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| I was barking up the wrong tree with this venture. |
Such is the problem with a product for a very limited market - whilst there are millions of people in the UK who use the trains everyday, there are only so many rail companies and that means we only have so many companies to work with. It was a risk I understood when I started this venture and we have ran into a dead end when our main partner pulled out of the trial To be honest, I wasn't that disappointed when I heard the news - my greatest fear was not this product failing, at this point I'm able to just say, "fine, that's it, I've tried my very best, shame it didn't work out - it is time to move on with my life and years from now, I can look back on this and marvel at the experience." My greatest fear was that the business would only turn out to be a lukewarm success that plodded along, barely breaking even and I would be forced to make a decision of having to either pull the plug on it or investing more time and money to make it work. If I was going to fail, I wanted to fail fast so I could learn my lessons, pick myself up and then move on.
I guess it is somewhat like a relationship - when you start dating someone, you either want it to be so amazing you'll wanna totally fall in love with that person or realize that person is just not right for you and move on. The worst scenario is when that person turns out to be pleasant enough and so-so, but really, nothing special. Yet at the same time, s/he is just not repulsive enough for you to have any substantial reason to dump or ignore; so you end up stuck in a somewhat mediocre, boring relationship which doesn't really make you truly happy. So whilst you're not lonely, you're not exactly madly in love either. Well in that context, I've just been dumped - which is fine by me, so I can then move on to the next chapter in my life having realized just how freaking difficult it is to work for a start up company.
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| How successful does a start up have to be to be worth it? |
Right now, I feel like a contestant on The Apprentice who has just been fired and I'm thinking about what I have learnt from the experience. Where do I even begin? I think the first lesson I'll take away from this is to stick to what I know best: I have felt like a fish out of water, ikan di luar ayer, from day one and it never got any easier. I'm Mr Corporate, that's my background and that's how I function - working in a start up environment for high tech firms was so far out of my comfort zone. I think I would be a lot happier and comfortable working with people who are more like myself - I'm talking about a formal corporate environment where every man would be in a suit and tie and nobody would even contemplate loosening their ties whilst in the company of others. That's where I feel most at home, not in the high tech sector. There is a good balance between being open minded to try new challenges and realizing that a fish out of water is never going to swim. After all, what have I got to prove to myself or anyone?
If anything, I am actually quite relieved right now. I knew how much hard work I would have had to put into this, in order for it to work and I have seen from this experience just how many times I have had to change my plans and be adaptable to changing circumstances. It was not that I was afraid to put in the hard work that was necessary to make this work, but even if we did go ahead with the trial, it was not going to be easy to prove that this was going to be a roaring commercial success in the short run. As for now, I am going to take a few days off, and take a trip abroad. I wasn't going to be able to travel at all because of this start up venture, but now that I am suddenly free, I should take a trip as soon as possible before I get stuck into something else. I also have a renewed sense of respect for all the people I have worked for in the past in small/medium sized companies, now I realized how hard it is to get a business off the ground. I've not always got along with my former employers (and that's just putting it very, very mildly to say the least), but after this experience, I have a brand new understanding of their perspective of running a small business.
And as for the future? Who knows. But allow me to answer this question: will I end up having to drive a fucking taxi? Fuck no, hell no, no fucking way. I will go back to working as a sales & marketing consultant - if I was good enough to work as a contractor for Google in three countries, then I know I am good enough to find more lucrative contracts in that field as there will be a demand for my kind of skills. And besides, whilst I may possess a driver's license having passed my driving test in 1998, I am actually a pretty crap driver having not driven much at all since I got my license. If there's one thing I have learnt from working at this start up is to stick to what I'm good at and avoid what I am inexperienced in. I am currently watching the BBC series The Night Manager - it just made me think maybe there's more to life than slogging so hard to make a small business work? So, what would make me truly happy in 2016?
So that's it from me for now. I'm going on Skyscanner to find me some cheap flights to get away in the next few days. What do you think? Would you try to do a start up or is the risk of failure just too much? Am I making the right choice by walking away at this stage and cutting my losses? Let me know what you think please. Many thanks for reading.
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| I don't regret having given this a go. |
And as for the future? Who knows. But allow me to answer this question: will I end up having to drive a fucking taxi? Fuck no, hell no, no fucking way. I will go back to working as a sales & marketing consultant - if I was good enough to work as a contractor for Google in three countries, then I know I am good enough to find more lucrative contracts in that field as there will be a demand for my kind of skills. And besides, whilst I may possess a driver's license having passed my driving test in 1998, I am actually a pretty crap driver having not driven much at all since I got my license. If there's one thing I have learnt from working at this start up is to stick to what I'm good at and avoid what I am inexperienced in. I am currently watching the BBC series The Night Manager - it just made me think maybe there's more to life than slogging so hard to make a small business work? So, what would make me truly happy in 2016?
