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It can be absolutely heartbreaking to watch a business go under. Knowing that someone poured their heart and soul into something that ended up going out of business is very sobering.
Running a business is difficult. Working to sustain a brand can be the most rewarding thing, but it can also be the most exhausting thing. One day you feel like you’re on top of the world, and the next you realize that you have no idea how to pay the bills next month.
It’s been said 9 out of 10 businesses fail in the first year, and out of the ones that remained, 4 out of 5 fail in the first five years.
Are these businesses failures? Maybe. Maybe not.
In this episode, we talk about why your failed brand doesn’t have to be a failure, and that it is ultimately what you make of it.
Highlights, Takeaways, Quick Wins
- There’s a lot of value in looking back at the way you could have done things.
- If you strive to adapt and grow, you become better when something fails.
- Failure is not accomplishing your goals in the way you wanted.
- If something doesn’t work, get to your goal a different way.
- It’s possible for your brand to seem successful but not be a success to you.
- Failure is all about learning how to do things different ways.
- Failure can spark a change in focus.
- You can look at failure and pivot your direction by doing something different, or you can work harder to accomplish your goal.
- Your failed brand is only a failure if you allow it to be.
- Have clear, written down goals of what you’re trying to accomplish and why.
- 02:37 Cory: The idea of failure vs. success, not accomplishing your goals, and having things turn out differently is really hard for a lot of people. I know a lot of brands or business owners who either went out of business or for whom it didn’t turn out the way they expected. That’s really hard.
- 03:00 Kyle: I’ve seen that and experienced it a little bit in my own journey as well, so it’s definitely a relevant topic.
- 03:08 Cory: I live in a small town in California. I refer to it as my “dinky little town.” The name of the city I live in translates in Spanish to “mud hole” or “stuck.” It’s charming, isn’t it? I’ve lived here for about ten years. I moved from Washington to California just over ten years ago. I don’t know if this is a small town thing or if it’s just the nature of how the economy has been over the last ten years, but businesses come and go around here like crazy. We live right down the street from an older hotel that has some historical value to it.
- 04:10 There’s a restaurant area directly connected to the hotel. There have been five or six different restaurant businesses in there over the last five or six years. It’s been ridiculous. There are various places across the town where businesses have come and gone, and as a consumer without a connection to those businesses, I think, “Something popped up and it didn’t work out, so it’s gone.” But every one of those businesses represents someone who had a level of investment, who put a lot of work into trying to make something happen. To me, it doesn’t mean anything, but to someone else it could mean everything. It’s tough to watch all these businesses failing.
- 05:17 Kyle: I used to live in a smaller town, and I think it’s really hard because a lot of the people who want to start a business there may not know what they’re doing. That’s not everybody, but it is a lot of people. They think that because it’s smaller, they have a better chance of attracting a crowd, which is true. If they don’t know what they’re doing, they’re under a lot more scrutiny in a smaller town, so if something goes wrong with their brand and they’re perceived negatively, it’s easy to go out of business. The struggle is real.
Tell Your Story
- 06:01 Cory: Sometimes, I don’t want to share this story, but I think it’s important to share. We had a couple of comments in the chat earlier today, and Neal asked, “Is it a bad thing to bring attention to your businesses or brands that didn’t make it if you’re turning it into a story about what you learned from the experience and sharing both what you did right and what you did wrong, making it a teachable moment for others who might be getting into a similar venture?” I think it can be valuable. When I start to share about my experience, it can feel weird, because I wish I had done it better.
There’s a lot of value in looking back at the way you could have done things.
- 06:45 In 2014, I started a small apparel line, doing custom designed t-shirts and things. It was called Three Words Apparel. It went okay. I was still getting into the idea of marketing, doing fulfillment, having my own business, and doing all the paperwork and legal stuff. I didn’t really know what I was doing, but I wanted to do it and have that experience. Now, in 2016, it doesn’t exist anymore. My focus changed, so I wasn’t able to put the kind of energy that a business requires into what I was doing. I look at the shelving behind me, and I see a couple of giant boxes stuffed to the brim with inventory that didn’t sell.
- 07:38 Here I am, having lost a lot of money that I invested into this idea, and it didn’t go anywhere. A lot of people had a good experience with it and it was fun for a while, but I look at that and I say, “Was that a failure? Was that a failed brand? How do I learn and move on from that?” I know that other people have similar stories, where they have a great idea, they get it started, and then it doesn’t go anywhere.
