How can Europeans learn to better cope with business failure and turn it into an asset? Entrepreneur Arthur Tolsma shares insights gained by personal experiences.
In about one month (14 October), we will be attending a conference called Failing Forward in Brussels. Not your typical tech event, the conference will feature keynotes from inspiring speakers (not only from the tech industry, by the way) who will, rather than boast about their achievements, share some lessons learned from failing at their businesses.
Earlier this year, I noted that Tech.eu is part of a project dubbed LIFE (and is thus a partner of the aforementioned conference), which has its goal to research why ‘failure’ is so stigmatised across Europe compared to other regions, Silicon Valley in particular. To help make failure less of a ‘taboo’ and regarded as a valuable lesson like it should be, we will publish interviews with some of the keynote speakers, people who have the heart to stand on stage and share their experiences with not succeeding.
First up is Arthur Tolsma, a Dutch entrepreneur who has a failed startup behind him but has turned himself into a business coach, author, startup advisor and professional speaker (see his TEDx talk) in a bid to spin his experiences into a positive way.
Tolsma started his first company – Greetinq – in 2007 after attending the Technical University of Delft, along with two other co-founders and a willing angel investor. Things seemed to go well for quite a while until, well, things stopped going well. We asked Tolsma what happened, and what he learned in the process.
Tech.eu (TE): What was the idea behind Greetinq?
Arthur Tolsma (AT): Our big idea was to try to improve voice mail, make it less boring and more of a personalised experience. So basically if your friend or relative would call, they would hear a different voice mail than a colleague, for example. Or if someone from another country would call, users could record voice mails in different languages and automatically play relevant ones. We later expanded that with a few other features but that was the basic idea.
TE: That actually sounds like a good idea. Did you ever manage to monetise it?
AT: Only partly.
TE: Did the company see any traction in the first few years?
AT: In the beginning it was just me and two co-founders, but in 2009 we grew to about 8 people, admittedly including freelancers. That was a big year for us, because we won a pitch competition on (Dutch) national television. We got our 15 minutes of fame, and everyone who was watching us predicted we’d be able to turn it into a successful business. That never happened; we made a lot of mistakes, mainly by not focusing enough attention on the commercial aspect and finding a sustainable business model.
TE: What happened to the company after you won the TV pitching contest?
AT: When we won that competition, we felt great because everyone kept telling us we were doing well – so we started thinking we were doing well, too. It clouded our minds a bit. In reality, we were forced to fire most of the people involved with Greetinq just a few months later, in 2010, after which we kept pushing to keep it alive. Ultimately, we sold the company in 2012, but it was certainly not what you’d consider a successful exit.
TE: Can you share more details about the acquisition at all?
AT: I can’t disclose how much the company sold for exactly, but I can tell you that I estimate putting about €100,000 into the venture based on the time and money spent – and that the return wasn’t sufficient enough to compensate for that.
TE: You had one angel investor – do you think you could have made it if you’d raised more funding?
AT: I think having a longer runway could have helped, definitely. We could have used the capital to hire people with commercial expertise.
TE: Let’s talk about some of the lessons you’ve learned trying and failing to turn Greetinq into a successful company. What are your main take-aways?
AT: First of all, I think people in The Netherlands but probably in Europe generally don’t talk about failure enough, and typically only boast about their achievements. I could have probably spun our acquisition into a success story, but it wouldn’t be the truth. Especially when I talk to fellow entrepreneurs, people seem to value that I tell a real story, which led me to writing my lessons down, and speaking about my experiences at events.
TE: Looking back, what are some of the things you would have handled differently?
AT: One of the major things is that we believed that a good product sells itself – it’s also something that you hear a lot. We found out that it’s bullshit, actually. Whether you don’t like doing sales, or look at it as a necessary evil – that doesn’t matter, you’re going to have to do it anyway. Of course, you need a good product, but I’ve learned that every entrepreneur needs to have a basic sense of commercial insight and sales experience to sell even a great product. We definitely didn’t put enough time and effort into talking to many potential customers to win a few deal, filling the funnel and making sure we would have new contracts coming in.
TE: Any other lessons that you’ve learned?