What about integrating your project into other European railway systems?
ReplyDeleteWe had talked about this with someone from Hungary (smaller country, less complex railway system, more keen to modernize) and her reservations were as follows:
Delete1. You guys are from London, why did the British rail companies choose not to work with you? Why are you knocking on the door of the Hungarians when you have plenty of train companies to work with in London?
2. You need more capital if you want to deal with the Hungarian system as you will need to base yourselves out of Budapest for a while, hire an interpreter to help you with the language barrier.
3. And the Hungarian train companies may view you with suspicion as you're not local - yes your product is good but you're seen as a foreigner with a foreign product; you're not a local who has developed a product for the Hungarian market based on local understanding & knowledge.
But the biggest challenge we face is that if we take this to another country, then we will face the same problem of "why didn't you sell this product to your British train companies? Why didn't they like it enough for you to make a deal with them in London?"
If we had been successful in the UK, then we would have targeted other European countries. We'll see if there's any intellectual capital that we can salvage and sell off to someone.
Wasn't there any way that field testing could be conducted via dissecting your product down into smaller parts that would require lesser effort and commitment from the rail company? As far as I know off, large organizations that are very conservative in their process would recline if a product causes way too much changes to their SOPs. The more well-known approaches that some of my ex-PMs adopt were to try dissecting the product/service into smaller parts that require less commitment from the clients and get them to adopt it phase by phase. The pricing would of course, be amended to reflect such a change.
DeleteWell, we had developed the product to a point whereby we had submitted a proposal for a small-scale trial involving 50 units. Any less and it would have been meaningless - ie. we couldn't have broken it down into anything smaller for the trail company for the test to have yielded some meaningful data for evaluation. We worked with a total of 7 people from the rail company and I could sense that 4 of them liked the product, one was neutral and 2 had the mindset of "I like the product but it is just too much additional work for me to integrate it into our existing system, so it is easier to say no than to use your product than to solve the problems. I don't care about solving the problem for the employer, I just don't wanna increase my personal workload in the short run if I agree to take on your product." So I think I know exactly which two individuals put their foot down and said no because they were thinking about their personal workload increasing (like how many calls + emails from me a day, meetings with me, follow up after the trial etc). So yes, it was their SOP vis-a-vis workload.
DeleteIn a small company, people are more willing to try new products but for a company as big as one of the train operating companies in the UK, well, they think, if I quit tomorrow the company will still function as it has always done, I am just a tiny cog in a big machine, so with that mindset, they focus on their own workload rather than looking at the big picture of problems that the company needs to address/solve.
But trust me, we had addressed that but still couldn't get pass their mindsets. It was not the scale of the trial that was the issue. 50 units at no cost to them at all - but cost/commitment was never the issue here; it was 2 people thinking "damn how much work is this Alex going to cause me with his new product? I don't care how brilliant it is - I just wanna make sure I leave work on time every day in April. Alex can go stuff his brilliant inventions where the sun don't shine, I don't care how good it is."
Dare I suggest SMRT? Or even Asian railways?
DeleteI'm speaking out of my arse now, but for all you know Korean, Taiwan or even Japan may be interested.
You don't realize how expensive it is to get this far in the process: say if I go approach the Koreans. Well for starters, I will need to base myself out of Seoul for a few months at least. I will need to hire a bunch of interpreters as I don't speak much Korean. And even if I invest thousands of dollars to get that far in the process, they may still turn around at the end of the day and say, "nah not really for us, no thank you."
DeleteThe reason why we could try to get this off the ground in the UK was because of two reasons:
1. We had government funding to incubate the start up
2. We were able to keep costs low - for example, I own my own home, I go home and eat my dinner at home etc.
To do this in Korea (or any other country) without a cent of government money and having to incur huge amounts of expenses; it just isn't going to work out financially. I will need to invest a huge amount of my own money to take it that far, whereas I didn't have to invest my own money into the project in London (and even received some seed capital from the government). I just don't have a huge pot of money to use to try country after country with this product because to try to flog it to another country would take a 5-figure sum to get off the ground and there's just no guarantee that it would pay off. In short, the risks of trying it in another country (apart from my home country, the UK) are too great.
The product is for long-distance rail (ie. hundreds of km between cities, over an hour journey time), not very short distance commuter rail like the MRT. So Singapore's MRT is not a match for the product.
