Bill Murray runs through the snow in a scene from the film ‘Groundhog Day’, 1993. (Photo by Columbia … [+]
Groundhog Day makes me think not of the superstition that our late-winter weather patterns will be determined by whether a hibernating rodent emerges from its burrow on Feb. 2 and sees its shadow or not. Instead, I think about Phil Connors in the movie Groundhog Day. Phil, a TV weatherman played by Bill Murray, is sent to Punxsutawney, Pennsylvania, to cover a Groundhog Day event and gets stuck repeating the same day over and over until he finds a way to make it work to his advantage.
Entrepreneurs and business leaders may not relive the same day as literally as the fictional Phil Connors, but repeating a mistake can certainly feel like an unfortunate case of déjà vu. Most successful entrepreneurs are bound to have lost some time or money due to a business misstep at some point—making mistakes is part of the package. The key to success lies in learning from the mistakes you make.
Want to avoid living your own business version of Groundhog Day? Then read on to see what I learned when I connected with entrepreneurs and business leaders about errors they’ve made and what they do to avoid repeating them.
1. Viktor Kim, Project Manager, Risk Manager and Operations Manager, Golder
When Viktor Kim and his partners launched their company 14 years ago, they made one critical mistake: underestimating the importance of legal aspects of the business. “We hired a broker who did all state registration work for our company, but we personally never had a chance to read carefully the laws and the state instructions that govern the company establishment process in our country,” Kim recalls. Nor did the partners delve into their company’s charter to thoroughly understand and clarify their roles and responsibilities as owners. The result? A more frustrating, lengthy and costly process when they closed the company many years later.
Entrepreneurs who wish to avoid this mistake in their own ventures would do well to heed Kim’s advice: “Even if you decide to hire the broker or the lawyer to manage the legal aspects of the work, devote a few hours to getting familiar with current legislation. Take your time to critically read the laws and regulations related to company establishment and the management process, the mechanism of how your company board will function, what types of licenses are mandatory for your business and what you would do if you decide to close or quit the business.” Research platforms like LexisNexis or the National Conference of State Legislatures bill-tracking databases can keep you abreast of legislative and regulatory developments. Subscribing to legislative email alerts is another way to stay in the know.
2. Marco Scognamiglio, Global CEO, RAPP
Countless business leaders have, at one point or another, made the mistake of hiring the wrong person. During his more than 30 years in the marketing and advertising industry, Marco Scognamiglio has made some great hires, but admits he’s made some mistakes in this area as well. “Not because they weren’t talented, but simply because they either weren’t a good cultural fit, or because their skill set didn’t properly align to the craft,” he explains. “And I didn’t always take the time I should have to assess that adequately.” Now he recognizes how imperative it is to be purposeful in hiring—thinking through what the role needs as well as what the team needs.
“Your heart sinks when you get it wrong. Well, at least for me it does,” he says. “Advertising and marketing, as I see it, are businesses in which organizations make it—or break it—based on the talent they bring into the fold.” To avoid hiring missteps in the future, he’s implemented some ground rules for himself and his leadership team. First: Ensure all hiring parties are clear about the skills, experience and aptitude needed for a specific role. Second: Task a small, well-cast group with interviewing candidates. Third: Keep interview discussions on point. “It’s key that experts of our craft assess if the candidate can make a tangible contribution to solving our clients’ challenges and opportunities, while also being able to credibly and genuinely inspire our teams and contribute to our culture,” Scognamiglio says.
3. Farah Jassawalla, Founder and CEO, Wordsmiths
There is a correlation between the worth you attach to your business and the investment you’ve made into it. Farah Jassawalla says she learned this through the biggest mistake she’s made in business: not investing in her own brand. “It is imperative to invest what you earn (and can allocate to your business) back into educating yourself on how to build and grow your business or learn about the niche in which you’re aiming to specialize,” she observes. Now Jassawalla allocates a monthly budget to online courses, subscriptions, and efficiency-boosting applications.
Your investment into your business shouldn’t just be monetary. Jassawalla encourages other entrepreneurs to embrace continued self-education. “There is no lack of resources that can be used—both free and paid—on the internet today. Nearly every kind of skill—especially if you’re carving a career in the digital space—can be learned, developed, perfected, and monetized,” she says.
4. Steve Randazzo, President, Pro Motion
Steve Randazzo’s mistake came when his business was in a growth period. As he recounts, “Because of adding staff and travel and new expenses to show our new clients how awesome we are to work with, I took my eye off the most important metric when running a company: cash.” Randazzo describes the company’s growth and revenue forecast at that time as “amazing,” but the team wasn’t paying close enough attention to accounts receivable. Randazzo notes that when a company gets a new client, the administrative process of getting the first invoice paid can take anywhere from 60 to 90 days or longer. “Disbelief is the best emotion I can recall. How can this happen if our billings just went north of the stratosphere?” he remembers asking himself.
To fix the immediate problem, Randazzo and his team worked to shorten the AR days of all new clients. Then they added questions to the onboarding process about how money flows through the client’s organization and how long it takes to add an agency partner to their system. He encourages entrepreneurs to learn from his mistake and recognize that cash is more important than profit. “If you don’t have cash, you can’t pay the bills—it is that simple,” Randazzo says. “And every company, especially an entrepreneurial one, needs to build toward a ‘rainy day’ fund or have several months’ cash flow saved up for when times get tough and when times get great!”
