A successful entrepreneur shares her thoughts on business success and failure.

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New Year, New Business

Wrestling the alligator You may have wondered why I haven’t blogged in so long–until this week! The answer is pretty simple: 1Up Repairs exceeded all our expectations in terms of revenue and growth, and between that and learning how to be Mackenzie’s mom, I didn’t have time to really type out a blog post. We were running full-speed ahead just trying to keep up with unprecedented growth.

To give you some idea of how fast we grew, in 2013 we did $x in revenue, which was a solid “1-person business” number. In 2016, we did 20x our 2013 revenue!

By a large margin, 1Up Repairs is the most successful business I’ve ever bootstrapped, and I’m so proud to have helped breathe life into it and help it grow so quickly.

We have 9 fantastic employees now, 2 franchise investors (just signed our second one!), and we’re profitable. In 2017, we will turn a corner and start replicating what we have. All those systems we built over the last 2 years–now’s the time to put them into action and build more stores, hire more staff, etc.

My creative passion with growing businesses is in the first part–getting them off the ground. We decided together in November that with where 1Up Repairs was, and what I wanted to do, it didn’t make sense for me to continue full-time with 1Up. I’ll still help with getting more stores off the ground, but I really wanted to get back into marketing, blogging, and coaching full-time. With the business no longer needing as much of my specific skill set, I saw this as a good opportunity to step back into an owner/board member role instead of an active role running stores or building more stores.

All of this means that 2017 is the year of NEW for me. NEW is my #themeword for 2017 — a concept I came up with in 2008 and that has since gone viral. The goal is to come up with one word that you think will describe the next year for you–a “theme” for the year.

NEW means I get to work with other entrepreneurs and help them grow, transitioning from 2 straight years of building a bootstrapped business at a breakneck pace. John continues as the full-time CEO of 1Up Repairs, with new investors and new stores to build!

And as for me? I was surprised how much I missed coaching. I help people build scalable businesses. I can help with hiring employees, marketing/copywriting, conversion optimization (setting up a conversion funnel–something so many businesses need help with!) and deciding how to get capital to grow a business.

So many business owners think that what they need is capital, but often it’s about more effective allocation of resources. I learned a lot from John, who came from the restaurant industry, in this space. We went without some things that I’m not sure many businesses would dared to have done–like not spending a lot of money on storefront signs, for instance. That saved us about $6,000 at a time when we really needed it–and we poured that money into more accessories, more stock on phones so we always had parts to get most repairs done same day, etc. I consider myself frugal, but this was a whole new level!

But we made it without having to borrow very much money at all. Instead of sweating about paying off debt, we aggressively invested back in what was working. We tested conversions on marketing and shot down anything that didn’t make money, with the result that the marketing channels we do use are insanely profitable for us.

Making Marketing Work for You as a Business Owner

Many business owners will throw what I would term “feel-good money” at marketing–stuff that the people selling it would say benefits the community, or helps attract a certain demographic. We tested many of those marketing channels–ONCE. We tracked absolutely every call or customer that came in from those. (How? We had a few really good ways, I’ll say that!) If they didn’t pan out, when the salespeople called back, we’d give them the actual numbers and politely decline to continue to advertise. We left a trail of disappointed salespeople in our wake, but if I showed you our marketing spend vs. our sales, your eyes would probably bulge out of your head at how little we spend to make what we make.

That sort of tight, almost Scrooge-like mentality about spending made our stores profitable to the point where we had quite easy conversations with potential franchisees who wanted to come in. To be honest, it also resulted in some heated conversations about where our budget should go. John learned to relax a bit on small expenses, and to allocate more resources to test various marketing channels as revenue grew. I learned to make even tighter funnels and cross the boundary of being able to track conversions from multiple online and offline marketing channels, all the way through a diverse funnel (since we’re retail.) Considering the wide variety of ways people can find us and come in, the system we built does a pretty good job of tracking what works!

