Business Successes and Failures

Building Infinite Red

In this episode of Building Infinite Red, Jamon, Ken, and Todd answer a question from the podcast channel in the Infinite Red Slack Community about what they have learned and observed from businesses over the years who have succeeded or failed.

Episode Transcript

CHRIS MARTIN: We had someone reach out on the podcast channel with an idea for an episode. He said: "You three must have watched a lot of businesses starting up/establishing themselves and subsequently succeeding or failing. What have you learned or observed from those businesses? In your view, what made them successful or otherwise?"

KEN MILLER: That is a great question. The first thing I would say is no one, literally no one can predict which company is going to succeed, especially like in a big way. The startups that we have been part of in our careers or, have worked for as clients, the ones that are trying to hit it big, there's no one who can predict that.

That said, we do see mistakes, we do see things that will hinder success or prevent it. One of the big ones I would say is having the wrong amount of money. That doesn't necessarily mean having to little although, that's by far the most common version, but sometimes having too much. I've seen startups that had so much money that they just wasted it and never had any discipline, and they crashed and burned.

So, having too much money surprisingly, can be a problem. Having too little is much more common, you don't hear about it as much, because they tend to fizzle in a very quiet way. There's a fairly frequent thing that we will encounter which is the self-funded entrepreneur who comes to us and says, "Hey, can you do this for $50,000?" The answer is almost always no. Any interesting app is likely to be more than $50,000. But more than that, if your only source of funding is your own life savings, or yours and your parents' life savings, that's a big red flag. Because it means that you have no room to move or develop or anything. If all you have is $50,000 to spend, and it's your life savings, and you want to build the business. I'm not saying don't do it. But what I am saying is you need to use that $50,000 to validate your idea more than you need to build an app or a website or whatever it is that you're looking for.

That can take a lot of forms, right? But take that $50,000, quit your job if you have a job, go interview customers, go do things that don't cost money that let you validate your idea. And then you can go find people who can help you. We are famously bootstrapped here, and the reason that we're able to do that is because consulting is a very easy thing to do the first one. Because it's just you, and you go out and get a contract and you grow from there.

A lot of businesses, that's not true. And if you need investors, because your idea has enough going on that you have to build something, then use the money you have to start that process rather than blow it all on an app that then can't grow because you've run out of money, Todd.

TODD WERTH: If the kind of business you want to build is $10,000 to actually build it, and then $50,000 is a great amount of money because then you can build it and iterate on it and have extra funds. The problem is something like an app that typically costs $100,000 or more is not only do you need the initial cost of it, you need all the capital to run that business and modifying and really adapt it to what you find the market actually wants.

That being said, there's nothing wrong with starting out bootstrapping. However, it is a little bit of a red flag if you haven't convinced anyone other than your mother to give you money for your idea, because if you can't convince one person, it's going to be hard to convince all the users to give you money to use for said business.

JAMON HOLMGREN: To play off of what Ken said earlier, I think that a lot of it is you want enough money that you're not making decisions based on fear, basing it on desperation. But you also don't want to be in a position where you just don't care. Where who cares if you blow this money because it's not your money and whatever. You need to have some level of skin in the game, so to speak.

KEN: Yeah, I would say that the ideal that we look for is whatever budget we think we need to build the most focused version of your app, we would love to see that you have two, three times that total somewhere. Not because we want to spend it for you, but because you're going to need it for something. And it's a measure of your health as a startup.

Even more ideal than that is, you have that much in hand, and you know what you're going to do to get more when you need it.

JAMON: Moving beyond the financial side of it. Another thing that I've observed in my 13 years of doing consulting work is when the stakeholder, generally speaking, the founder CEO, but not always, feels that they have all of the answers already. And they just need to build this thing. Just get someone to build it, get someone to design it, build it, put it out there and the money will flow. That's extremely rare. Very, very rare.

TODD: I bet it doesn't exist at all.

JAMON: I would tend to agree. One of the things that we say, as we're going through the sales process with a particular new client is, if your app does not change during the process, if what you conceive of as being this app at the very beginning does not change, then that's probably a failure. You're probably not listening to your clients, you're probably not ... Or your customers, or your users. You're probably not listening to the experts you're surrounding yourself with, which would hopefully include us.

We've been through this quite a few times, and if you're not willing to say, "Hey, I don't know everything. I need to learn some of these things. Then that's a problem. Of course, conversely, we do expect people to bring some level of expertise in the domain that we're talking about. So, you should have some ... I'm not going to go and just start a business making farming equipment or something. I've never run a farm, I don't have any clue what it would take.

