TEXT OF STORY
Steve Tripoli: And now some stories about a fact of entrepreneurial life: failure.
Most business start-ups don’t make it, and an ability to risk that loss is considered key to an entrepreneur’s mindset. So let’s visit with some business-owning Marketplace listeners who failed and hear their lessons for the rest of us.
[SOUND: Automatic sprinkler]
If Kevin Knauss hadn’t come up short on the engineering front, you might have been hearing this sound all over California by now.
He’d developed a new kind of remote-controlled lawn sprinkler system. Knauss could manufacture, install and market it.
But this system needed a design tweak to please big customers. And for that, Knauss needed engineering skills. He says that crucial, missing talent sunk his company.
Kevin Knauss: The chief lesson for me is you need to be able to step in and do that job. Because if you don’t, you’ll get caught flat-footed like me to a certain extent.
Out in Kalamazoo, Mich., Todd Holm’s startup crashed when it ran out of money. He was making a heated sleeping pad for campers. Holm says one reason his capital ran out is that he didn’t use it wisely.
Todd Holm: I concentrated on more of the selling aspect with the capital, getting the product out there. And I think what I probably would do more now is take a different approach and maybe do a little bit more research and product development.
Both cases show how hard it can be for small-business people to anticipate needs.
Kevin Knauss, the sprinkler inventor, says that tells him to put more effort next time into identifying those needs.
Knauss: First do a business plan. And within that business plan, look at the areas that you know very little about and see if you could develop the background and the education to do those.
So let’s turn to our small-business expert, Patti Greene from Babson College. Shes thinks Kevin Knauss is being too hard on himself.
Sure, he was burned by not having the engineering skill his business needed. But Greene says that doesn’t mean he has to personally learn every job in the company.
Patti Greene: I think that’s something that can hold people back is thinking that they have to be the absolute expert on everything, instead of understanding where the other resources are that can help them. Because face it, you can’t know everything well enough to make this all work — not if you really want it to grow.
Greene says Todd Holm the camping guy may be right to think he spent too much early money and energy getting his product to market. Research, development and industry contacts count too.
Greene: And that’s I think where business planning comes into it, is figuring out what’s the order of, when do you go to the trade shows, when do they have to see the product, all those types of things. And then laying out your plan to follow it through.
And finally, some lessons from listener Rachel Carter in Fort Bragg, Calif.
She’s a land developer who regrets that an early failure scared her away from real estate for years.
Rachel Carter: At the end of the project, I should have viewed it that I’d learned a lot and what was next. And instead, what I learned from it is that it was too hard and I didn’t want to do it anymore.
Carter also wishes she’d sought help much faster when she was sinking.
So plan against your weaknesses, use startup capital wisely, and draw lessons — not fear — from your failures. These listeners are making my job easy.
I’m Steve Tripoli for Marketplace.
We’re here to help you navigate this changed world and economy.
Our mission at Marketplace is to raise the economic intelligence of the country. It’s a tough task, but it’s never been more important.
In the past year, we’ve seen record unemployment, stimulus bills, and reddit users influencing the stock market. Marketplace helps you understand it all, will fact-based, approachable, and unbiased reporting.
Generous support from listeners and readers is what powers our nonprofit news—and your donation today will help provide this essential service. For just $5/month, you can sustain independent journalism that keeps you and thousands of others informed.