That’s what I’m most passionate about building for businesses. Whether your business is entirely online or a mix of online and retail like ours, most business owners are terrible at tracking where the money goes. And yet you have to be great at it, because it can be the difference between a business that barely stays afloat and one that throws off hundreds of thousands of dollars a year in profit to you!

In 2017, I’m ready to take some business owners with existing businesses and take them to new heights with their business. I’ll really dig in to find out what’s working and what’s most profitable for your business–and where you can put your dollars to maximize your revenue and profit. This is the #1 thing I wish I had as a business owner. I look back from where I am today, and how profitable this business is, and think “Wow, if I had this 13 years ago, I would have made an extra million dollars or three.” That is not hyperbole.

So many business owners are overwhelmed by options when it comes to marketing and sales. Facebook ads, Google ads, webinars, flyers, Facebook group posts…and to make matters worse, there are a million “gurus” out there that teach one of those methods as if it’s the holy grail. And it might be…for the person selling the program! But I see the need for business owners to have a marketing and growth coach to help you decide what’s most effective for your business, and then put a plan into place to track spending and verify what’s working through conversions. That’s where I come in.

Growing your business? I’m launching my coaching program under my freedom.biz domain name. I’m putting together an elite group of business owners who are interested in being part of a tight, supportive group of people committed to taking their businesses to the next level. If you’re interested, sign up here.

Just getting started? I’m also excited to recommend Ramit Sethi’s course on starting an online business. He helps you come up with the right idea and take your first steps to making money. I’ve known Ramit for many years and he practices what he preaches–these are the same techniques that helped him grow a multi-million dollar business. Sign up here for his free “Bucket List Challenge” and start building your own business!

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How Your Perfectionist Instinct Can Kill Perfectly Good Business Ideas

Back in May, I posted about the new direction I was taking this year, and my shiny new domain name, freedom.biz.

Then, although it wasn’t my intent, I went radio silent on this blog for over 3 months! What happened? Well, two surprising things…both good.

One, our business at 1Up Repairs took off more quickly and grew much faster than we had anticipated. We’ve currently 8x’ed our revenue year-over-year, which is way more revenue than we expected to do this soon. We even set sales records all summer, which we thought would be our slow period since we’re on a college campus and most students are off for the summer.

We’ve hired two new full-time employees just to help keep up, and are planning on hiring a third in January. We still have a lot of work to do on the marketing side, since John and I, until now, have basically been running the store while hiring and training people.

If this level of growth keeps up, next year we should do over a million dollars in sales — wow. That’s way more than we expected, but we are so grateful!

And then, of course, there’s one other thing I’m super grateful for — I’m pregnant!

My first trimester was rough — I won’t lie. I felt alternately nauseous and vomiting for weeks on end, and I was unable to work full time, which was frustrating, especially with our business growing so rapidly. My doctors assured me it would ease up by my second trimester, so by week 10-11 I was counting down the days.

By week 14, I was feeling “normal” again — more tired than usual, yes, but the nausea and vomiting had passed. The second trimester has been good, and I’ve been able to return to work, which mostly meant working 1Up Repairs’ front counter and maintaining my coworking space, Opportunity Space. Between those two businesses, plus the added tiredness, I haven’t been able to keep up with my blog as I’d have liked.

Difficulties Bring New Insights…

With every difficult period in our lives seems to come a new insight, though, and this has been no exception. Forced into not working full time, and worse, not knowing when or what would trigger my next bout of nausea, I started to deeply tap in to my body’s natural rhythms. Instead of just reading about time management and seeing which “techniques” I could apply, I lived and breathed for the moments where I felt “okay” enough to work. I developed a keen sense of understanding exactly when my best work hours were, and how to focus through even small amounts of time.

It hasn’t been perfect. There are still tasks that have sat on my to-do list for months. But overall, I’ve been able to work fewer hours and get more done — so much so, in fact, that I’m tempted to build my first course on freedom.biz not as a marketing course, but as a time management course — focused on learning to adapt to what your body has to say, and using your own natural rhythms and flows to get your to-do list done at optimal times, while feeling less overwhelmed and stressed.

