Why Did My First Start-Up Fail?
In 2002, I unsuccessfully attempted to start a lifestyle magazine for Black golf enthusiasts called, Seven Under. To this day, when I mention the project to someone the response I usually get is, “that sounds like an interesting idea, why did it fail?”
Failed start-up logo
It took me several years to come up with the real answer to that question. The over-simplified answers are: 1) My partner and I lacked previous publishing experience; 2) We didn’t have enough money to have a real shot at success; 3) The timing was bad because Vanguarde Media, which, at that time, was a dominant player in the Black Magazine space, just filed for bankruptcy. And advertisers were luke warm to a new publication in the same category; and 4) We were ahead of our time with plans to launch a digital-only version of the magazine in a pre iPad-era. ENNN! (Loud buzzing sound!) While there is truth in all those answers, none of them is most true. The real reason the start-up failed is because I was too desperate.
What is Desperation?
Desperation is described many ways; here’s an interesting take on the subject.
Desperation is a necessary ingredient to learning anything, or creating anything. Period. If you ain’t desperate at some point, you ain’t interesting. – Jim Carrey
While Jim Carrey is funny, as usual, it’s this next quote that is more relevant to the failure of Seven Under.
Desperation is like stealing from the Mafia: you stand a good chance of attracting the wrong attention. – Douglas Horton
People can smell desperation a mile away and it causes them to run in the opposite direction, which, for me was clearly the wrong attention!
Why So Desperate?
I was a newly minted MBA from the Kenan-Flagler Business School at the University of North Carolina-Chapel Hill and I was ready to take on the world. I would be remiss as a good Tar Heel if I didn’t toss in the requisite chant of Go To Hell Dook! Ahem. I feel better now that I got that off my chest. But I digress.
So, while trying to get the magazine off the ground I worked part-time at a 9 hole golf facility in NJ, which paid an unsustainable wage. I took the job, however, because it gave me a chance to learn about the golf business and get to know industry insiders, plus I could meet with potential investors in Manhattan on my days off. After two years of pouring money into the business, earning very little income, and scores of potential investor rejections, desperation took hold, which, I’m convinced killed any chance of getting the money needed to launch the magazine. Investors could tell I was desperate and they wanted nothing to do with me or the magazine.
A Lil’ Fun Before #Fail
Working on the magazine start-up wasn’t all doom and gloom-I also had lots of fun. Like the time I appeared on ESPN’s Cold Pizza (Now canceled. Perhaps because of me? Hmmm…). Then there was the time my partner and I played golf with ESPN anchor, and fellow Tar Heel, Stuart Scott and his buddy at TPC Avenel (I think that was the course) and beat them for $20 each; the look on their faces was priceless when I hit a 6 iron close to the hole on a closing par 3!
Prototype Evolution
Here is a very early mockup of the prototype with Sir Charles on the cover:
Very early, crude magazine mock up
Through the help of an advisory board member, Barkley agreed to grace the cover of the first issue of the magazine once we launched, which obviously never happened.
Below is an autographed copy of the actual prototype, with Jason Kidd on the cover when he was the point guard of the NJ Nets (back when they were good 
) . We took 10 copies of the prototype for him to sign, he signed 7 and kept 3 for himself. Pretty kewl, huh?
Autographed Prototype With Jason Kidd
If you look closely, you’ll notice a spelling error (what? I’m not gonna point it out for you), which, 10 years later still chaps my hide because it somehow occurred after a final proof from the designer. Meh!
Key Takeaways
So what did I learn from the failed Seven Under start-up that I can apply to my latest start-up venture, WeMontage? A few things.
Most obviously, no matter how hard things seem, or how long it takes the developers to finish the website, I will never, ever, EVER, appear desperate; this will be key, naturally, once I begin trying to raise money post completion of the beta version of WeMontage.
Second, according to former Apple Evangelist, Guy Kawasaki, in his 2011 blog post: What I Learned From Steve Jobs (item #11), real CEOs ship! Hmmm, guess that means I wasn’t a real CEO when I tried to launch Seven Under. Ok. I accept that.
Despite the fact I want WeMontage to launch and be successful almost as much as I want to draw my next breath, you will never know it because…I’m not desperate. #NeverGiveUp
What lessons have you learned from your failed start-up endeavors? Please tell me in the comments area.
Suerte! (Good luck!)
My first fail taught me to never try a partnership, ever…no matter what. Always there is 1 partner that is fully invested and the other usually is not on the same wave-length…lesson learned.
Interesting insight. Fortunately, my partner was fully vested. But, I will post about this partnership issue at some point in the future. Thanks.
I remember those days when you were pitching Seven Under, the passion and the belief you had in it. I wonder though if the desperation didn’t work both ways. You might surely have come across as desperate but could it also be that you were pitching mostly to people who were desperate not to lose their money, desperate for a sure thing not an investment, i.e something fraught with risk ?
It was a combination of things. I spoke with those types of investors and others who were less risk averse.
publicaton, ouch!
You found it. Nice.
I learned on my first start-up, I didn’t like the industry I entered. I told myself (2 years into it) that if I don’t care about the industry I won’t do it. So, pushed myself to create a product in a industry I’m passionate about. Great article today.
Hey thanks! Great learning on your part.
Great article James, second times the charm.
I can chim in with Mark on this one. My first “business” I thought I was passionate about but for the wrong things (mainly money). Desperation is this intangible thing that almost anyone can “feel”, I had that too!
Hey Thanks, Brandon, for sharing that insight. Hope all is well.
I will echo Brian’s comment, both partners must be committed. My partner was not, but I knew that before we started, my bad
( . Great article
Hey thanks for the comment, Bill. And I totally agree.
Good read James. As long as I’ve known you, I never knew most of this and it’s really interesting. In terms of mistakes which cause failure, hopefully we only make mistakes which are nontermimal. Only time will tell since we’re just a year into R&D. Two lessons so far, it will cost more than you estimate (by multiples) and cash flowing with your own dough is painstakingly slow and nerve racking.
Amen! I didn’t know you were working on a new project. Let’s catch up offline and discuss. I’ll call you later today. Cheers!
Hi James – Well-written post! I looked at the cover 3 or 4 times and didn’t find the error in spite of my ability to find mistakes in almost all writing I come across!!! Hope all is well. Sue
Ha!! Look again. It’s easier to find than you think…
Of course, now that I know what it is, it’s easy to see.
Isn’t that how it always goes? Look forward to future posts. Here’s the ridiculous part: What do you call a beginning philosopher???
An Aristoddler…
Ha! Ridiculous, indeed!
James, I like your new bespokesolutionsllc.com website! Very nice! I enjoyed the story.
Hey, thanks, buddy!
still can’t find the type-o! maybe that’s why my start up failed….hmmmmm. Anyway, not having the funds to really “ship” was a major factor in the implosion of my last start-up. Time to retool!
No doubt! I’m not gonna tell you where the typo is.
James, great blog. Investors can sense and won’t fund desperation. Seven Under was a great idea before its time. It would be a great digital magazine in the current publishing environment.
I agree. Thanks for commenting, Leonard.