Start small, start bad: Why it’s good to suck when you start a business
Ignore X Factor-style business TV, fail, learn and fail better – just like Nirvana – says entrepreneur James Benamor
Recently Nirvana’s Dave Grohl gave his opinion on TV shows like X Factor and the effect they were having on the music industry:
“…it’s destroying the next generation of musicians. Musicians should go to a yard sale and buy an old fucking drum set and get in a garage and just suck. And get their friends to come in and they’ll suck too. And then they’ll fucking start playing and they’ll have the best time they’ve ever had in their lives. That’s exactly what happened with Nirvana. Just a bunch of guys that had some shitty instruments and they got together and played some noisy-ass shit, and they became the biggest band in the world.”
That’s exactly how I feel about shows like The Apprentice and Dragons’ Den. Starting a great business has nothing to do with standing in line with hundreds of hopefuls, auditioning in front of a panel of ‘experts', presenting a perfect pitch. It’s not about having a billion dollar idea or getting backed by VCs. Successful start-ups don’t start out trying to become Google; even Google didn't start out trying to be Google.
When I started my first company, I was a teenager with a full-time job that I couldn't afford to give up and about £100 in cash. Advertising in the paper was too expensive so I printed up leaflets and went door-to-door delivering them early in the morning.
I did everything myself; from designing the logo, answering the phone, to setting up our first little database – and I sucked horribly at all of it. The first three products I tried failed and it was two years before I hit on something that people actually wanted.
During all that time, though, I didn't lose anything more than my time and I learnt more about our customers than any big marketing agency has been able to tell me since. Most importantly I didn't treat those failures as my ‘one big chance’. I had as many chances as I made for myself and because I didn't bet big (with my time or my money), failure was cheap.
Over the last 15 years our group has started 10 different companies and had hundreds of product ideas. Some have failed, some worked amazingly, and some were just OK. Looking back I never could have guessed which would do which in the first few months and some of them I was still wrong about three years in.
My career has been a huge list of failures punctuated by the occasional success. But somehow 17 years later we employ 300 very smart people, have over 100,000 customers and turn over around £80m a year.
My company isn’t the exception. Innocent smoothies founders tested their first recipes by opening a smoothie stand with a few crates of fruit and a blender at a weekend music festival before they gave up their day jobs.
John Walton was on such a tight budget when he opened the first Walmart that he chose the name based on how many letters he could afford for the sign. Whilst developing the electric light-bulb, Thomas Edison’s General Electric company famously found “10,000 ways that don't work” before hitting on the right design. Edison’s genius wasn't finding the right way; it was making failure cheap enough to do it 10,000 times.
It’s a strange thing for someone, whose business is all about lending money, to say – but borrow as little as you can. Keep your bets small until they pay off, then when you are sure things are working, grow.
Expect more than three quarters of the things you try to fail, not just the big ideas but the small things too. Remember that when something doesn't work you don’t have to do it again, but when something works you can repeat it for years.
Try, fail, learn, try again, fail better, and enjoy the journey.
James Benamor is the CEO and founder of Amigo Loans.