Fail Conference 2012: Filip Maertens
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The document discusses lessons learned from a project failure. It describes how the company raised funds but still ran out of cash 20k short due to diversifying into too many business units and not securing enough funding. Key lessons included focusing on one thing, ensuring enough runway, hiring the right team, releasing at the right time, and not giving up in the face of failure or negativity. Though failure is difficult, the author stresses becoming fearless and passionate again by learning from mistakes.
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Fail Conference 2012: Filip Maertens
- 1. What do you want me to say ? There is life after failure. Filip Maertens @fmaertens
- 2. It sucks ! Seriously. It does. So let’s not glorify things here.
- 3. Project Fail Company Fail Intro Background Uh oh Lessons learned In recovery
- 4. February Acquired 27% of the shares of the company and started fundraising 2008 Got real cool VOIP tech and traction, e.g. AT&T EUR 250k debt trouble came with it May Raised EUR 500k with one angel investor 2008 Bought runway Bought too little November 3 revenue streams in excess of EUR 1,5M - 2 profitable, 1 launching 2008 Reduced from 11 revenue streams Still had 2 too many January Got EUR 12M in two acquisition offers 2009 Dude ! Seriously ? The offer is peanuts. Go fish ! Intro Background Uh oh Lessons learned In recovery
- 5. WTF happened here ? > 1,5M revenue, 12M M&A, good traction … and 20k short November May 2008 2009 Intro Background Uh oh Lessons learned In recovery
- 6. #1 Do one thing. And be awesome in it ! Diversification is high-level management bullsh*t. Focus first ! Growing one business is hard. Two is exponentially harder. I had 3 business units. 2 too many. Intro Background Uh oh Lessons learned In recovery
- 7. #2 Buy enough runway. Don’t underfund. Running out of cash before market-fit is textbook recipe for failure. Time your fundraising. Beggars can’t be choosers. Pivot or die. Always buffer. Don’t settle for anything less ! I required EUR 1,7M. Not EUR 500k. Intro Background Uh oh Lessons learned In recovery
- 8. #3 Only roll with the A-Team Hire Fast. Fire Fast. Pick investors that understand your business. Be intolerant for incompetence. Be brutal to ego’s. Be a lean team. Don’t get me started… Intro Background Uh oh Lessons learned In recovery
- 9. #4 Release when you feel confident. Done is better than perfect. Stay lean until growth, then accelerate. Don’t let anyone push to release too soon. Release stable versions. Released Zalloo too soon. Overhead and headaches. Intro Background Uh oh Lessons learned In recovery
- 10. #5 Never give up ! The founding team must show great passion and resilience. Push through negativity. Fight as if you’re on death ground. Original founding team was tired and gave up. Intro Background Uh oh Lessons learned In recovery
- 11. “ It always gets worse before it gets better ”
- 12. On 27.05.2009 I’ve learnt an important lesson: Lack of cash was never the problem. Lack of passion of the original Founders was. … and I didn’t see that one coming.
- 13. “ In the end everything will be OK If it’s not OK, you’re at the end yet. ”
- 14. The fallout… You become a toxic product to many. You failed = loser. Suck it up and deal with it. Rebound fast. Don’t isolate. Be a contrarian. Hack the Belgian mentality. Regain confidence. Do whatever it is you have to do. But do it fast. Intro Background Uh oh Lessons learned In recovery
- 15. On failure… It made me a more determined and seasoned entrepreneur. It made me fearless and gave me perspective. It made me tougher. Failure is a side effect of innovation. … yet, avoid if possible. You’re in Belgium: Petit pays. Petit esprit. Petit zizi. Intro Background Uh oh Lessons learned In recovery
- 16. Don’t let your fear of failure strip you from your passion Go big ! Be fearless ! Be passionate !