The Importance of Focus
- 08:09 Kyle: I think it’s really valuable to share those stories. It’s very easy for people who are interested in the brand you have now or who see you as someone who suddenly created success for yourself, no matter what that looks like, to assume that you have everything figured out. Maybe they’re going through that struggle. Maybe they have a brand that’s not going the way they wanted to, or maybe they’re going through a hard mistake right now. It’s easy to look at that and say, “People that are successful don’t have this happen to them. Only the successful people can take a brand and make it good, so I guess I’m not going to be successful.” That’s not true.
- 08:49 There are many, many examples of people that tried something that didn’t work, who moved in a different direction or got rid of that brand and moved on. That’s where I find the value in sharing that. Cory and I are part of the seanwes Community, and new people join that community every day who want to do entrepreneurial things for themselves. They look to people who are leading to know how to do things, and it’s much easier to relate to them when you say, “I’ve had this failed brand, too. I’ve tried this thing, too. It is hard. There are certain things I learned the hard way, and I didn’t have everything figured out. I’m still learning things.”
- 09:37 I have a similar story, though not exactly the same as Cory’s. I think it’s valuable to bring in here, too. In 2012, I decided to work for myself. That’s as vague as it was. I was in college, and I knew that I had a lot of experience doing design work in a general sense. I wanted to make a name for myself instead of staying in college and going through this program that honestly wasn’t helping me go towards my goals. I knew I liked digital artwork better than anything physical, and a lot of the program was physical, like painting, sculpting, and all of these things. That wasn’t the direction I wanted to go, though I found it interesting.
- 10:26 That wasn’t the thing for me, for my future career. My dad was very into business, so I grew up around this entrepreneurial vibe. I thought, “I could go make a business. I have the skills, so I know I could make it work.” I was very naive going into it, thinking that I could start a business, offer any kind of design service, and that would be fine. I would do anything I could to climb the ladder, and it failed pretty badly within that first year. I think I’ve discussed this in previous episodes, but I don’t believe in going into debt, personally. That’s a big thing for me. I got down to $200 in my bank account. I got a new job right before I hit that wall.
- 11:25 It was a big lesson for me, and it could have felt like a failure. I thought, “There were things I messed up on and things I didn’t do right. I didn’t focus on things the way I should have.” I moved into a new job that wasn’t ideal for me. I ended up really not liking it, but I had that time to learn, think about what happened, and start something new, which is what I’m doing now. I’m focusing on a niche, which is icons, which I’m very passionate about. It’s great for me to have the example of my own failed business. People come to me and say, “Why should I niche down? That doesn’t make any sense. You should be skilled in 20 different things and you should advertise all of those.”
I have a clear example of what happened when I didn’t focus and when I did focus.
- 12:19 I think it’s highly valuable to share those experiences. For Cory, he started this thing, and it wasn’t really where his passion was, but he tried it, went after it, and now he’s pivoting to something new. That doesn’t mean that it’s a failure, but it does mean that the brand didn’t succeed. That doesn’t have to be a failure for you—it’s just something you decided to move on from.
- 12:44 Cory: I have a good friend named Rod, who has been a mentor of mine for a couple of years now. One of my favorite things that he’s ever said to me was, “Failure is an event, not a person.” A lot of times, when we experience failure or things don’t turn out the way we wanted, we internalize that and we make it part of our own identity. We think, “Because this didn’t happen, therefore I am less.” We internalize it because we put our hearts and souls into this thing, and it doesn’t turn out the way that you want it to. That’s not a reflection on you. That’s a reflection on the thing.
If you strive to adapt and grow, you become better when something fails.
- 13:40 I asked in the chat how people define failure. Jordon says, “Failure is not achieving what I set out to do (which isn’t necessarily a bad thing).” Garrett says, “Failure is not even trying.” Sean says, “Failure is success in progress. The literal definition of failure is ‘lack of success.’ Guess what? Lack of success is something I do not accept. I do not accept lack of success. I will find a way to get there.” All of these are really good. This isn’t a strict definition, but I think failure is not accomplishing your goals in the way you wanted. Maybe something wasn’t what you set out to do, but something else happened. There was a deviation of the plan or on the path, and that doesn’t necessarily mean that you’re a failure or that the goals have been failed.
- 14:35 It just means that something is a little bit different. Something is shifted or changed. Maybe you just need to get to the goal a different way. One time, I proposed to my wife. She was going to school in Santa Barbara at the time, and I took her on this beautiful hike up to this waterfall. It looks out over the ocean with this valley a good hour or so in, and we had both done it before and loved it. I had forgotten how to get to the waterfall. We were halfway up, half an hour into the hike, and I was sweating bullets with the ring in my pocket. We took a left when we should have taken a right.
