Near-Death: AND 1 and 300 “No’s”

“Success is going from failure to failure without losing your enthusiasm.” Abraham Lincoln

“Many are the plans in a person’s heart, but it is the LORD’s purpose that prevails.” Proverbs 19:21

We almost failed at least a half-a-dozen times. We faced hardships and lost people close to us. But, we survived, because we had each other’s backs. We weren’t always nice to each other, but we were, in the true sense of the word, a family.

I had a film school professor who always taught that for each project he ever had success on, he had to endure 300 hundred ‘no’s’ or rejections first. So, as long as he was out pitching people who could say yes, he was very happy to be getting ‘no’s’ as it meant he was on his way.

Take a second and re-read the failure timeline. We nearly ran out of money. Our first idea didn’t work and had to be thrown away. We argued.

Our first ‘big accounts’ never paid us. Our first ‘overseas’ apparel item was held in customs and instead of being delivered for the Christmas season didn’t arrive in the US until Spring.

Our next major apparel shipment was four months late due to a civil war in Bangladesh.

We had people lie to and cheat us.

Our first endorser — someone we had bet the company’s future on – twisted his ankle in the pre-season of his rookie year, and swore he’d never wear our shoes.

Our first shoe failed. Our second had to be recalled for a black lining that was ‘rejected’ in quality control, but which the factor snuck into the shoe anyway — and which then bled through onto the material.

We were sued by the Grandson of the adidas founder over copywright infringement.  We were sued by patent ‘trolls’ and people we trusted.

We couldn’t meet payroll.

Failure and near-death are facts of life for start-ups.

This is a rule that is definitely true for nearly all entrepreneurs. The best thing to do is to just get out there and keep asking and growing and learning — getting those no’s as quickly and intelligently as possible.

AND 1 faced many more challenges than just the above, but they are just some of the big ones, but we persevered.

So, does nearly every start-up.

You can find notes from a bunch of Y-combinator start-up founder talks that I’ve taken over the years here:

https://docs.google.com/document/d/1pq3hDWMLbVmPz70m8AfjHndkXzanFvIf9xQnl6Q5xXI/edit?usp=sharing

They were all hard.

Jawbone (a hardware manufacturer for IoT devices) had a very hard time raising any money. No one in the Valley would back any tech start-up. No suppliers wanted to help them build their technology. After three years, they won product of the year in Time, but their product launch bombed and they had no sales. They ran into the tech bubble and had their doors chained by their investors and had to lay everyone off. They had $60k in the bank and $600k in debt. But they took the company back, fought on and made some amazing products (with many more near-deaths later).

Group-on for example floundered for over a year trying to launch a company like indiegogo or kickstarter, before those companies existed. No one wanted to join — and they couldn’t get to scale. Had raised $5MM, but investors wanted their money back. The founder had the idea for the ‘daily deals’ model, but the team thought it was dumb, so he had to code the site himself in WordPress. Eventually, it took off and they became one of the fastest growing companies in history.

Reid Hoffman pitched Linked in to a bunch of his friends, and about 2/3rds thought it was dumb. They felt the network would have close to zero value until it surpassed 1 MM users and that made no sense. Reid liked that.

AirBnB couldn’t raise money, and their original idea of renting out air mattresses in your home felt like it was going nowhere, so they created Presidential Candidate cereal boxes to keep the lights on.

Ben Silverman at Pinterest failed on several business ideas over many years, before learning that he wasn’t that good at any one thing. Then, decided that he had to be 100% all in and ship any product as soon as there was one thing worth having in it. This is how Pinterest was born.

Cloudflare (over $180 MM raised now) struggled for a year to build the basic product, then invited in 10 friends. The site crashed for all 10. Then, they built round 2, and the same thing happened. In round 3, 8 of the 10 crashed.

Nearly everyone of these founders says that you have to want to work on this idea for at least 8–10 years. Many also say that the idea has to be big, challenging and hard enough to attract top talent.

One the traits that I hear (and respond to the most) is that you have to be trying to do something exciting enough for the best talent (or really top talent) in an area to want to work on it.

Another trait I hear, is that you have to be very, very stubborn in fighting for what you believe in — but also willing to ‘pivot’ if and when there is a better idea — that is a very hard challenge.

It is a very hard decision when to keep pushing forward and when to change your path, and often one of the most critical ones for an entrepreneur.

We did this at AND 1 — at least twice. Maybe we were very smart, maybe we were lucky — most likely we were a combination of the two.

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