January 1, 2009

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Bound to Succeed

Kelly King Anderson was pregnant with her third child, and exhausted. She had...Read More

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Article

Bound to Succeed

Business Risks Launch Entrepreneurs Toward Success

Janine S. Creager

January 1, 2009


Kelly King Anderson was pregnant with her third child, and exhausted. She had given her company, Princess Sweet, the best shot she had, spending the previous month at a mall kiosk selling her princess-themed products. But it wasn’t enough. Discouraged, Anderson put her idea away until a later time. Although temporarily sidetracked, she never gave up, and success ultimately found her in a new and surprising way the second time around with Startup Princess, an online resource for women business owners of which she is now the managing director. Anderson is one of many entrepreneurs who gave their hearts and souls to a project, only to have it fall far below their initial expectations. But like Anderson, many first time start-up business owners have not let a failure hold them back. They have chalked up the hours, tears and losses to experience, and gone forward to bigger and better things. So what is it that separates those people who eventually succeed from those who don’t? Anderson, along with Dave Ludlow, founder and CEO of Bullfrog Spas, and Jeremy Hanks, cofounder, chairman and president of Doba, share their thoughts and experiences to help other entrepreneurs make the most of a less-than-perfect experience. Defining Failure On overcoming disappointments, inventor Thomas Edison said, “I am not discouraged, because every wrong attempt discarded is another step forward.” An accurate and realistic definition of failure can help entrepreneurs understand what is going on with their lives and their dreams. Anderson doesn’t use the word “failure” when referring to her first business adventure. She prefers instead to call her experience a gift in recognizing that she needed to quit when she did. “I really had no risk and was not out a lot of money,” she says. “It could’ve been thousands of more dollars.” Hanks, who previously owned GearTrade, an online market that brings outdoor enthusiasts together to buy and sell gear, says that on the most basic level, failure can be defined as a business that ceased as a growing concern. “Failure is in the eye of the beholder,” he says. “Failure is a tricky thing to define. It is a very moving target of what it means to fail. At the end of the day, we actually succeeded. Some people from the outside may say you failed [when you know otherwise].” Expectations and Experience If failure, then, is more of a misnomer than an absolute description, why is it so painful when things don’t work out? Another important lesson Anderson, Ludlow and Hanks learned is to have realistic expectations. Like most first-time entrepreneurs, Hanks started his first business with high hopes, enough money and a winning idea. “We [had] that big global expectation: it is going to be a home run and everybody is going to love it and it’s going to be a big, significant venture,” he says. “It’s the expectation most entrepreneurs have.” For all their preparations, however, what Hanks and his partners lacked came down to one simple word: experience. “I think that was probably one of the biggest things that led to our not capturing our expectation,” he says. “The great irony of entrepreneurship is that experience is what is lacking. It’s painful for you and for your investors, [but] the only way you can do it, is to go out and try and most likely fail, and then you’ll get the experience.” Dave Ludlow invented, yet was unable to market, a highly effective aquarium filter, before founding Bullfrog Spas. He also advises others to learn from previous mistakes, and then apply that knowledge to the next business. “You learn some things to do, but more importantly, you learn things you shouldn’t do,” he says. “You can read books, you can talk to people, but when you experience it yourself, [you really learn it]. Learning by your mistakes is so important. If you learn once and [don’t repeat it] that’s a huge asset.” Ludlow also suggests that new business owners seek out the advice, experience and knowledge of other entrepreneurs, since he says learning from the mistakes of others is equally valuable to learning from your own. “Contact competitors that you’re friendly with, or find another business that’s similar, and get to know them, and learn from them,” says Ludlow. “It is so costly to learn from your mistakes. The more you can tap into your good relationships, you create a trust and a friendship and a bond.” Learning from Others Anderson’s first business was all about princess-themed parties, dress-up clothes and photo sessions where little girls could find their inner princess. Her motto was, “Make a Wish, Make it Happen.” When things didn’t work out, a friend and fellow entrepreneur, Paul Allen, advised her to start a blog about her experiences. There she could share her ups and downs, and learn from other entrepreneurs. It grew into much more than she could have ever imagined. While Anderson has not abandoned her initial Princess Sweet concept, instead of focusing on little girls’ dreams, she now uses the same motto to focus on giving women the tools and resources to make their dreams come true. Among those resources are “fairy godmothers,” women who have walked