3 lessons from a 70K mistake

This is Synthetic Mind. Today we have more surprises than a box of chocolates from Forest Gump.

  • The Biggest L in My Career

  • How To Lose $70K In 4 Months

  • How NOT To Lose $70K In 4 Months (Lessons)

The Biggest L in My Career

I lost $70,000 dollars.

When I realized that was over 8,235 Chipotle burritos, it felt even worse.

Before I touch on how, lets back up. Three years ago I started an email marketing company named Settler Systems.

At the beginning of 2023, I made a promise to myself. I would commit to betting on myself

Why?

Because I was craving progress.

Everyone has their own entrepreneurial style. Mine has always been ultra ultra conservative. I would penny-pinch every single expense, and hesitate to take any risk.

Dont get me wrong, this initial mindset helped me survive the hard times. After a while, it became the prison that locked us into the same revenue repeatedly.

One day I was eating dinner with a buddy who told me about a website called Design Pickle.

Theyre a design firm that charges a flat rate for unlimited designs. Services charged like software. He explained as he cut into his steak.

Services charged like software It hit me like a ton of bricks.

We already have good demand for our products. This is just a better version. Its EXACTLY what we need to do.

How To Lose $70K In 4 Months

I spent the entire night creating my bulletproof game plan:
(Side note: If someone tells you their plan is bulletproof, 9 times out of 10 it has more holes than a strainer)

Step #1: Build a software that turns our email services into a dashboard

Step #2: Market the h*ll out of it. Offer unlimited emails, it should be easy.

Step #3: Cash in, big time.

At the time, I thought this was my key to success.

Within a month I built a team of two devs, and two marketing guys.

By the end of month two, I felt like I was running on a treadmill of problems. Bug after bug pushed back the launch date further out.

Within three months, I knew I was in way over my head.

I figured I should reach out for help.

The next day I was introduced to a guy who built a software with over a million users. The conversation went something like this:

Okay - Heres the awesome idea, what do you think?

Love it!

Okay great. So how should I get this thing moving a long, what dev-

He cut me off. Dont build this.

What do you mean? Realizing I forgot to mention we were already $20,000 in the hole on development costs.

Look. Everyone has great ideas. Im sure this is too, but just build a minimum viable product.

A what? My head was spinning

Can you just make a form on Google and see if people will use it?

Yah but we need a dashboard and -

You need to test the idea. Not the tech. If the ideas good, and people like it theyll forgive you.

I got off the phone as quickly as I could.

With my ego a bit bruised, I had a decision to make.

Pause all development, and move into this MVP thing Or just keep swimming.

I decided to push forward. More determined than ever, we were going to launch. And do it successfully.

I was losing $750 a day at this point.

I felt like cash was literally evaporating from my bank.

Once the product was good enough I had to get it moving. The entire reason I made this thing was to differentiate ourselves.

Then I had my next bright idea: Launch ads.

(Some of them were actually pretty funny - like this one)

$30k in ad spend later I was on a call with a mentor. He looked over our ads. His one piece of advice was to change the offer completely.

AKA start a new business.

Sh*t.

How NOT To Lose $70K In 4 Months

It took me $70K to learn these 3 lessons.

Pay attention to the end so you can avoid the same pain.

#1 - Dont keep digging (Sunk Cost Fallacy)

Dont cling to a mistake just because you spent a lot of time making it

I kept pushing forward because I had already spent so much time and money. I knew I should build an MVP or not test heavily on ads - but I felt I was too deep in to get trigger-shy now.

#2 - Test the damn thing, first

I made a new term from this experience:

Idea drunk - When youre so blinded by the potential of an idea you lose all your senses.

Now, I want to be clear. No one loves a steamy hot idea more than me.

But we couldve saved $40,000 if we had just taken the simple route and tested the core idea before spending a penny on development.

Instead, we paid a premium to be fancy.

#3 - Take it slow

My biggest mistake was trying to hit my financial goal in months. Not years.

Looking at my product through a 6-month lens cost me a lot of money.

Instead, I shouldve asked How can I guarantee to hit my goal in 5 years.

So when you start to build something youre proud of, take the long road and build it right the first time.

- Johnathon

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