Everyone makes mistakes, and it’s important to learn from them to better yourself and your business.
If you were offered the chance to avoid making the most painful mistakes of your career, would you take it?
Most people would grab at that chance. It’s understandable. We all want to avoid looking like fools. We’d all prefer to take a smooth path to success, rather than that bumpy road that turned out to be laden with land mines.
Unfortunately, in my experience, that’s not how success works. It’s our mistakes that make us. Without our mistakes, we can’t learn the lessons needed to overcome the habits, behaviors, or assumptions that caused them. Mistakes are instrumental to success.
Embracing My Mistakes
Despite the discomfort, expense, and embarrassment of the mistakes I’ve made in my professional career, I’m glad they happened. My mistakes have taught me to be humble. They have shown me that there’s always more to learn. Most importantly, they have helped me to figure out what not to do.
Mistakes show us when we need to correct our paths and find better solutions. My biggest mistakes have been central to helping me build the successful business I have today.
Learning From Others’ Mistakes
Every business owner makes mistakes. It’s an unavoidable truth.
In most cases, starting a business is a trial-by-fire experience. New business owners learn lessons by making their own painful mistakes and missteps. At first, that was my experience, too.
Fortunately, I’ve since realized another important truth: Every business owner also has the ability to learn from mistakes others make. After all, many business leaders and entrepreneurs are happy to share the lessons they’ve learned. The hope is that by sharing their experience genuinely and transparently, they can help other business founders avoid some of the mistakes they’ve made.
Although you will still make mistakes, hopefully, your mistakes can be only the inevitable, necessary, and beneficial kind — the kind necessary to help you find your right path forward, whatever that may be.
Five of My Biggest Mistakes — and What I Learned from Them
In that spirit, welcome to my recounting of five of the biggest mistakes I’ve made in my career and what I learned as a result.
I’m happy to help you avoid some of the mistakes I’ve made.
1. Don’t Be Ashamed to Ask for Help
My Mistake: I’ll admit it. Just like most self-made entrepreneurs, when I was younger and first starting out as an entrepreneur, I used to think that I knew how to do everything myself. I was presumptuous. I didn’t think I needed advice.
At first, I suffered from tunnel vision, unable or unwilling to acknowledge that my ideas might not be the best ones. I was proud. I thought I knew more than I did.
I also felt that to be a true self-made entrepreneur, I genuinely needed to do it all myself. I worried that asking for help might make me look uncertain or weak.
What I Learned
Of course, I know now that I couldn’t have been any more wrong. I now operate my business by making sure I’m listening to the best advice I can find.
Over and over, my experience showed me that I didn’t have all the answers. I wish I could say that I learned this lesson quickly. Instead, it was a lesson learned over time.
Ultimately, I woke up to the reality that, no matter how smart we are, there are always other people who are smarter. No matter how many ideas we have, other people are still likely to have better ones.
Now, I hire the strongest, sharpest leaders I can find, and I expect that they bring their own ideas and vision. I empower them, support them, and above all, listen to them.
In addition, in 2017, I put together an advisory board for my company. Every meeting we have generates a sizable to-do list for me. The members of my advisory board are all experts in their fields, and I’m confident they’re all much smarter than I am. When you surround yourself with a group of highly intelligent people you trust, great things can happen.
Learning to ask for help may be the single most important lesson I’ve ever learned for succeeding in business. Don’t hesitate to ask for help and seek out mentors, especially among the entrepreneurial community.
Most entrepreneurs — including me — wouldn’t have gotten where they are today without the help and sound counsel of other professionals.
2. Maintain the Right Balance Between Sales and Execution Capacity
My Mistake: Back in 2015, I was focused on increasing my team’s execution power by hiring pre-emptively. To deliver against my sales projections for a new high-price-tag product we pushed to the market, we needed more people. So, I hired more top-quality developers — far more than I had work for. I simply hoped that sales would catch up.
As it turned out, my sales projections were overly optimistic. The problem was that I hadn’t paid the same attention to building a strong sales organization in my company. It was a huge mistake. We ended up with more employees on payroll than our revenue could support. Ultimately, it led to painful layoffs.
I have never felt more inadequate than when I had to tell those very talented, highly deserving people that I had promised them jobs they couldn’t keep.
What I Learned
It’s crucial to keep a very close eye on the balance between how much your team can sell and how much they can deliver. It’s much easier to build up your delivery capacity once you have an influx of sales than the other way around.
In support of these objectives, it’s imperative to establish a strong sales organization capable of supporting sustainable business growth. Although the product is still paramount, your ability to sell that product is equally as important.
At times, my company has struggled to settle on the right ways to approach or engage with clients. That’s why, over the past several years, I’ve devoted a significant amount of time, energy, and money to developing a strong sales organization. I’ve done my best to enlist the right help and support the right initiatives. Iteration by iteration, we’re determining what works, what doesn’t, and how we can continue to improve.