So, having no experience whatsoever in the domain can be an issue as well, and you're not going to be able to just rely on other people to fill in all of those gaps. But, I think that there has to be a happy medium where you do have some domain expertise, you have some things in mind, you have a framework to make these decisions. We also understand that you don't know everything, and that you're going to need to gather information and evolve your view of what the app is going to be during the process.

TODD: Another one that's very common, you see it right up front with people. Either they're telling you their story about their business, or I've worked with them, or whatever, is they don't really care that much. They act like they do, but they don't really. Meaning, they put a few hours in a week or a month or something, and they show up every once in a while.

You get this a lot with people who are extremely wealthy maybe. It's a side thing for them, they're playing around and they just don't really care. It's pretty true that the person who cares about your business the most is you. There will be no one who cares about it more than you. So, if that's not true, there's a big problem. That being said, a lot of successful people don't have a lot of funding, maybe they bootstrap it at the beginning. They don't take for granted they know everything. They asked for help. They try to learn. They accept the fact that they're going to have to be salespeople and finance people, and operations people and everything.

Even if something applies to a particular person that we've already mentioned or are going to mention more, they may have other features that totally overwhelm that meaning. If you're particularly a good salesperson, you can be pretty bad at business and still be successful. That's just a fact. If your idea's so compelling that even though you're a horrible salesperson, when people hear it, they're like, "I want to give you money for this, because it sounds amazing." Then that person knows enough to hire someone who can execute well like us, Infinite Red. I'm not good like Jamon is with the plugs ... those people can be very successful as well.

KEN: To flip this around to a more positive script. To some degree, we approach the clients that we take like an investor would to some degree. An investor is going to do more due diligence than we would obviously, but we're looking for: Do they have adequate access to capital? Do they have a high degree of commitment? Do the founders get along? Are people in agreement about what the vision is if there's more than one person involved?

By the way, we have plenty of projects projects with established companies and it's totally different. Because then, a budget is a budget, et cetera, et cetera. This is talking startups. These are all things basically like, if you have all of those pieces, and a deep understanding of, and relationship with their target customer. If you have all of those, then it's between you and the market. That's ... you have all of the tools that you need at that point to succeed or fail on the merits of the idea.

It is very hard to predict what's going to happen with the market. And that's the part that no matter how good you are, you might still fail. The commitment helps. You hear the word pivot applied to startups because what happens is, they have all the other pieces; they have access to capital, they have a committed founding team, they are working very hard. What the market tells them is that their idea is wrong basically. The thing that they thought that they wanted to build, turns out, they misunderstood the market, the market changed, something happened, and then they're like, "But as we were deep in the muck of figuring that out, we saw this other thing and we're going to run at that now."

TODD: You'll find your subconscious as very creative and very strong and very secretive. What I mean by that is, if subconsciously, a person knows that their business model and their revenue model doesn't actually work or they fear it doesn't work. They haven't actually looked into it, they'll come up with super creative ways to get away from or not do those plans. When you ask them for it, they can either avoid it, sometimes become hostile.

Whatever secret fears you have, sometimes just sabotage yourself by avoiding those particular things. If you find that you're just very anxious about doing a business plan, you don't know why. It may be because your subconscious thinks that if you did it, you're going to realize that even best case scenario, this business does not make money.

JAMON: That's why one of the questions we ask during the sales process is, what are your biggest fears with this process? Because it tends to let them come up with the answers to that without us being hostile about it, or anything like that. We're on their side, we're trying to solve those problems as much as we can.

I had a client back in the ClearSight days. We did a bunch of work for him, and he was this incredible engineer. Came up with just some amazing stuff. But he loved to invent. He wasn't super big on running the business. He didn't really enjoy a lot of the parts of running a business. He brought onboard a series of CEOs to run the business over a period of many years. At one point, it just became obvious to me that that this was really hurting his business. Because all he wanted to do was work on the product, and he didn't want to necessarily work on the business itself.

The stuff he was building was amazing. It was awesome. I really loved it. And he was a very good person. He always paid his bills to us, always appreciated us, but that blind spot, I think it really hurt him.

TODD: Yeah, that gentlemen, I don't know who you're referring to, but that gentleman needs to accept the fact that a business person is super important, and they need to find theirs to be a co-founder with them.