- 17. And me, 28 months later ? Financed VOIP Depot, profitable and growing Sold my niche cyber-security company Founded and financed my mobile start-up and awaited app Jini Happy to be free of fear and working on what I love ! Filip Maertens @fmaertens
Editor's Notes
- You’re here to build a company. You’re here to excel. You’re not here to accept mediocrity and “be mentality OK with failure”.
- There is a huge difference between a failed project and company going bust. I consider failing a project to be the kindergarten of failing, while going belly up with your company is a university degree with honors. There is a difference. People claiming to “get what it is” to fail while they never had to deal with lawyers, don’t know how it feels to lose a house, don’t know how it feels to work two jobs to pay off debts, don’t know how it feels to be fighting up against business partners that are lawyering up and friends that drop you like a brick… If you didn’t had to go through all this, you don’t get it. And that’s final.
- ANECDOTE 1: DIVERSIFICATION MEANS DOUBLE (OR TRIPLE) THE COST, THE EFFORT, THE SALES, THE PROBLEMS, ETC.ANECDOTE 1: HAVING LICENSE SALES (ZOIPER) + HAVING DISTRIBUTION MODEL (VOIPSOLUTIONS) + HAVING CALLING MINUTES (ZALLOO) => INSANE FINANCING REQUIREMENTS !ANECDOTE 2: HAVING EXTENSIVE FINANCIAL REPORTING => I SPEND ONE DAY ON PREPARING TWO-WEEKLY MGMT MEETING => EVEN HAD REVENUE RECOGNITION DEBATES… IN A FRIGGIN’ STARTUP !
- ANECDOTE 1: IF YOUR INVESTOR IS GOING FOR THE KILL DURING FUNDRAISING, YOU’RE IN FOR A TREAT WHEN THINGS GET REAL TOUGH !ANECDOTE 2: ESTIMATIONS ARE ALWAYS OFF. SOMETIMES WAY OFF ! 25% - 50% IS A SECURE BUFFER (EARLIER YOUR STAGE, THE MORE OFF YOU WILL BE). YOU DON’T HAVE ANY HISTORICAL DATA TO PREDICT !ANECDOTE 3: IF YOU’RE DOWN ON YOUR LUCK, IMMEDIATELY PIVOT IF YOU CAN, PUT STUFF ON THE BACKBURNER AND STOCK UP ON CASH AGAIN. ANTICIPATE SLOW PERIODS, OUTSOURCE SOME PEOPLE TO LOWER BURNRATE OR FIRE IF YOU HAVE NO OTHER OPTION. BUT MOST LIKELY THERE IS ALWAYS AN OPTION ANECDOTE 4: IF YOU ASK FOR ONE MILLION, YOU ASK FOR ONE MILLION. SOMETIMES NUMBERS GET ABSTRACT IN A NEGOTIATION. DON’T FALL FOR IT !
- ANECDOTE 1: SALES REP THAT WORKED 4 HOUR WORKDAYS, TOTALS COMPANY CAR AFTER TWO DAYS AND CLOSES NO DEALS AT ALL.ANECDOTE 2: INVESTOR ASKS TO TEMPORARILY SHUTDOWN A 40-PEOPLE STAFF R&D CENTER FOR TWO MONTHS. 40 PEOPLE R&D IS TOO MUCH !!! OVER MANAGEMENT !!!ANECDOTE 3: SUPPORT GUY YELLING AT THE PHONE.ANECDOTE 4: NEW CEO THAT PUBLICLY STATES HE DOESN’T KNOW FINANCIALS, BUT “THAT’S OK AS ACCOUNTANTS WILL DO THAT FOR HIM”.ANECDOTE 5: CTO WAS GOING SOLO, AND COO WAS GOING THROUGH SOME PERSONAL ISSUES.ANECDOTE 6: EMBARASSING THE COO IN FRONT OF NEW INVESTORS IS INSANELY STUPID. ONE VOICE IS REQUIRED !
- LESSON 5: DON’T RELEASE TOO SOON