5. Ash Rust, Managing Partner, Sterling Road
When Ash Rust was anxious to sustain growth at a prior company, SendHub, he pushed the team to add voice features to the company’s texting platform. His colleagues wanted to focus on solely messaging—and they ended up being right. “It was a slow burner. Initially, our growth spiked, but over time it became harder and harder to support the diverging needs of two different products,” Rust recalls. “Plus, we were now working at the bleeding edge of technology around VoIP (Voice over Internet Protocol), and that meant hiring expensive engineers to work on that problem alone.”
After spending two years trying to make voice features work, the company refocused its resources on messaging. That’s when it saw success. Now as an investor, Rust says he pushes startups to focus on their “killer feature” before expanding their offerings. He says that focus works, pointing to how long Instagram waited to launch video and how long Spotify waited to offer podcasts as proof. To maintain focus on a single feature, Rust recommends basing your priorities on increasing a customer engagement metric. That will help you keep your eye on the right prize.
6. Dhar Mann, CEO, LiveGlam Inc.
Dhar Mann’s biggest business mistake was—almost—giving up too soon. When he started creating motivational content, his videos weren’t attracting many eyes. “My highest-viewed video didn’t even break 1,000 views. After months of sacrificing sleep, time and money, I got so discouraged that I decided to give up and throw in the towel,” Mann remembers. Before bed one night, he scheduled his last video to go live the next morning. He woke up the next day to his girlfriend shouting that his video had gone viral.
The video broke 100 million views, and in the past year, Mann’s videos have received more than 3.5 billion views on social media. “I’m so grateful where I am today, but I can’t help but wonder, what if I had given up before posting that video? My entire life would be so different,” he says. “So my No. 1 advice to anyone with a goal or a dream out there is to keep going.”
7. Neil Gordon, Founder, Neil Gordon Consulting Inc.
Neil Gordon hired a marketing firm recently, but it fell short in many ways. “They spent $3,300 in Google Ads without tracking the main conversion event, which was the sale of one of my digital products. Thus, it was impossible to determine what, if anything, was leading to sales,” Gordon notes. Gordon says his mistake in choosing that firm resulted from signing the contract before speaking with the employees who would be handling his account.
“The executive with whom I spoke was engaged, asked meaningful questions and seemed to be a creative thinker,” he remembers. “I assumed the team would exhibit those qualities as well. But the people who worked with me were completely inflexible about their collaboration with me and didn’t seem capable of doing anything other than their standard 12-week process.” When he approached another marketing firm, he avoided making the same mistake by asking to speak to the team member who would be working on his account if he signed. He learned that the available team member worked mostly with mid-market businesses with structured marketing departments rather than primary stakeholders like himself. Gordon saved himself time and money by discovering up front that the firm wasn’t a good fit for his needs.
8. Nikki Bruno, Founder, The Epic Comeback
Nikki Bruno believes her biggest business mistake was defining and marketing her business too broadly. “I developed a framework called The Epic Comeback Journey as the basis for my coaching and mentoring program,” she says, conceiving it as “a pathway toward staging a major comeback after going through a challenging situation.” Bruno was so excited about the potential applications of the framework that she began marketing it to women who had gone through any kind of trauma or challenge. “After a few months, I realized that by marketing to everyone, I was reaching no one in a substantive way,” she admits. “I felt overwhelmed and overtaxed.”
To fix her error, she chose to focus on an audience she felt most passionate about and most qualified to serve: women who have gone through a high-conflict divorce. “To avoid repeating the mistake, I regularly check in with myself, as well as my business and marketing consultants, to make sure that my messaging is focused on my ideal client rather than on all the people who could benefit from my framework,” explains Bruno. She suggests entrepreneurs test different types of messaging to gather data on what attracted past clients to your business. Invest in a long-term business coach or consultant to hold yourself accountable.
9. Dan Mastromonaco, Founder, QMap
As the owner of a business that requires a lot of project-based software development, Dan Mastromonaco is always on the lookout for developers to do contract work. He learned a hard lesson when he hired a contractor too quickly without a thorough background check. The developer appeared talented and seemed like the perfect fit. “I paid the man a generous down payment to begin work immediately. Three weeks later, having received very little communication regarding the project, I contacted him and requested an update. After admitting he bit off more than he could chew, he suggested to cancel the contract, return the down payment, and part ways. I was frustrated at having wasted more time, but agreed and sent him a payment request,” Mastromonaco recalls.
He ultimately had to file a claim against the man, who did not show up to court. The contractor eventually left town, and Mastromonaco never recovered the funds. “After the sting subsided, I got to work researching all of the actions I could have taken that would have perhaps avoided this outcome,” he says. He compiled a list of things to keep in mind when hiring a contractor in the future: get a real background check, dig deeper than just requesting a portfolio, verify contact information, check social media, recognize that down payments aren’t the only way to do business and utilize monitoring/tracking software. He notes, “Since this debacle, the contractors I’ve worked with have been trustworthy, diligent and overall excellent additions to my team.”