5 Business Lessons 2015 Taught Me
The first two years of Nic Harry (a daring luxury online sock company) we bootstrapped and built the business in the traditional way (sales). When we had gathered enough traction and proof of concept I decided that it was time to raise money to push our business to the next level and to do it quickly.
Initially I had rallied a group of about 15 angel investors, a mix of friends and high wealth individuals, who had each committed a certain amount of money.
After trying to coordinate all of these people I decided that I needed to focus on the business and not managing 15 investors. So I stopped and took some time to plan my fund raise.
When I saw this tweet from Joel (Buffer Co-founder) with their number of investors, I nearly fell off my chair:
I ended up raising a round of funding from two investors that I vetted and selected for the different things they, as partners, could add to my business.
I can’t emphasise enough how these two investors have shaped, grown and helped my business in the past ten months. Yes it’s early days still but so fair, raising partners and not cash has been an important step for the business.
Strong Opinions, Weakly Held*
It’s easy to make a statement, turn it into an opinion and then hang onto that for dear life and hope for the best. This year I learned that it’s a bad idea to cling onto opinions when the facts change.
When we started NicHarry.com we had mid to long term plans to open up brick and mortar stores. This was only going to be a few years into a successful ecommerce strategy. It seemed like something interesting and fun to experiment with.
I then realised that ecommerce in South Africa was taking longer than anticipated to really boom.
One day I was walking down one of the high streets in Cape Town with a friend of mine and we stopped for coffee in a building that his friend owned. Said friend came in and told us how the tiny store next door had just become available.
I had a good feeling about the street, the store and the strategy so within a few days I had signed a lease and was planning on moving Nic Harry into our first store.
I had sworn that NicHarry.com would be our main focus for a while to come and that ecommerce was the way and the light. The truth is somewhere between ecommerce and real-world retail and now we’re ploughing ahead with our second and third stores while we grow the NicHarry.com presence.
Sometimes it’s good to hold strong opinions in the face of doubt and relentlessly defend them. Other times it pays to be nimble with your movements as well as the decisions you make when the facts around you change.
Hold strong opinions weakly or they might sink you.
*The origins of this quote are disputed but here’s the best I could find from Bob Sutton.
Plan Long Term, Hustle Short Term
Well funded businesses can be picky about where and how they generate revenue. Facebook is a good example of this. They held out for the right revenue models to emerge. In every business there is a right and a wrong revenue stream.
Some revenue streams will drain resources and increases turnover but lead to no profit. It makes you feel good but does nothing for your business well-being.
Sometimes the right revenue models can be months or years away from valuable or even viable and you have to hustle the wrong revenue to build towards the right revenue.
This year we decided to push into two distinct revenue models with Nic Harry that we didn’t particular see as core but helped us survive and thrive in the short term.
Our long term strategy remains the same and we’re committed to seeing it thrive but this year we needed a lot of month to month short term hustle to keep the cash coming in, salaries paid up and the socks rolling in (and out) the door.
A Quick Decisions is Better Than No Decision
At some point in the year I was lucky to be interviewed on a radio show here in Cape Town. Traditional media exposure actually worked wonders for our online and offline retail presence.
So I decided to spend money on producing a radio advert to flight for a month building towards the holiday period. The decision was quick and we ploughed into production and securing the airtime.
That decision turned out to be a risky one but a very valuable one. We didn’t make direct revenue to compensate for the cost of the advert but I learned what does and doesn’t work when trying to drive people to the store or to the website.
If I had um’d and ah’d about it we would have saved the money but learned nothing.
If you go along aimlessly waiting for the right decision to present itself you probably wont make any decisions ever. If you commit to a decision, go at full steam ahead and are willing to fail, then a bad decision is ultimately better than no decision.
I’ve never seen indecision build a business.
Ignore Almost Every Opinion Anyone Has, Ever.
Everyone has an opinion about your business. I’ve had people ask me if I’ve considered doing a sock made from xyz fiber. I’ve had people ask me if I have considered selling a knee-high sock, women’s socks, baby socks, children’s socks, socks for sports and every sock in between.
The short answer is “Yes”.
Yes, I’ve thought of it. This is what I do for a living, of course I’ve thought of it. I’m always thinking of it. It’s all I fucking do. Think, think, think, build, build, think, build, fail, try, build, think. It’s non-fucking-stop.
I’ve also had investors opine about certain parts of the business that they don’t really grasp. The phrase they always use is that they are “nowhere near the coalface” so it’s up to me to decide.
That’s the truth.
Like good partners should, my investors generally trust my knowldedge of the business and industry.
My team and I are the ones deep in it every day so the chances are we have a good sense for what will and wont work most of the time.
I trust very few people and their opinions and most of the time, I’ll listen to them and ignore it anyway.
If you have a great grasp of the high-level strategy that you have laid out then you should trust your gut and stick to your opinions. Ignore the opinions of people who have never taken the time to understand what you do and how you do it.
There were many more things that I learned throughout the year but these few lessons stood out more than most.