- 15:29 We ended up in some old riverbed with no water in it where it was all dead, and it was not romantic by any stretch of the imagination. I said, “No, it’s definitely this way,” and I wouldn’t turn around. I realized that there was no way we were going to reach this waterfall, because we were in a completely different part of the hike. That didn’t mean that I was a failure or that my goals were going to fail. I ended up proposing and she was like, “Of course, you’re the most amazing man in the entire universe!” She might not have said that. There was still success, but we didn’t get there the way I thought I was going to get there.
When Success Is Failure
- 16:24 Kyle: The success of a business or a brand can look very different for each brand. Sometimes, a failed brand is a success to everyone else. You may have a very succesful brand that, from the public’s eyes, does a really good job of conveying a message, that is profitable, and all of these things, but the goal you strove toward or the thing you saw as success wasn’t what you accomplished. That can be a failure for you, because you realize that the thing you wanted to do isn’t happening. If your brand is not accomplishing what you set out to accomplish, for you personally that may feel like a failure.
- 17:32 A couple of years ago, there was a game called Flappy Bird that became this sensation. Everybody loved this game and enjoyed it. The developer, Dong Nguyen, didn’t expect Flappy Bird to be a success.
- 18:08 Cory: That’s because it was a terrible game.
- 18:11 Kyle: It was kind of him testing things. He was a game developer, he wanted to make something for IOS, so he made this indie game and he didn’t expect it to go that far, but it exploded. To the public, it was this big success. People thought, “I want to do that! I want to have a game that successful!” On his end, he’s not happy with that, that he’s becoming known for Flappy Bird. He’s getting all these different messages from people, either hateful or good. He’s getting all of this feedback from people that he doesn’t know how to handle, and he ended up pulling it off of the app store for a while because it wasn’t a success for him. Everyone said, “Why would you do that? It was successful! You could monetize it and make money!” He was making money.
- 19:09 Cory: It was estimated, because of the downloads and play-throughs, that he was making $50,000 a day in ad revenue. That was the estimate.
- 19:21 Kyle: For him, it was not a success. That’s important to realize.
It’s possible for your brand to seem successful but not be a success to you.
- 19:39 Maybe it’s time to sell that off and move on or to change the direction, but it’s completely possible to have a “failed brand” that, publicly, doesn’t look like a failure at all.
- 19:54 Cory: It’s all part of learning. Failure is all about learning how to do things different ways.
- 19:59 Kyle: I looked up the definition of learning, because failure is part of learning. Learning is defined as, “The acquisition of knowledge or skills through experience, study, or being taught.” You can’t learn what doesn’t work if you’ve never tried to do it. Failure is, essentially, a stumbling block, a road block in your way. As we all know, there are times when you pass a test really well, and there are times when you fail a test and you realize that you need to take it over again. It doesn’t define your overall success. It’s a piece of the puzzle that you need to examine to figure out what could be done better next time.
Failure Can Spark a Change in Focus
- 20:45 Cory: It also might be an indicator of what you need to do different and the different focus that you need to have. We talk about a lot of brands on this show, but one of our favorite tech brands to talk about is Microsoft. Right about now, some of the talk going around about Microsoft has to do with the demise of Windows Phone. Back in 2010 or 2011, they launched Windows Phone 7. It was a new device, and they were trying to squeeze in there with IOS, Android, and Blackberry. They were trying to become the go-to phone.
- 21:34 Since then, there has been the Windows Phone 8 and the Windows Phone 10. Now, they just had their big Build Conference, and there was hardly any mention of Windows Phone. It’s an indicator that it looks like Windows Phone is on the way out, but Microsoft is pushing messaging, AI, HoloLens, and Augmented Reality, and that’s their new focus. They’re looking toward platform agnostic solutions. They invested so much money into Windows Phone, and it just never took off. There just wasn’t room for a third competitor in the smart phone world.
- 22:29 Blackberry and RIM just tanked. They could look at that and think, “This is a big failure. We’re the worst,” but it looks like they’re taking it. Some people enjoyed it, and that’s fine, but they’re moving on to new things. It’s not going to take Microsoft out of the game. It just shows that they’re changing direction. Part of that is from new management, and part of that was from realizing that this was horrible. Look at all the Windows releases that were terrible, like Windows ME, Windows 2000, or even Windows 8. I still like Windows 7. I think that was the best Windows version.
- 23:19 They could look at that and they could think, “Let’s use this failure to stop innovating and moving forward,” but they’re not going to do that. They’re more interested in moving back into the forefront in different areas.