AT: Applause, compliments, praise … that’s all great, but they don’t pay the bills. As you said in the beginning of this interview, many people reacted the same way when we told them what Greetinq was; that it was a great idea. We had a good pitch, a good story, and everyone seemed to like it – but it was always a difficult sell. But: there’s a difference between nice-to-have and need-to-have, we learned the hard way.
What I also learned was that, while everyone says entrepreneurship is about working extremely hard, I find that it was wrong to really stretch myself so thin most of the time, not taking any vacations to regain energy etc. One specific example of the downside of working too hard: I remember a conversation with a potential investor when I was really not feeling exhausted. I failed to convince him; he even got mad at me for not being sharp enough. I would definitely advise entrepreneurs to refrain from working too hard.
TE: You’ve also written about a book about your experiences, called ‘Startups & Downs’. I assume this covers many of the lessons you’ve learned, but how does it stack up against other books about management and entrepreneurship?
AT: It’s different because most people write books after achieving some sort of success in business, while I did the opposite. The reason I wrote the book was because I told my story on stage a few times and people seemed to value my lessons, so I figured maybe a larger audience could appreciate them. I think the book differs because it’s about cold, hard truths, which you don’t find that often in the business section. How often do you read entrepreneurs about their failures?
TE: You consider Greetinq to be a failure, but did you also consider yourself a failure on a personal level?
AT: At the time the business went sour, definitely yes. As most startup founders will tell you, when the business is going well, you’ll typically feel good too – but it works the other way around as well. I remember looking around in the incubator where I was working from at the time, and seeing successful business around me, while I was the first to fail. It was very difficult for me, I felt like a loser, especially because I was celebrated as a hero just half a year earlier. Sharing my story and embracing the failure really helped in that regard.
TE: How long did it take you from feeling miserable to getting back on your feet?
AT: Quite long, to be honest, but also because I was utterly overworked. I had put all my money into Greetinq and has to borrow 10,000 euros from my mother to get by – which is a strange feeling when you’re 29 years old and the media is celebrating you as a successful entrepreneur. All in all, because of being overworked, having very little money, the stress, the dent in my self esteem … it took me two years to really grow out of that. When we finally sold the company in 2012, I felt like I was back on track again, and then I started sharing my experiences in different ways.
TE: Do you see yourself starting another venture at some point?
AT: Yes, definitely. I don’t know when, but I’ve had some conversations with people in the past few years, and I’m open to new adventures. I’m relaxedly waiting for the right opportunity and team to come along.
TE: As you speak at many events, I assume you also get a lot of questions from aspiring entrepreneurs. Which advice do you typically try to give them?
AT: I would say: surround yourself with good mentors. Not necessarily mentors with 20 years more experience than you have, but people who’ve done it once or twice already and can you give you hands-on advice about what you need to take care of, and how to handle certain aspects of running a business. I certainly could have used people like that around me.
TE: What do you plan to get out of the Failing Forward conference yourself?
AT: I like to inspire people to talk more openly about their failures. I think it’s great that this type of event exists in the first place; people need to share their experiences more I think. I’m really happy that I can participate in something like this, especially as it’s an internationally focused event, and I’m sure there will be great people to meet there!
TE: You mentioned earlier that you believe failure is stigmatised in Europe. Do you think that’s a problem that can be fixed?
AT: I think it can be fixed, and I think that process has already begun. Now we have conferences like Failing Forward popping up everywhere. There’s the generational gap that will solve itself over time, although culture is not something that changes overnight. Step by step. Governments can also help, with special awards, stimulating conferences like Failing Forward, support programs, changing laws to make it easier for founders to bounce back, etc.
TE: Any final tips for people getting on the entrepreneurial rollercoaster?
AT: I think it’s good to have a plan B. Some people will advise you to complete drop everything to chase your dreams, but I think it’s good to have a backup plan and be more careful. Next time I’m doing a startup, I might do it only a few days per week in the beginning, combine it with some freelancing gigs, and step up to the plate once there’s traction. I believe there are certain phases in one’s life. Sometimes it will be good to have the ‘rollercoaster phase’ and push the pedal to the metal, knowing that there may be a few more relaxing years after that during which you can regain your energy and recover. It doesn’t always have to be extreme all the time.
This post was originally published on Tech.eu.
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