I fear, though, that most people won’t want to hear this, because unfortunately I have a feeling their bodies are going to say the same thing mine did for the first few weeks: “Rest. Rest. Rest!”

The whole time management industry is devoted to this crazy “stacking” of to-do items into some sort of wizard-like pyramid, and then when it comes crashing down on you because you try to fit too much into it, it is, of course, your own fault for not grokking “the system” well enough. It reminds me a lot of the weight-loss industry, which is so focused on “Eat less; move more” or “Eat this, not that” that your body’s subtle cues are lost in a sea of screaming blog posts with 10-point checklists and pictures of ridiculously-too-fit people.

The message of listening to your body is incredibly important, but I have a self-conscious complex about it; I am simply not a paragon of crystal-clear, perfect time management myself. I have emails I haven’t responded to in weeks or months. Some days I don’t want to do anything (I’ve learned, by tapping into my body, that those aren’t “lazy” days for me; they’re my body telling me it’s overworked and I need to take some time for self-care instead of ignoring it and getting up and working. One of the hardest lessons I’ve ever had to learn in my whole life!)

My Unhealthy Perfectionist Instinct

In other words, I’m still learning, and I don’t feel worthy of teaching until I’ve learned more or become somehow “better” at it — my perfectionist instinct at its absolute worst, I admit.

Perhaps, though, it is more about the journey than the destination. Maybe I’m not meant to sit up here from on some sort of perfect, figured-it-all-out platform and dictate to you how to build a successful business, or how to manage your time. Maybe I’m meant to “teach from the trenches” and learn as I go.

Perhaps, as Brene Brown put it in her TED talk on vulnerability, this isn’t my time to “control” or “predict” time management, but just to roll with it and accept that I am not perfect at it, and that no one really is, but acknowledge that my stories about it and what I’ve learned are still important.

Is it possible I don’t need to be a paragon of time management to teach it; that I can be a normal human being with ADHD who forgets things and has 466 emails in her inbox (that’s the actual number, right now) and none of that actually matters when it comes down to teaching it? That it is, as Brene Brown puts it, I just have to believe that I am worthy of teaching it. Whatever it turns out to be — whether that’s time management or marketing or building a business.

Or heck, just writing and publishing a freaking blog post! My perfectionist instinct has killed several potentially great blog posts as well, that now sit in my Drafts folder (some with over 4000 words) instead of being shared with the world.

For The Cynics

I should add, here, for the cynics in the audience, that there are people out there who want to teach without having learned or lived what they teach. This is common in the “make money online” market — a market I’ve done my best to pull away from in the past few years. People make a bit of money online and they suddenly have some sort of “epiphany” (often guided by someone else who has made just a bit more money than they have) that the Next Great Thing they can do is teach other people how to make their first $400 online, or whatever thing they’ve just done for the first time. At the worst, there are those who haven’t made any money online and are still trying to teach others how to make money online.

Taking that situation and adding belief of worthiness doesn’t create value. That’s not what I’m talking about here when it comes to my situation. I’m not naively jumping in and saying “I know nothing about this and have never done it; let me teach it anyway!”

What I am saying is that the time management industry is broken; I believe I’ve developed some tools that will help solve it for some (not all) people, and I need to have the confidence in myself to launch that (or failing that, launch something I know I can teach) even if it’s not perfect.

I am the other extreme from the not-so-hypothetical “make money online person who has never made any money online” I outlined above; I have built multiple successful businesses, but time management still feels frustratingly out of grasp for me, and I believe that’s because the industry and the courses in it focus on the wrong things.