JAMON: I think a big part of that is just seeing it as a business and not just the product itself, which actually is a big failing of a lot of people that think of building apps, they think of the app. They think of the product, they don't think about the business itself. It's hard because business, there's a lot to it. We're doing a whole podcast series on it right now. There's a lot to talk about, and there's a lot to learn, and there's stuff we're still learning.

It's definitely having a characteristic of thinking more holistically about the whole business and being willing to just dive in and learn things that you haven't done before. All of those types of things, but that's a positive characteristic. There are a few other negative characteristics that I've seen over the years. One actually is, over-confidence and over-optimism. Now, I tend to be a very optimistic person. I'm very confident.

TODD: Are you talking about me Jamon?

JAMON: Sometimes.

TODD: I'm very optimistic that you're insulting me right now.

JAMON: But then again, sometimes it's me, and Todd has to ground me. Now, Ken's always grounding both of us at the same time like an anchor in some ways.

TODD: That was mean. That was very mean.

JAMON: We're dragging this thing ... No, I'm joking. There's one gentleman that we worked for a long time ago, and he was very optimistic that the funding was going to come through. So, he had us do a whole lot of work. The funding didn't come through, and that put us in a tough position. That was a lesson that we had to learn, but it certainly put him in an even worse position, because now he owes his vendors money, and it's not ready to go yet.

So, the Elon Musk sort of thing. Although he seems to have access to bottomless levels of cash.

KEN: Elon Musk has easily inherited the reality distortion field from Steve Jobs.

JAMON: Yes, exactly.

KEN: And put it to shame to be honest.

JAMON: Right. That sort of thing can kill you if you're not Steve Jobs or Elon Musk.

KEN: Yeah, and actually, anybody who comes in acting like Steve Jobs or Elon Musk, which usually means being an asshole and playing fast and loose with the facts, which is not what I'm saying that Jobs and Musk are doing. I'm saying that that's what the people who think that they're right tend to do. That is a massive red flag.

TODD: They're pale clones of the original, and probably only cloning the worst parts. A couple of quick hits here. One is, if you don't like your customers, or worse, you hate your customers, huge problem. Your business provides value to customers. If you hate your customers, or loathe them or don't want to interact with them, and you'd be like well, "Todd, that's ridiculous, who would do that?" You would be surprised how many businesses hate their customers. That's a problem, you really should look for customers that you enjoy servicing, you enjoy providing value to, it gives you a lot of personal, and the company and a lot of gratification for sure.

The second one is, when you describe your product or your business to someone, if they think it's awesome, and it's really good, and when can they get their hands on it, that's, that's a good sign. Anything below that from mild praise to praise means they really think your product sucks. Especially, if you know those people. So, take mild praise as this is horrible. So, really find something that where, when you're leaving the discussion, they're very interested in how they can get their hands on this thing and when.

KEN: Related to that. I would say, if you're a startup ... Well, okay two things. Back up. One, what kind of business are you? Are you a startup? By startup, that means you think there's a large opportunity, and you've got to get to it fast before somebody else does. Maybe it's winner take all. You're aiming to be a big thing. It doesn't necessarily have to be like unicorn big, but it's big. In which case, you need to optimize for hitting that and failing relatively quickly if you're not going to. Versus a lifestyle company, where you want to make a long term sustainable thing, you probably want to bootstrap.

TODD: Like us.

KEN: If your ultimate idea is not subject to bootstrapping. It's not something that you have to get to in the next year or two, or you're going to miss it. Then find the idea you can bootstrap that's more practical. Do that first, and then work on the big thing. But those two strategies are different. They require very different mindsets. They require different ways of capitalizing. The worst thing that can happen to a startup by the way, is not failure. Outright failure in a startup is not the outcome anybody wants, but once it's gone, you're free, and you can do the next one or something else.

The worst outcome is kind of success. Where it makes just enough to keep going, and you never know whether to pull the plug. I've seen a couple of those. That is the worst outcome for a startup in my opinion.

JAMON: I worked with a startup many years ago that it was actually a success. I'd like to talk about that one a little bit. The founder, I think he had a lot of the characteristics that an ideal founder would have. He was a very nice guy, but also very driven. He was really great to work with. Everybody that worked on this project really loved it, which was good because you'd get their best work and they would really go out of their way to try to make his product a success.

It was very much a niche market. It had to do with transportation, and he was really, really great at identifying the problem that people had, these transportation companies, and solving one very specific but very painful problem that was hard to solve. You couldn't just do it in house. If you did it in house, you would inevitably fail, and you would have a real problem on your hands. Almost everybody has this issue.

