A personal and hard-earned lesson in business from MVF Entrepreneur-In-Residence, Des Fitzgerald.
There is validity to the notion that starting one’s first business with a failure sets a person up for a more sensible view on decision making down the road. While I was fortunate enough to find success in my first business, my second venture did not fare so well.
While still running my first company, I was traveling for work and sat next to a friend from my hometown on a long flight to the west coast. We each began talking about a business concept that we had independently thought of that overlapped in what only could be considered some kind of cosmic alignment. Given that astounding conjunction of our similar thinking, this had to be an idea of real merit. We spent hours on the flight wrapped in a conversation about this transformative concept that employed new emerging technology with what we perceived to be an enduring need.
I initially didn’t act upon our discussion, instead returning my focus to my first business. Over the next few years however, my friend more actively followed up on our original idea, going on to test a variation of our concept with some success.
It wasn’t until ten years after our that initial conversion on that flight to the west coast, that we both committed ourselves to the original idea. I had by that time sold my company and was looking for something else to latch onto and the timing seemed right to start a new business together. I remember thinking very clearly that any idea that could persist for both of us for the better part of a decade must have lasting value. It must be worth the time and money to execute. I was fully head over heels in love with our original concept and oblivious to the passage of time or the preponderance of evidence questioning this business proposition.
That love-struck notion that imbued this idea with value without the discipline of due diligence was in retrospect foolish of me. Not only had the intervening 10 years changed the technological landscape within which this idea needed to function, but I knew no more about the industry than I did when I first conceived of it. I trusted my partner to cover that side of the equation while he trusted me to bring a sober business mind to the proposition. Both of us were blinded by our passion for this long held idea.
Our passion for the idea propelled us blindly ahead. My friend and I started the company, invested not only our own time and money, but also the money of friends and family.
The end of this story came far too quickly, as we were out of business within a year and a half. My first business success was now tarnished with a second dramatic failure. Our original idea, that had stood the test of time but not the realities of the market, ended ingloriously.
For me the lesson going forward in my work with Maine Venture Fund was and is to test all major hypotheses and business models. There is no substitute for airing your ideas with those you trust and who don’t share the same emotional investment that you may have.