- 23:38 Kyle: They’ve learned from, essentially, a failed brand. Windows Phone is a sub-brand of Microsoft, so they’ve learned from that, moved on, and decided to shift focus. They have a new CEO now who’s changing things and moving past what Steve Ballmer did with Microsoft.
- 24:04 Cory: His name is Satya Nadella. He’s been turning some things around, and it’s been good. He was appointed in 2014 after Steve Ballmer, who we all know and love.
Your Two Options
- 24:24 I also want to talk about a company that has been operating under the same name since the early 1960s. They had grown incredibly, and I’m not mentioning the name because I want to see if people can guess. They grew incredibly in the 1960s, 1970s, and 1980s, with huge stock options and massive value. In 1993, the shares were worth $35 a piece, and over the course of the course of the next three years, to 1996, shares dropped from $35 per share down to $2.37. There was terrible leadership, power struggles, and bad investments. It was bad. In 1996, the company filed for bankruptcy.
- 25:14 In 1998, they began to look to new ventures and to figure out what had worked in the 1960s, 1970s, and 1980s. They said, “What are we good at? How do we move forward with what the future is holding?” In 1998, they hired new leadership and started looking toward new ventures. Today, that company has made well over $19 billion from their most successful releases. We have some people with ideas of who this brand is in the chat. Aaron says, “Apple.” Nope. Katie says, “IBM.” Nope. That’s not the one I’m thinking of, anyway.
- 25:57 Eric says, “McDonalds.” That’s not it. It’s Marvel. You look at that and you say, “Aren’t they making some of the biggest blockbuster films ever now?” Avengers, Iron Man, Avengers 2, Captain America… they are making all of these movies that are making billions of dollars, and back in 1996, they filed for bankruptcy.
- 26:23 Kyle: That surprised me a lot. I was very surprised about that example. Like Cory said, they’re so prevalent and successful now. It’s weird to hear about that decline.
- 26:37 Cory: In 2010, Disney acquired Marvel for $4 billion. That was a smart move, brilliant, on Disney’s part. In 1996, Marvel could have said, “We’re going to go back to comic books and we’ll try and make this float,” but in 1998, they said, “We’ve got to make this work. We have to see what the next step is. Let’s move toward movies.” Now, they’re worth billions of dollars and they’re making so much money. I use that as an example to say that there are two ways to look at failure.
You can look at failure and pivot your direction by doing something different, or you can work harder to accomplish your goal.
- 27:37 Maybe you just weren’t doing it correctly. Maybe you weren’t working hard enough, and maybe that’s what you need to do—you work a little bit harder in the same direction. Or, you can evaluate your goals to see what the best way is from where you are right now to get to what you want to accomplish.
- 28:04 Kyle: This really makes me look forward to our next episode about managing feedback. I think that a lot of the time, people could perceive their brand as a failure because of feedback. When Marvel was close to bankruptcy, I’m sure the headlines in the news looked something like, “Is the Comic Book Industry Dead? Will Comics Ever Be Printed Again?” There must have been all these negative things about comic books, Marvel and all of those things. It would have been very easy for them to say, “Look what the press is saying. Obviously, we can’t salvage this. It’s just gone. People aren’t interested in this stuff anymore.”
- 28:51 Instead, they decided, “We could have a failed brand here, or we could try to revive it and make it new again and not give up on what we’ve built.” That’s what they decided to do. They had to sift through that feedback and really decide what was right for them.
Your failed brand is only a failure if you allow it to be.
- 29:31 Cory: There are so many others we could talk about, so many brands that have failed and redirected, failed and then stopped, or stopped and then came back with a fury. There are so many stories. You have to figure out what works for you and what’s going to help you accomplish and achieve your goals, and that’s why it’s so important to have clear, written down goals of what you’re trying to accomplish and why. Then, when you hit road bumps like failed brands or failed products, you can say, “I just need to adjust, because this isn’t going to stop me. I’m going to keep moving forward.”
- 30:17 Kyle: At the beginning of this episode, we talked about whether it’s a good thing to use your failed brand as an example. Is it good to talk about that and let people perceive you as having had some sort of failure? We’ve just highlighted how important that is. All of the examples we’ve used or that we could use are out there. They’re public. People know about them, and we learn from those. The goal isn’t to talk about a specific brand and make you think that you have to do what that brand is doing, but it’s to highlight the fact that these brands have had something go wrong, and they’ve learned from that. They’re open about that. Some were high profile, so inevitably, they had to be in the news, but there are also smaller brands that didn’t work out or that shifted. Without those examples, this show wouldn’t exist.
- 31:35 Cory: I don’t know if this show would have started if my other brand hadn’t failed.