He had us build a web application that mimicked a spreadsheet that he'd been solving this problem with. He'd already gone through the manual labor of figuring out a lot of the issues and doing this almost on a notepad in a way, as a consultant for these transportation companies. He had figured out his business model, and then he had us build a web app. He wasn't afraid to spend money if we said, "Hey, we need to beef up this section of the web app." He would he would totally be cool with it. He wouldn't spend money willy nilly, but if we said it was important, then he would budget the money for it and he would do it.

He was also very good at networking and getting out there and talking to his customers. He would come back and say, "Hey, I've got this customer, it's a big, huge company you've heard of, and they're having a problem with this part of the application, and this is how I think we should fix it." He actually spent the time to figure out how we worked and the language that we needed from him to solve these problems. He would also very much listen to that feedback that we would give him.

He now works for a big company. They hired him specifically for this expertise. They have a lot of trucks on the road, and a lot of different jurisdictions that they're rolling through, and they need to have their ducks in a row. The application itself is, I believe, he's either sold it, or is in process of selling it, exiting. That was a very good experience. It was something that I learned a lot from. One thing that's for sure, is that founder put in a ton of work, learning from his customers, learning all of the domain expertise that he needed in order to be the expert in this particular field. That was very instructive. He was not lazy, he was very much a go getter, but also willing to listen to us.

TODD: Yeah, I think developing partnerships with either your partners, your team your vendors is hugely important. And what I mean by partnership, it sounds like corporate speak or whatever, but what it means is not adversarial. Meaning, one of the things was working with lawyers, bless their heart, as clients, in my experience is they're trained to always start everything adversarial. That can work to a point. But really, if you work as a partner, meaning, you're looking out for your partner's best interest, and they're looking out for your best interest, and then you're looking out for your own best interest, and vice versa.

Then you tend to get the best results. If you're trying to compete with them, or one-up them or nickel and dime or whatever, it's not going to do that.

KEN: If you want to start a business, don't be discouraged by anything what we're saying. Because you can go into it the wrong way, and end up someplace fine, if you're committed. When Todd and I started, we were going to build an app. I had a little money in the bank so I could quit my job. It didn't work.

Let's be perfectly honest. We built a really nice app that 300 people in the world really, really loved. They still occasionally email us.

TODD: We did get a number six in the Apple Health and Fitness category above Nike by the way.

KEN: Yeah, that was-

TODD: For whatever that's worth.

KEN: That was a little bit of a fluke.

TODD: Which is nothing.

KEN: But in any case, it didn't work. We started to take on clients, but we were out of money, and we were looking at, what's going to happen next. I realized that I was like, I will break IRAs. I'll break my 401Ks, I will sell my stock in order to keep this going. That was the point where I knew I was committed for real. It's like until you have a moment like that, you and everyone around you can have some doubts legitimately about whether you're actually committed.

But once you're like, I will put everything on the line if I have to. Not that I wanted to, unfortunately, I didn't have to. But when you make that transition in your head, that you're willing to do whatever it takes to make it succeed, then your odds go way up. Because if you are smart enough to be able to manage things so that you can keep trying, and you have the drive to keep trying even after a failure, then you're doing pretty well at that point.

JAMON: I'm kind of scanning through a list of old clients and I think that of the ones that failed ... I had a lot of existing businesses. They already had business models that were working and things like that. I did a lot of work for existing businesses. But the startups that failed, I think the commonality from what I'm seeing in this list that I'm scrolling through, is that they didn't really have a business model that worked. They didn't really have something that they could point to and say, "Yeah, this is what people need, and this is what they're willing to pay for it, and yes, that will sustain not only paying for this app, but also, my salary and salary of the staff, everything."

That was actually I think one of the biggest issues. The ones that did succeed had a fairly compelling and simple and straightforward business model. There are a few that they would have 14 different ways that they would make money on this, shave a little percentage off of this, and a little bit off of that, and we're going to make a little bit here, or they'd have astronomical user numbers that we're going to be impossible to hit in order to make these numbers work. That was a fairly common thing. And that's something that I think that if you're moving into a business, you need to be able to sit down and look up, and do a realistic projection of how am I going to appeal to these people? How am I going to get sale number one for one thing?

Then, what kind of dollars are we looking at? Is this going to sustain us?

TODD: I have a positive story. None of this is a secret. I wasn't under NDA or anything. I actually, this is circa 2008. I don't know 2007, 2008 something like that. I interviewed at Airbnb. At that time, they were in their apartment in San Francisco. There was the two founders, and a couple other people working there. They had one engineer working on their system, but he was going to school, and he wasn't full-time. They were interviewing me for basically one of the first full-time engineering positions. I did not take that job. I actually took a job with Ken instead. So, thank you for that Ken.

