FAIL THE RIGHT WAY: 5 WAYS TO LEARN FROM STARTUP MISTAKES

Make Failure Good for You

This company’s fall from grace is well documented, but out of error comes experience. Follow these 5 tips from its founder for a “good fail.”

Richard Keith Latman thought he was creating his legacy when he launched his budget PC-manufacturing company in 1999. But after the attorney general’s office filed a formal action against Microworkz, Latman’s life was irrevocably changed. The promise of becoming Silicon Valley’s next internet billionaire disappeared overnight and Latman moved on to lose 11 jobs in 12 months, as well as go through a divorce and filing for personal bankruptcy.

It took some time, and more failures, but Latman finally found his way back to the industry he loved, selling cars (which he did in record numbers). He simultaneously developed a CRM tool for car dealerships. Today, Latman is once again at the top of his game as the CEO and co-founder of iMagicLab, a software company focused on the automotive industry. He’s also founder of Latman Interactive.

Latman has experienced the peaks and valleys of life and entrepreneurship many times over, yet his uncanny ability to see the next opportunity where no one else does propelled him forward to eventual success and happiness.

“The skill is in getting up to 50,000 feet; above your issues, problems, and opportunities, and being able to look down as objectively as possible to see if there is a path,” says Latman. “If we had to play the role of the marble in a maze it would be much harder to make it through. Look down on the puzzle instead.”

Through his harrowing journey, Latman always kept his eye on his core talents to find his next opportunity. “History is the best judge,” says Latman. “What are the core skill sets that you bring to the world? Always recognize what you do well and what you do poorly and stick with what you do best.”

In retrospect Latman recognizes that he never had a track record of raising money, building big teams, or managing inventory. “If I had stopped to assess my skills and experience when I planned that business I would have surrounded myself with a completely different subset of people,” he says. “Entrepreneurs often look at themselves as who they want to be, not who they have a track record of being.”

In his book, The Good Fail, Latman tells his story and explains why failure can be a necessary stepping stone to success. “A ‘good fail’ is a failure that has a learning value greater than the offset collateral damage,” he says. “These failures lead to new ideas about customers, innovations, and business plans.”

One of lessons that Latman took away from his years of bouncing back is that a good opportunity solves pain. “Everything I’ve done in the last fifteen years is based on evaluating how my idea changes what already exists and how will it improve the situation for my prospective customer. Don’t open another ordinary sandwich shop when the world doesn’t need it; create an opportunity that makes a difference.”

Here are some other rules that Latman lives by. Hopefully, these will help you to make every mistake a “good fail.”

Fail quickly. To prevent your business from failing, allow your decisions to fail quickly.  If you make a poor decision, learn from it, retool and continue to grow by changing and moving.

Launch early; don’t wait for perfection. Get your product into the marketplace fast to begin assessing whether your ideas will work in the real world. This is risky, but you have to be willing to do things differently. People want to help; get market feedback, adjust and move forward.

Don't rely on experts on the Web. People are willing to take the generic opinions of people who write, but these books and articles are not meant as road maps. Find the nuggets in each story knowing that they are designed to pick you up and get you to move; don't make your decisions based solely on the word of others. You can't be a sheep at one moment and a leader the next.

Have faith in yourself. If you doubt you'll be successful, you're right. Your perception of yourself will shape the kind of company you run and your odds of success. If you don't have confidence in yourself, no one else will.

Set expectations with investors. Whether you are dealing with friends and family or angel investors, make your plan clear. Don't let them run the show; this may lead to poor decision making and disappointment all around. Let them know exactly how you will use the funds and when they can expect a payoff. Clearly outlined plans will increase the odds of receiving a second round of funding when you need it.

Latman joined me on The Million Dollar Mindset podcast last week to share more of his story and "good fail" tips. I enjoyed, and learned from, his fabulous insights and hope you will, too.

 

AN ALL INCLUSIVE WAY TO FUND & LAUNCH A STARTUP

Need funding and assistance for a startup business? Why not consider working with an accelerator? Find out here, exactly what that is and how it can help you easily fund and and launch your next venture!