There are those who don’t know anything and try to teach it anyway, and most of them fail (although they often get a great learning experience in the process.) There is a large “happy middle” of people who have the self-confidence to teach, backed by experience, and many of them succeed. Then there is a small group of people who lack the self-confidence and are so hemmed in by perfectionism that even though they are perfectly capable of teaching a particular way of doing things, they never even attempt it because they are consumed by the fear of not knowing enough or of needing to know some nebulous “more” before they teach it.

I am in the latter group, unfortunately, and that’s why I’ve consistently struggled to launch products and even write blog posts. My statement on the matter has always been “This will change.” Now I’m saying “This is changing.” I do believe I am ready to teach what I know–now, I just have to get out of my own perfectionist loops long enough to do so.

This will be a great thing to show my daughter as she grows up, as well. ๐Ÿ™‚

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My Stake in the Ground: What I’m Building This Year

Local business It’s been just over a year since my last company failed/got acquired, and I’m excited to announce the project I’m going to be working on for the foreseeable future!

I’ve long been frustrated by the state of marketing information for small businesses. It’s what led me to start my last company, and, today, a bit more than year after that company failed, I still get the strongest sense that that’s where I want to be as a founder and CEO. What’s out there now stinks!

Small Business Owners’ Issues with Marketing

In talking to small business owners, two big issues regarding marketing come up consistently:

1) “I have no time to do any of this.” What I see here that has huge potential: A system that makes intelligent recommendations for you and then offers you the choice to do that or hire it out to a trusted provider for a fee. We can also show you how much time each item is going to take to do.

2) “I don’t know what will give me the highest ROI.” What we can do here: Use intelligent recommendations to give you the highest-leverage items to do first. For instance, if you don’t have a website with a title optimized for your SEO keywords, we’d highlight that first, as opposed to–say–adding ALT tags to your images, which is going to be a lower-value item.

I still don’t know why this doesn’t exist. It’s where we were headed previously with Whoosh Traffic as we pivoted into MarketVibe.

My best guess on why it isn’t out there today is that small businesses are notoriously hard to gather as customers, and they don’t like to pay a lot of money for marketing. Still, HubSpot seems to be doing well (they currently claim 15,000+ paying customers on their homepage), and email marketing companies like MailChimp and Aweber are also thriving.

Going Back to Where My Heart Is

When we went for this out of Techstars a year and a half ago, I got dissuaded from the small business market and I lost my focus. That was my failing–as CEO, I should have stuck to my guns and said, “Look, this is our market!” I’ve always felt most passionate about serving that market. It’s hard when you are told by investors and mentors over and over that it’s difficult to build for that market. I think they’re right–it is hard–but I should have done it anyway, because it’s where my heart is.

The other big mistake I made was focusing on the software first. This time, I’m going to build it totally differently. I’m going to build it as education first, and then gradually work my way into the software/intelligent recommendations side.

Who I’m Looking For as Beta Testers

I’m looking for Real Business Owners (small businesses with a physical presence–this could be anyone from people who have a retail store, like John, to people who are personal trainers, coaches, or massage therapists), and build a course that shows them how to market their products or services effectively.

I’ll walk through what John and I have done to grow his business from a “pocket change” business generating less than $2,000/month to a powerhouse that is on track to generate over a quarter of a million dollars in revenue this year. By the way, we’ve done that in 6 months and we’ve spent less than $2,000 on marketing. And we have an ugly-ass website. It is possible!

This is what I most want to do. This is my stake in the ground. I’m tired of people telling me that I shouldn’t work with small business owners because they are difficult and frugal. Great! I am also difficult and frugal. ๐Ÿ˜‰ I think we’ll be just fine.

Today, I’m announcing the acquisition of the domain name freedom.biz, where I’ll be building my new course for Real Business Owners. My goal is to launch the first iteration of the course by the end of June, and build a fantastic community of awesome business owners. For this first iteration, Freedom.Biz will be training on how to get more customers for a real (physical) business. Then, based on your feedback, I’ll build software, help you find done-for-you services that work, and continue adding to the course and community!