That said, however my sales organization evolves, we’ve established one unshakeable core expectation: All sales projections must be based on reality rather than hope. Nobody is helped by unrealistic or overly optimistic projections.
3. Don’t Charge Hourly; Bill Monthly
My Mistake: We provide software development services to clients, and we used to charge clients by the hour. The goal was transparency for our clients and security for our team.
We would be paid fairly for hours worked, and clients would be charged only for hours worked. Of course, it also meant that our people could be paid overtime when appropriate.
Unfortunately, as we experienced, hourly compensation tends to create several issues. Clients can’t project what their monthly bills will be, wreaking havoc on their budgeting process. With such uncertainty, neither we nor our clients could make effective internal plans about hiring, marketing, or spending needs.
In addition, hourly compensation sends the wrong message to workers: It says “work more,” not “work better.” Is that the message you want to send to your people?
What I Learned
Ultimately I realized that, for service businesses like mine, it’s far better to bill monthly. Monthly billing gives transparency, predictability, and accuracy to both service businesses and their clients. It helps both parties know what to expect and plan for.
When my company made the change to monthly billing, we saw only benefits. Of course, our clients were happier. The policy engendered trust and mutual respect and improved relationships.
The revenue we lost by removing overtime from our invoices was more than 10 times compensated by the growth and extension of existing contracts and the ease of bringing new clients on board.
4. Your Original Investment May Not Last as Long as You Think It Will
My Mistake: When I decided to move the headquarters of my software design and development business to the U.S. from Russia, I fundamentally misjudged how much money it would take. In particular, I grossly underestimated the cost of living in the Los Angeles area. As a result, my original $250,000 investment in establishing a U.S.-based business didn’t last nearly as long as I’d hoped.
The rent for my relatively modest LA-area apartment would have afforded me a mansion with a staff back in Russia. The funds that I’d hoped would last three years lasted exactly one year.
What I Learned
In planning for the move, I made mistaken assumptions. While I’d thoroughly researched costs and projected expenditures for my business, I hadn’t spent enough time assessing the impact on my personal expenses. By focusing so intently on my business, I lost sight of the big picture required for financing my life.
During 2012, our first year in the U.S., I didn’t pay myself a salary and blew through my personal savings. I wore several hats and worked longer hours than I’d ever imagined.
Fortunately, we began to establish our reputation in the U.S. and started making money. Although I was ultimately able to avoid taking on debt, it was humbling and more than a little scary.
The experience strengthened my resolve to do a better job at seeing the big picture in any situation. Now, before I make any substantive decisions about my business, I make certain that I am considering all factors.
Importantly, I integrate lesson one — not being ashamed to ask for help — as I make these assessments. Multiple diverse perspectives are always better at informing a true big picture.
In addition, I now add a substantial cushion to any assumptions about investments required for establishing or growing parts of my business.
5. Give Generous Stock Options to Employees and Advisory Board Members
My Mistake: Originally, I assumed that offering competitive salaries and a solid-but-basic benefits package would be sufficient at attracting and retaining top talent.
In Russia, where I’d started my professional career, a good salary and decent benefits were not necessarily a given. What my U.S. company originally offered far exceeded what you could expect from most businesses in Russia.
I hadn’t yet realized what I was up against. Whereas in Russia I could absolutely attract the top-level developers and designers, in the U.S., the top talent I sought expected more.
As an agency/service business in the U.S., we are competing with venture-backed companies for the best talent. Out of necessity, companies like ours are becoming more and more creative in designing compensation and benefits packages that will attract the best. Good salaries and typical benefits can only take you so far.
If I wanted to attract the best, I needed to do better.
What I Learned
In my experience at my software development company, the best talent also tends to be the most invested talent. My top people are genuinely invested in the success of our company. It only makes sense that they’d value having a true stake in that company’s success.
That’s why, at some point, I realized that offering stock options could be game-changing. I now give my employees and advisory board members generous stock options. I highly recommend it to all business owners focused on attracting and retaining the best people.
Aside from some legal expenses, issuing stock is not going to cost you a dime. However, it can have a huge impact on getting the right people in the right positions — people with vision that aligns with your company’s goals.
Learning to Embrace Your Mistakes
The mistakes I’ve shared show clearly how much I needed to learn. They also tell the tale of how much I have learned.
I’m not proud of my mistakes. But I’m not ashamed of them, either. These mistakes became some of the most important things I’ve ever learned.
The only truly bad mistakes are the ones you don’t learn from. If you can learn to own your mistakes — taking accountability and embracing them as opportunities to learn, grow, and improve — your mistakes can become some of the best things that ever happened to you.