But what was cool about it is a couple things, I knew they were going to be extremely successful for multiple reasons. One, the two young gentlemen in there, they were like 24 at the time, I was quite a bit older then. Were very impressive people. They were trained industrial designers.

They had actually started their business by actually doing it. They did the Airbnb model with their own apartment, and they had some success. But more than that, when they showed me their pitch deck, it was good and compelling. But they had a great customer acquisition plan. Their plan was very specific. The DNC, the Democratic National Convention was happening in Denver that year. It's very common to know that if you have to get housing early, and they completely run out of housing, because the size of the event, and the size of Denver ... I believe it was Denver.

Their whole thing was okay, we know that this periodic thing happens. We know for a fact that they run out of tons of housing, and we know for a fact that there's a lot of young people who go to the political conventions because they're more idealistic in the parties. They were going to do their huge push, and they're planning on putting all their wood behind that arrow to get Airbnb set up and operating and making money at that venue.

As we all know, because we've probably all used Airbnb, or least know about it, they were very successful in their company. Now, they did some more nefarious marketing things later, but just sitting down ... And by the way, when you interview at a very small startup like that as an engineer in the Bay Area, they tend to pitch to you because it's hard to get engineers, and they want to convince you that their startup's going to make it. I did walk away feeling like yeah, although I didn't particularly want to join their company because at the time, I didn't want to be on a tiny team. I wanted to be on a bigger team, and it would have just been a team of me and this one gentleman who was working part-time from the East Coast.

But I did walk away knowing for sure that these people were going to make it because they had all their ducks in a row.

JAMON: Existing businesses tend to have maybe a little better success with startups. They may not blow the lid off of things, but they're going to have a little better sense for some of the pitfalls that can come along. I worked for a company, I was doing their website. This is way early when I was first started. They were selling, I think they were auto parts or something. Something along those lines, it has been a long time.

But they decided they were going to get into re-manufactured parts, and they wanted to sell those online, not just new parts. They did a lot of things really well. That was one of our more successful projects. I think it's still running to this day. What we had to do was make sure that mechanics who were, and still are fairly non-technical, not super computer savvy clientele, that they can jump on to this website, find what they needed, order it very quickly, and be done with it.

We also optimized for SEO and things like that. But this company was owned by an older couple. They worked together, husband and wife. They were really great to work with, they really had a keen eye for business, how they were going to make money with this, how they're going to reach their customers. They just didn't know the online part of it. And that's where they brought us in, and they were very good about listening to what we had to offer.

We also built a back office system for them so that they could monitor all of the orders coming in, provide customized quotes where they needed to, and fill the orders. When we started this project, they said, we see the writing on the wall for our current business, which was aging as far as how they were ... Like anything retail, or online orders is going to get sucked up by Amazon and these other big companies, right? So, they needed to provide something that Amazon wasn't going to be able to do as easily.

After the project, and after it had been going for a while, the owner called me up and he said, "Hey, I think this saved our business. I think this really helped." It was bringing in tens of thousands of dollars per month in revenue, and probably approaching hundreds of thousands. They just had this idea they were willing to explore a little bit into a territory that they weren't very used to. But they also were very much thinking in terms of dollars and cents, business model, marketing, all those other aspects of the business.

That was good for me to see, because I could see that yeah, you can create something out of nothing, essentially. As long as you're willing to put the work in, and have a complete business from start to finish, you don't skip any other steps.

TODD: I would like to ask Ken. Ken worked for a photo which later was bought by Kodak. And then Kodak destroyed it through pure stupidity, but I would love to hear least from your perspective if you feel that's a good story Ken about your experiences at Ofoto?

KEN: I wasn't around at Ofoto when it started by the way. It had already been bought when I joined them. Anything I know about the early stages is lore, it's second hand. But they were always a very sensible company, and I liked that. That was one of the things that I liked when I joined them, which is that you know at the end of the day, they sold photos.

TODD: Could you tell our younger audience who Ofoto was?

KEN: Ofoto was one of the first generation of online photo sharing sites.

JAMON: That's O-F-O-T-O.

KEN: O-F-O-T-O. It was a great name, by the way. It was an amazing name that Kodak just threw away.

TODD: What did Kodak call it by the way once they bought it?

KEN: Kodak Easy Share Gallery.