Are you a coach, consultant, store owner, or Real Business Owner who’s interested in being a beta tester for Freedom.Biz? I’d love to have you on board as a beta tester. Sign up here and I’ll keep you in the loop!

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The Real Reason Why 80%+ of Funded Startups Fail

A friend confessed to me the other night that his funded startup had failed.

“It was growing,” he said. “We were getting customers. We just weren’t getting them fast enough to continue getting funding.”

This is a familiar refrain with startup founders, and I personally know several founders whose businesses fit this bill (including my last funded company.) They have a business that works, with customers. It just doesn’t fit the ridiculous growth profile that most VC’s (venture capitalists) expect.

That’s the untold story of the estimated 80%+ of funded startups that fail. Most of them don’t fail because of a complete lack of acquiring customers. They fail because they stepped on the funding treadmill and hired ahead of revenue for anticipated growth–and that growth either didn’t happen, or didn’t happen fast enough.

Fab.com — From Billion Dollar Valuation to Bust

Perhaps nowhere is this more obvious than in the painful story of Fab.com, the e-commerce startup that raised over $330 million and then sold for a comparatively paltry sum ($15-50 million, is the estimate.) In the story of Fab.com’s death, these quotes stand out:
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Week 5: What Do You Really Want to Do With Your Life?

I haven’t posted in a few weeks, though, as you’re about to find out, I have a really good reason for that! Also in this post, I share with you a (somewhat embarrassing) story about how I figured out what I really wanted to do most in my life.

My boyfriend, John, owns a retail store called 1Up Repairs. He fixes cell phones, Xboxes, PS3s, and computers for a living. I’ve been helping him out with it for the past few weeks, and it’s been an eye-opening experience, as you’re about to find out.

For the entire time I’ve known John, his store has been located in a rather industrial, seedy part of town. It made sense to him when he started — he wasn’t sure the idea would work, so he wanted the cheapest rent possible while he tested it.

I helped him review his financials, and was impressed by the amount of business he was doing despite being located in a bad area of town. He had built up a steady stream of loyal customers, with over 40 positive reviews on Yelp and Google (and 0 negative reviews!)

John had realistically hit the limit of the number of people who were willing to drive to his side of town to get their cell phone fixed, and needed to secure a better location in order to grow. In December, we entered talks to secure a location right across from the University of Texas-Austin campus. There was a real dearth of cell phone repair shops there, and with the combination of college students without cars and a large amount of foot traffic, I thought the location was a winner.

It took us two months of negotiations to finally sign the lease; we moved in February 1:

1Up Repairs
John and I in front of our store, 1Up Repairs, during opening week.

I’ve learned a huge amount since I helped him move in here. One thing I’ve never done before is retail. I worked in a restaurant when I was 15, but I also found a work-from-home job doing SEO (search engine optimization) that year. By the time I was 16 and could drive, I had secured a job doing web development for a design firm.

That was in 1998, and I’ve been in web dev, marketing consulting, and running tech companies ever since. Retail, as anyone who’s worked in it or run a retail store will tell you, is an entirely different beast from the type of entrepreneurship I’m accustomed to.

At the end of the day, any business comes down to serving your customers, and that’s what John does well. Great customer service wins the day no matter what business you’re running. I learned that running my hosting company — we only had one negative review in the entire 6 years I ran that business. I applied that philosophy here and found myself happily serving customers in a retail environment, fixing computers, running the register, and answering all sorts of random technical questions. (Actual question I got today: “I want to get an iPhone, but I can’t take the battery out, and the government is going to track me if I leave it in. Can you rig an iPhone so I can take the battery out?” Yep, welcome to retail!)

I was surprised to find out I enjoyed helping John with his retail store. John and I share a passion for making sure the customer is happy first and foremost. We’re also both driven and motivated workers, so we work well together. That’s not to say we don’t ever fight — we both have years of experience running businesses, and we’re both smart, opinionated and stubborn, so we’ll verbally spar on occasion. But over time, we’ll balance back out into remembering why we’re here (to serve customers and make them happy), and we’ll make the decision that best serves our customers.