Business Week shares…

A few years ago, when Bryan Jowers and Justin Stanislaw were dreaming up an app to help friends pool money to give gifts, they felt they needed to leave Houston to improve their chances of finding investors and forging connections. Instead of relocating to a Silicon Valley hotspot, they moved to Cincinnati, lured by a startup accelerator called The Brandery. As one of six startups participating in the summer of 2010, they got 12 weeks of intensive help building their product, called Giftiki.

Startup accelerators, which give fledgling ventures seed money, office space, and mentoring through boot camps that typically last a few months, were born in tech hubs such as Silicon Valley and Boulder, Colo. The federal government and economic development groups around the country are banking on accelerators to create jobs and revive local economies in cities like Nashville, Tenn., and Greenville, S.C. The challenge in those places is whether the new crop of accelerators can get more companies like Giftiki—which left for San Francisco after raising more than $1 million in venture capital—to stick around.

Officials in Fayetteville, Ark., think they can. In August, 15 startups will arrive at ARK Challenge, a new accelerator with mentors from prominent Arkansas companies including Wal-Mart (WMT) and Tyson Foods (TSN). It’s partially funded by a $2.1 million federal grant. The ARK Challenge received 83 applications, including some from startups in Australia and Croatia, for its 15 spots. Director Jeannette Balleza hopes the graduates will move permanently to the region. “There’s a model in the Valley that we’re emphasizing to figure out: How do we spur innovation and create jobs but keep it specific to Northwest Arkansas?” she says.

ARK is one of 20 projects to receive a chunk of $37 million in federal money as part of the Obama administration’s strategy of using accelerator and incubator programs to create jobs in different regions. “If you really look at how America is going to be competitive, we need all of our entrepreneurs to be successful,” says Karen Mills, head of the U.S. Small Business Administration. “We need to make sure they have access and opportunity, not just in Silicon Valley, but in Iowa, in West Virginia, in Arkansas.”

Keeping accelerator participants rooted in an area after a program ends requires the right combination of seasoned mentors, investors, and nearby research institutions, says Aziz Gilani, a Houston-based venture capitalist at DFJ Mercury. While many programs are too new to judge, Gilani found that in nearly half of the 29 accelerators he researched for a ranking, none of the graduating companies went on to raise more money. TechStars in Boulder and Y Combinator, located in Mountain View, Calif., were at the top of the chart. The Brandery ranked 10th. Gilani says the most successful ones are “directly tied to what the region is best in the world at.” Houston won’t become a consumer Internet hub, Gilani says, “but an energy-company accelerator would be a slam dunk.”

Get more information at Business Week!

 

BEST BUSINESS TOOL: SOCIAL MEDIA

Why Social Media is Nothing Without Creativity

Gone are the days when you had 300 followers on Twitter and 100 of them clicked a link you posted. Now, you’d be lucky to get five clicks.

The landscape of social media has drastically changed in the past three years. Websites that began as powerful platforms to spread information have turned into streams congested with marketing jargon, discounts, deals and people’s shower schedules. Social media has transformed from an efficient and inexpensive way to use the power of word of mouth, to a virtual mess of a garage sale.

But I still think social media is awesome.

Why? Facebook, Twitter, YouTube and others are completely free services that you can sign up for and use to foster a community of passionate fans and customers. But what people — business owners, especially — need to do when using social media is to think outside the box, and create content that’s worthy of sharing. Consider how startups and other businesses got their names in front of customers before the internet, before TV, before radio — it was pure word-of-mouth interactions, a.k.a. real people talking.

What’s one way to do this? At IWearYourShirt, you may know that four T-shirt wearers and myself will dawn a new company’s T-shirt each day of the week. But recently we launched a new campaign called “Group Shirting,” where an entire of group of people will wear a company’s branded shirt. They’ll also share information about the company on social media. This is word-of-mouth marketing blended withsocial media. It’s also something that few brands have ever experienced — hundreds of people sharing their brand at a time — which makes it something worth talking about. And getting people talking is of course the name of the game.

We’ve run multiple successful Group Shirting campaigns and most recently ran one for AriZona Beverage Co. with more than 200 participants around the world reaching more than 600,000 people through social media in one week. The Woodbury, N.Y.-based tea maker’s Twitter following increased by 10 percent — adding more than 3,000 followers. And the company’s engagement — that is, real people talking about them — was up over 500 percent for the week.

Continue reading this article at Entrepreneur.com after the break!