“What Was the Biggest Mistake You Made in Your Business?” Part 2

I had the great honour, on Tuesday of this week, of attending a class in entrepreneurship taught by Prof. Cammie Jaquays at Trent University in Peterbrough, Ontario.

Prof. Jaquays divided the students in her class into six groups, and each was assigned the task of reading my book, “Don’t Let Your Dream Business Turn into a Nightmare”, in conjunction with a book by Prof. John W. Mullins, entitled “The New Business Road Test”, and examining my entrepreneurial venture through the lens, if you will, of the “seven domains” road test for new businesses which Prof.Mullins outlines in his book.

The seven domains in Prof. Mullins’ model include two “Market domains”; market attractiveness as a whole, which is a “macro-level” evaluation of the market, and the “target segment benefits and attractiveness” of the proposed new business, which is a “micro-level” examination.

Similarly, there is a macro-level “Industry domain” - which refers to the attractiveness of the industry as a whole, and a micro-level Industry domain consideration, which is the “sustainable advantage” offered by the proposed new business in that particular industry.

In the “Team domain”, there are three areas of examination: 1) Mission, aspirations and propensity for risk 2) Connectedness up, down and across the value chain and 3) Ability to execute on Critical Success Factors.

As Prof. Mullins points out in his book, there is much that can go wrong in starting a new business venture, and almost any mistake - certainly a critical mistake - can doom the entire enterprise. Hence, the “road-test” is not a check list, and there is no “score card”. Achieving a “score” of 90 out of 100 would not be any guarantee of success, if the missing 10 points were in the “ability to execute on critical success factors”, for example.

Prof. Mullins’ book is a very informative and valuable guide for aspiring entrepreneurs who may be unaware of all of the factors that determine the success or failure of a new business -or the degree to which the odds are stacked against any new business succeeding - and the diligence with which the students in Prof. Jaquays’ class approached the assignment, and the insights which they came up with with respect to my business venture, were delightful, if not occasionally painful at the same time.

There are many mistakes which an entrepreneur can make - especially a first-time entrepreneur - and I certainly made a number of them.

But what was the biggest mistake that I made?

As Prof. Mullins states in his book, investors come in two categories - one is the “Three F’s” - friends, family and fools -and the other is professional investors.

In the case of my business venture, I would say that my investors were in the latter category, which is to say that they invested in my new business concept more out of a desire to make money, than out of a desire to help me, although there was a personal relationship with one of my two investors.

As Prof. Mullins points out, experienced investors know that most new businesses will fail. The statistics tell them that. Hence, they approach every plan for a new business with a hefty dose of scepticism.

Now, consider this: if you approach a basically skeptical investor with a business plan for a new venture which he already knows has a greater chance of failing than succeeding, how are you going to change that skepticism into an overwhelming passion and exuberance?

You might transform that skepticism into a grudging level of cautious optimism, but that is about it.

You are just not going to get your investors to feel as passionate and committed to your idea as you are, in my opinion, and, certainly, in my experience.

And so what happens when investors put up money for a business venture for which they do not have the same level of passion and commitment as the “visionary entrepeneur” whose idea it was to create the business - in other words, you?

“It is all too common for venture capital investors who like an opportunity to tire of the team they back and bring in a new one at the first sign of trouble.”

So writes Prof. Mullins.

And that is exactly what happened to me with The Men’s PowerSpa.

My investors, who never really believed in the concept of the business in the first place, eventually got tired of me and replaced me with - themselves.

Have a look at the website at http://www.themenspowerspa.com/ to see how they are doing.

It is March 12, and they are still promoting Valentine’s Day.

So, what was the biggest mistake I made in my business?

If you read my book and Prof. Mullins’ book, you may come up with your own answer.

But, as you can see, I have come up with mine.