An Embarrassing Story Serves as a Catalyst

I promised you with this post that I’d share how to find out what you really want to do with your life. The best way to do that is with a story from my personal life. Even though that story is a bit embarrassing, I’ll share it with you anyway, because it has a good lesson in it. Here goes:

Last year, I was on a plane headed from LA to Austin on Southwest. I hate being stuck in the back of the plane, so I always buy the “automatic check-in” upgrade so I can board first.

I got on the plane and sat right at the front — yay! Next to me was a guy in a suit who was reading on his phone. When I sat down, we picked up a casual conversation. He revealed that he was an investment banker, and was scouting for series B or later-stage startups to invest in.

He asked me what I did, and I said “I’m a startup founder.” The words were barely out of mouth when my brain turned on me. “Your company failed a few months ago!” it said. “What are you doing?

The words had come out of my mouth before I had a chance to think about them at all. I knew that the startups he invested in were way later-stage than mine had been, so I wasn’t trying to “make an impression” on him.

The conversation eventually trailed off as we got in the air, giving me ample time to think about why I had said that when my startup didn’t exist any more. And then it hit me, with a gigantic THUD:

Running a startup was what I most wanted to do!

I had said I was a startup founder because that’s what I wanted to be. That’s what I was, but mine failed. And right then I knew I was going to try it again, that I wasn’t going to be a coach forever, that I was happy I’d tried some other things like coaching and consulting, but that being a founder was where I was going to be happiest.

A feeling of relief swept over me like a tidal wave then. Now, I want you to think about what you’d really say to someone in a completely unedited, spur-of-the-moment manner when they ask you what you do. What would you say there?

Stop editing yourself. Release all your fears and all that junk that’s built up around that question and just answer it with a free conscience. What do you do?

What do you do?

I’m a startup founder. Nice to meet you.

The Business Idea We’re Pursuing

As we were negotiating our new office in December, John told me about a product idea he had, based on running his own store, that we can sell to other retailers. (And no, it’s not a point-of-sale system–but it’s another thing all retailers need!)

I talked the business idea over with some people I trusted, and I received an unbelievably positive response. I’ll be honest — it’s a way more positive response than I ever got around the marketing software we sold with my last company! So I told John I’d build a prototype.

I’ll be sharing more about this idea soon. It’s patentable, so John’s asked me to keep it under wraps while we work with a patent attorney to secure provisional patents on it. Once we’re able to secure our intellectual property (patents and trademarks) and to build a prototype, I’ll share in detail what we’re building and why.

In the meantime, I’m running a retail store with John.

Why Not Just Hire Someone?

There’s a story that’s stuck with me for nearly a year now. Last year, at the Female Founders Conference hosted by Y Combinator, Adora Cheung of Homejoy got up on stage. Homejoy is a cleaning company, and for several months, Adora worked as a janitor, commuting insane hours to clean for a pittance while continuing to build Homejoy on the side. Why would she do this? She felt strongly she needed to understand the business inside and out in order to build a business in that space.

I didn’t set out with the intention to run a retail store. Other people (and maybe even the “me” of a few years ago!) might say it’s a waste of time to be answering phones, manning a counter, handling a cash drawer and credit cards, and answering questions about broken phone screens all day, when we could easily hire someone to do the same. But if I’m going to start a company that sells product to retailers, what better experience could I ask for than actually running a retail store? The empathy I’ll gain for our customers is massive. I’ll understand them in a way I never could have before.

So, to Adora and all the other startup founders who took a leap off a cliff and dove enthusiastically into low-paying jobs to better understand their customers, this one’s for you.

I’d better get back to work. I’m sure there will be a customer coming in soon!

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I'm Erica Douglass.
After selling my online business at age 26 for over $1 million, I created this blog to help you grow your own business quickly.

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