that.
Yea… tried three different businesses all with progressively better results but still failures. Last business was killed by cash flow problems. My thinking is that you need about 6 months to 1 years worth of running capital before you can see if it is working. So now I’m on my forth venture… yup landlord. It works but margins are small, using it to build capital for the next idea.
Peace and keep pushing.
Even with large sum(s) of money you still need to have the bases loaded. Take real estate for instance, it is the amount of work an investor is willing to put in, but again not everyone is cut out to screen tenants, track down overdue rents and field middle-of-the-night repair calls.
I am encouraged that you tried. The last thing I (we, everyone) would want to do is look back 10, 20 yrs back and REGRET that I (we, you, everyone) didn’t do it.