Good luck with your next project!
ReplyDeleteThanks - I still don't know what it is yet. Taking a holiday first.
DeleteYou'll be fine man. Like you have said, starting a business was you wanting to do something, to try something out. You don't need it for retirement.
ReplyDeleteWhich brings me to one question. Do you think that entrepreneurs should be provided with social safety nets, ie. by their governments, so that they are free to fail and work their thing out without having to worry about making ends meet. Or do you think that entrepreneurs should all proceed like the way you have, which is to establish passive income, accumulate some sizeable savings, before going out there?
Well, if entrepreneurs need safety nets by their governments, I would think that their business plans and ideas would have been flawed from the start. That is not to say that there should not be without safety nets, just that the safety nets need to be created and planned out by themselves. If a startup has to rely on an external safety net, one could imagine it growing into a sinkhole of funds.
DeleteHi Raymond. Thanks mate, yes it was something I wanted to try. I am the kinda person who would say yes to an opportunity like that, but I went into it with both my eyes opened, I realized what the risks were going to be and my mistake was underestimating the kind of mindset I was up against (see my comment to Weiping above) and I had also overestimated the projected profit margins. Even if we had gone ahead with the trial, I would have still faced the prospect of making a lower profit margin than my original business plan. I was simply ignoring that problem with a "I'll cross that bridge when I come to it" shrug - but that problem has no easy solution.
DeleteI was already given help by the government in my start up - sponsored office space, IT support, consultants, legal help, even food + drink, access to networking events, seed capital etc: they were all supplied to me for free. The only thing I didn't get is a salary - now given the amount of support I had, I still failed because I still made some mistakes and there is a part of me that is ready to blame both the mindset of train companies for being afraid of new technology and I also think that I could have been given more access to pitch and convince the decision makers at other train companies as well; but at the end of the day, if people like me who got so much help still failed, then what hope do others have if they are trying to do it with virtually no help?
I think the UK government has struck a right balance - they do give selected start up some support and tell the others "good luck, but we're not giving you any help". You just can't back every individual out there who wants to start a new business because many will fail like mine for a variety of reasons.
And yeah I have enough passive income from my property portfolio - my business fails, guess what I do? I am booking a holiday today to go relax as I don't have money woes. I'm rich enough to do it to prove a point, rather than try to pay my bills.
Sounds like a good decision you made. I once had a start up tackling logistics and inventory problems for the fashion industry. Like you, I was Ms Corporate before that and decided to try to tackle the problem of huge fashion chains dumping their unsold inventory into land fills (really, they would rather do that than to devalue their brand and give it to the more needy.) Anyway, we did get off to a good but slow start and one by one, our partners pulled out. We did get some publicity (which is my forte) but news articles can't get us enough sales to even buy myself a decent lunch. On top of the stress of trying to keep biz alive, I really couldn't stand working with my closest business partner - my hubby. Our marriage was strong but even then, we had days when we just want to kill each other. Dinner was never calm. There's no small talk, only business talk. We finally decided to shut it after a year when our savings was depleting faster than we can secure funding. I only wished we had done that sooner.
ReplyDeleteHi Vanessa, thanks for your kind words. Yeah it was pretty much like that for us, we were meant to trial the product with a big company and then they chickened out on us. I think the key problem for us was having to deal with two people in their sales department. For them, if they tried this new product with us, either it could go really well or if our product failed, then their bosses would hound them and give them a hard time. But if they decided not to even touch our product at all, then there's no risk of anything going wrong and in the short run, it will also reduce their workload. That's why they decided not to do it.
DeleteI am considering doing another start up again soon - but I have another offer of work come through. I will see how good it is (I am seeing the guy for a meeting next Weds to talk about his offer) and it may be less stress simply working for someone else.
That's good. I took up a few short term projects after we shut down the company, but after a year or so the monotony and corporate bureaucracy just weighed down on me. It is true that people who have been entrepreneurs cannot really fit into a corporate structure again. I think working for someone else is certainly a lot less stressful but at the same time, it cannot possibly last. I have too many highly paid professional friends (bankers, engineers, lawyers) who find themselves retrenched in their 50s and have trouble finding another job. These are professionals working in Zurich, LA, London and they face the same problem - too expensive to hire. I am turning 40 this year and have another good 10 years to build up my own business to ensure I never have to be at someone else's mercy for dough when I turn too old to be employed. All the best for your second start up.
ReplyDeleteThanks Vanessa. I'm turning 40 in a few days!
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