I'm a strong believer in the concept of 'Learning by Doing'; the idea that "studying entrepreneurship without doing it is like studying the appreciation of music without listening to it", as Seth Godin so neatly summed it up.
A lot of my faith in this approach comes from how many valuable lessons I myself learned through launching my first venture - an event ticketing business - as an inexperienced 21 year-old student at Edinburgh University. I ended up running this part-time until, three years since selling our first ticket, we recently let our last virtual customer through the turnstiles and laid it to rest.
Looking back, do I consider it a failure? In many ways, no; we made a tiny £800 initial investment back many (a wonderfully vague term...) times over; we processed just over £1m of sales to over 21,000 customers, which I'm unashamedly proud of, and we like to think we made our clients' lives a little easier in the process.
Conversely, in many ways the answer is naturally yes - we never 'scaled' the way I hoped we might, we never developed the product to the all-conquering heights I had dreamed of, and despite the neat figure that is our total sales, some brutal margins dictate that I'm still a few (another wonderfully vague term) pennies short of that proverbial yacht I had my eye on.
But, whichever version of the story I ultimately end up settling on, I learned a huge amount from both what we did right and what we did wrong:
I began by writing out a list of features I wanted which, while I maintain would have made an awesome product, we'd probably still be building today. My co-founder, Alex, convinced me we needed approximately 5% of them to launch our MVP, so that's what we did. No, the UI wasn't beautiful; no, it wasn't the all-singing-all-dancing feature-rich behemoth I'd envisaged, but it proved to do everything our target clients and customers needed it to. Ultimately, we ended up barely iterating on it at all for the next 3 years.
Play to your strengths
Our business 'idea' really barely merited the name: give organisations a way to sell tickets to events. Not a new idea, far from an under-served market, and if I'd known what a 'Business Model Canvas' was back then, we'd probably have laughed ourselves out of the room before getting started. However, we secured our first customers by being able to approach groups that I had worked closely with before, ensuring: a) I knew exactly what the pain points were that we could solve; b) they trusted me on a personal level. Those two assets proved enough to get the first event online, and it grew organically from there. As we found when I tentatively reached out and was rebuffed by other Universities, we may well never have got started without that existing relationship / knowledge base.
The big guy doesn't always win
Once we'd proved our concept, we were amazed how quickly our client base grew. Edinburgh groups regularly chose our basic box office system over more established alternatives including the professional ticketing system which the University itself had licensed for a huge sum. Personal relationships, low overheads (ergo prices) and a better knowledge of what problems really needed solving seemed to do the job for customers at these early stages.
Let other people do the work
Once you have one end of a marketplace business in place, life can become blissfully easy. Despite not spending a single penny in three years on our own advertising, roughly £15k was spent by our clients on adverts pushing traffic directly towards our little website, not to mention organic social traffic which at its peak was generating us 150,000 Facebook impressions daily. If I had been more savvy at the time, we could easily have doubled our revenues if we had properly harnessed the advertising potential of those 'free' eyeballs. With time and cash at equal premiums, this type of business model proved a great way to gain quick traction.
Early on, we built a way to automate large parts of our process so that companies could take every step they needed to sell tickets without personal input from us. A large up-front investment of time, but it paid off multiple times over. Particularly if you're trying something out part-time and have ambitions of any kind of scale at all, automate whatever you possibly can!
...THE BAD AND THE UGLY
If you want something done right...
We used Google Checkout to process our payments for our first 18 months as it was the easiest to integrate into the back-end of our system. Its endless foibles caused numerous nightmares for customers, which - needless to say - became exclusively ours to solve. (Google, strangely, seemed disinterested). Things proceeded more smoothly once we switched system, and if we'd been more customer centric from the start we'd have made that decision much sooner. It was a painful lesson that a business is only as good as all its component parts; choose them wisely!
Jack of all trades, master of none
We devoted ludicrous amounts of early time to features that simply weren't relevant to our core business. It took us a costly six months to realise that if it didn't help a client sell or a customer buy a ticket, we should forget about it. Likewise, one of our biggest mistakes in hindsight was to offer an on-site physical ticketing solution; 92% of our up-front costs (& a similar proportion of the headaches) vs 5% of our total profits and not even a client "Must-have". If it's not 'business critical' be brutal in prioritising.
Make sure they can't love you but leave you
On the one occasion one of our clients left us, despite having sold thousands of tickets through us there was no compelling linked incentive for them to stick around. If we had ever scaled, we'd have been desperately vulnerable to any new competitor; we had opportunities to lock in both the clients (all the data we had on sales from previous events which could, if harnessed, have greatly enhanced future marketing efforts) and their customers (saved login / payment details, show preferences etc) but hadn't done either.
Scaling: the Holy Grail or a poisoned chalice?
The closest we came to scaling was ticketing a 3 week event in London. We saw this as our chance to make our name in a new market, and it just about paid off in the end - higher margins meant that three week project accounts for 35% of our total profits - but it almost crippled us. A successful business of any size means people are relying on you, and here we came closest to letting a client and their customers down; what was passable in a University market in Edinburgh (Google Checkout...) infuriated customers to the point we had to pull an all-nighter to make an emergency switch of system. Customers also expected quicker responses and better service than we could offer on a part-time venture. Looking while leaping was fine up to a point, but how close we came to landing on our faces on a concrete slab here was a painful reality check.
However, whether overall I end up deeming the venture good, bad or ugly, what's absolutely certain is how invaluable it was to learn these lessons in a real-world environment, further cementing my belief in "Learning By Doing", a mantra I was fortunate enough to be able to continue to embrace during my year with the New Entrepreneurs Foundation (for which, incidentally, applications are currently open via www.newentepreneursfoundation.com).
Ultimately, even if he wasn't commenting specifically on the learning methodologies of start-up culture, perhaps a dimunitive hero of mine put it best - "Do, or do not. There is no try".Suggest a correction