28 Apr The Scariest Business Stories You Haven’t Heard Yet
Halloween may be over, but for startup entrepreneurs, scary stories are a regular year-round concern. It’s not easy being an entrepreneur, but with a little luck, and a lot of grit, you can get by.
I asked members of The Young Entrepreneur Council (YEC) to share their startup horror stories. YEC is an invite-only organization comprised of the world’s most promising young entrepreneurs. So what are their scariest stories, and more important, what did they do to escape those situations?
1. We Almost Missed Our First, Big Order
Our first custom order was with the Pac-10 (now Pac-12) athletic conference. We had to deliver 150 watches to L.A. by Monday. Our headquarters were in Berkeley, CA, 400 miles away. On the Thursday before the watches were due, UPS told me they were delayed. So I cancelled my flight, received the package Monday morning and bought a last-minute ticket to L.A., hand-delivering the watches just in time.
2. We Had 72 Days to Develop an App for a Retail Partner
The scariest thing was hearing that we had 72 days to develop a new mobile app that interfaced with GPS devices in order to satisfy the requirements of one of the world’s largest electronic retailer. It would have been a company killer if we had missed it. Beyond all doubts, and with the help of an amazing development team, we worked relentlessly and submitted an app that worked right from the start.
3. My Publisher Went Bankrupt
I sold my first book to a publisher on the basis of a proposal. But after I finished the manuscript, the publisher went bankrupt. Suddenly, I had no buyer for a project I’d just spent the better part of a year working on. Most publishers don’t want to buy a nonfiction book that another editor has commissioned and worked on, but I had no choice but to find one through some very intense networking!
4. We Weren’t Prepared for Tax Season
As two guys previously on W-2s, we started our company, made some money our first year, spent a whole bunch, paid somebody to just do our taxes then got hit with what we owed the IRS. It was a decent six figures we weren’t expecting and frantically took on work to cover the expense. It put us in a roller coaster cash flow cycle that meant many long, stressful catch-up nights.
5. I Was Sued
I started my business when I was in my early twenties and completely freaked out the first time things got legal. Getting threatened to be taken to court pretty much destroyed my mental health for a few weeks. It ended up being an empowering experience once I got my thoughts together and fought back. I lost some money, but walked away with my integrity — and a thicker skin.
6. My Server Was Taken Down
I once built a side project that a certain brand didn’t like. They contacted my hosting company and got my server taken down very quickly. My business shared the same server so it was down also. The brand emailed me after asking that I close the project and give them the domain name, and I complied. But it still took a few days to get everything back up.
7. Our Money Was Held Hostage
During a big launch, our payment processor held all our funds and forced us to deliver our product without any of that revenue. They said our business was growing “at an above average rate.” I had called to let them know about expected activity in our account, and I recommend you always do that too and have a Plan B. I put all my personal savings into making sure my clients got what they paid for.
8. We Relied Too Strongly on Google
In 2012, Google released its Penguin update and our site saw a dramatic drop in its major keyword rankings. It was devastating and left us feeling helpless. We quickly regrouped, focused on cleaning up the issues over the next three months and won a Reconsideration Request from Google. Not only did we bounce back but our team re-engineered our on-page SEO and our rankings grew even higher than before.
9. I Was Hours Away from Laying Off Half Our Staff
We hit a major downturn after a few internal missteps that led us into a long stretch of hemorrhaging cash. After maxing out our credit line, I came in one day ready to lay off half of our remaining staff. With the utmost of luck, the first email I see in my inbox that morning was from a client we had been chasing for months giving us approval on a six-figure deal that pulled us out of our slump! – Ross Beyeler, CEO, Growth Spark
10. We Miscalculated Our Inventory
Our company buys inventory months in advance. Early on, we made a miscalculation on the merchandise our clients would be drawn to, and found ourselves with items that didn’t reflect what our clients were looking for. We decided to make the decision to do a write-off of the inventory. It was painful but it was better than the alternative of risking losing the trust we had built with our clients.
– Katrina Lake, Founder & CEO, Stitch Fix
As for me? I’ve had more horror stories than I’d care to recall: Near misses of payroll, clients from hell, and computer issues to name a few. But my scariest stories have all been when I hired the wrong people and failed to see that soon enough. From that, I’ve learned to hire slow, and fire fast.
The bottom line is, we learn more from mistakes from successes.
So take all of these entrepreneur’s scary stories, as well as your own, and use them to improve your business skills, avoid making the same mistakes twice, and keep your business and career as soothing (i.e. not scary) as possible.