the entrepreneurial path and are willing to serve as mentors for others. “We now have 36 ‘fairy godmothers’ that write and speak for us at no cost,” says Anderson. “It is good for [women entrepreneurs] to see how they marketed their business, how they got their trademark.” Anderson also says she’s not afraid to share with others what she has learned, and that the benefit of such associations replaces competitiveness with cooperation. “We help women put their dreams into action,” she says. “We need mentors around us to be successful, and we need a community to help us. Any dream that is real needs [help].” Dave Ludlow has learned the benefits of building relationships with his competitors, which has brought about mutually beneficial results. “First I was so competitive; everyone else was the enemy because if I didn’t get the sale, they got it,” he says. “Doing that for a couple of years, I realized that this is not the best approach. When competitors fight each other, the industry doesn’t grow. I contacted CEOs and had long conversations, and when they share all that with you, that’s very powerful.” When Ludlow began Bullfrog Spas, he did not have much experience and had even less buying power. During the years, he has gone beyond talking with competitors to partnering with companies located in other parts of the world in order to get better deals on supplies. “If you went to a competitor and you both agreed to buy your products from the same supplier [then you can get a discount],” he says. “We have partnered with a big company that is our size in Australia, and they are very open, and then we joint purchase and use each other’s leverage. Then we have an advantage over the local or national [market]. Ludlow adds that the closer a business is to yours, the more valuable that is. “We’ll share things with them, and they share things with us. That cooperation is very important.” A Look Inside With all this advice, however, some say not everyone is cut out to start a business and Hanks agrees. “Lemonade stands? Those are the kids that are going to change the world,” says Hanks. “It’s already in their DNA; they are already hardwired to take those risks.” Hanks advises anyone thinking of opening a business to take a good, long look in the mirror to see if he or she is cut out for the challenges ahead; being an entrepreneur is all about stepping into the unknown. “I would look at how willing they have been throughout their life, how comfortable they are with unknown, how comfortable [they] are with risks,” he says. “If you like everything defined, that’s the wrong kind of person to go out and be an entrepreneur. You have to look at the world and create [solutions for every problem you see]. If you like unknowns and risk and like to do your own thing, everything is an opportunity, and there is no problem you can’t get around.” Hanks says some people might say that he is avoiding reality, but adds that entrepreneurs have to be a little in “la-la land” to get the start-up job done. “Yes, I am unrealistic. If I were realistic, I would go [get a job, work for someone else] and have them tell me what my reality is. It comes back to how do you see the world.” Moving On Although Anderson, Hanks and Ludlow each moved beyond one business to another, each built on their previous idea: Anderson’s focus shifted from little-girl dreams to a business of women’s dreams; Hanks switched from online inventory of outdoor equipment to an inventory-on-demand platform that links together retailers and suppliers; and Ludlow moved from aquarium filters to home spas. For Anderson, the similarity between her two businesses did not come as a surprise. “I think the seeds were planted for me to do this, and I just didn’t know it,” she says. “In mentoring women who may have had a not-so-positive business experience in the past, I ask, ‘What was the benefit of those hours, and tears and joys? You created something. There’s some satisfaction, some joy in that. Why was it so joyful? What was it that lit your fire, and how can you kindle that again and repackage it, or partner with someone else, or reevaluate it in a different way?’” For those individuals who are ready to move on to another industry, Anderson asks them to recall what was at the center of the motivation which prompted them to pursue a business in the first place. Answering that question for herself, Anderson discovered she’s a teacher and wants women to feel empowered in their life. “I am definitely a woman of action and create my own reality and don’t intend to stay with the same thing very long,” she says. “I was born and taught that all things are possible. It’s amazing that so many women don’t have that perspective. In our nature, women really want to believe that they can create their dreams.” In today’s shaky economic climate, Hanks’ last bit of advice may seem radical to some. He counsels those determined and prepared to make a go of the entrepreneurial life to “leap before you look.” “My biggest advice is if you think you want to dive into this world of trying to create something from nothing, you just have to do it,” he says. “The idea that I go get experience somewhere else is completely backwards; you’re never going to do it. The only way to learn how to be an entrepreneur is to do it.” “Don’t be afraid to fail,” adds Ludlow. “To be successful [you have to fail]. That is normal. Don’t give up. It’s all experience.”
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