TODD: That rolls off the tongue. Ofoto was so hard to remember.

KEN: Yeah.

TODD: Kodak Easy Share Gallery. It's just amazing.

KEN: I heard a lot of stories about that. There was a lot of amazing people there. But boy, were they a case study in how to throw away a century of legacy. Anyway, but they were very sensible, right? So, A, they could offer all the photo sharing stuff for free because they sold prints, and that was when people still cared about prints.

Eventually, people stopped caring very much about prints, but their primary competitor who for a long time was never bought by anybody was Shutterfly, and they're still around. I think they bought the assets of Kodak Easy Share Gallery when Kodak quit. That's what I liked about it at the time when I joined them was like, their business model was extremely straightforward. They sold prints at a healthy markup, they had a great operation, there was two teams. There was the site team, which was the user facing, the sharing and all that, and there was the lab team. Which is this elaborate system that controlled the printers and the workflow for the people who operated them.

It was great. I loved Ofoto.

TODD: Ken, you also worked for the company Yammer, who later got bought by Microsoft? Can you tell us a little bit more about that?

KEN: Yeah. Yammer is actually a great example of a pivot. It was a spinoff of an internal project at, I think it was called Geni.com. So David Sacks, one of the PayPal mafia, along with Elon Musk, and Peter Thiel, and all those kind of people. He was the primary founder and CEO. It was a spinoff of Geni that made this internal Twitter-like tool just for internal communication. And we're like, "Hey, this is actually a pretty good idea. It's got some legs." So, it turned into Yammer.

They cared a lot about culture and productivity and how to make a team work and they thought about it constantly, which I always admired. But one of the interesting things that I would say is that, the things that you as a programmer, all the good habits you have as a programmer, if you become an entrepreneur and you're building something new, I'm not saying throw them out. But I am saying your first problem isn't having a scaling problem. Your first problem is to find your market fit, and clean codes, scalability. All that stuff doesn't matter if it doesn't work. It doesn't matter if you don't get there.

The code base when I got to it, and I'm sure all the people here will agree to this, was challenging, shall we say, right? But at that point, it didn't matter as much, because they had the further investment, then they got bought by Microsoft. They had the resources to fix that problem, now that they had a product market fit.

Until they had that product market fit, they just worked like hell. They just blasted that thing out. Honestly, I think for that kind of startup, for a big a startup, that's probably the right way to do it. Blast the thing out, go as fast as you can, and then when you've got success and money, then you bring people on who can come in, be code grownups and figure it out.

The lesson from that one is focus. It's very tempting when programmers become entrepreneurs to be like, now that I get to like make this Greenfield app, I'm going to make sure that it's just really beautiful and wonderful. You know what, that doesn't matter. If you're being so aggressive that you're constantly fixing your own mistakes, and that kind of thing. Then you need to slow down a little bit. But the lesson is, be laser focused on the one thing that is the most important to you right now.

That was a hard lesson for me to learn, but I think it was a good one to learn. Anyway, go ahead.

JAMON: I was just going to say, we've had to apply that to our own business for sure. It's easy to get distracted by all the other things that are possible out there. But making sure that we're laser focused and have all of our ducks in a row, and have a business model, and marketing, and are talking to our clients. One of the things that we did when we actually hired a consultant to go out and talk to a bunch of our clients and ask a bunch of questions, was why haven't we done this before? We tell our clients to do this, but we hadn't done it up to that point. It was a no brainer, face palm moment. Like, oh man, we really should have been doing this.

TODD: Yeah, that highlights a point, you can make mistakes, you can do exactly opposite what we said you can. If you just keep on keeping on, it'll be okay. It is hard to keep on keeping on. The less mistakes you make, the easier it is to keep on keeping on, but that is really the only secret.

KEN: The takeaway from some of these negative stories, by the way, is that you'll see statistics like, nine out of 10 businesses fail, or 19 out of 20 are ... I don't know about the statistics are. But it's something like. Some large number of businesses will fail within the first couple of years.

If you have the things that we talked about—commitment, knowledge of your market, access to capital—your odds are way, way better. Because all of those statistics include all these weird cases that we've seen in our careers. Don't be discouraged. If you're the type who really, really believes that you need to be an entrepreneur, keep at it. Because these are all solvable issues.

JAMON: I think one of the things that I've seen from a lot of companies that don't have much of a chance of making it, is they're just looking for a formula that works. Rather than doing the difficult work of identifying what it is that you have a unique perspective and advantage on and then building a business around that.