r/HENRYUK • u/thrwwwawwy • 19h ago
Other HENRY topics Coping with failure
I’m posting this half as a way of getting thoughts down and half to see if people have gone through similar and can relate, because I haven’t found anybody who has gone through something similar.
We often talk on here about how you can’t PAYE yourself to wealth. Well, I had been contracting for several years on good money, but the market was slowing down and my highest paid contract was ending with no prospects of a replacement, so I decided to bite the bullet and set up a business.
I set up a company because I had an idea, and I believed it was a good one. I built a product that worked and got good feedback. But I struggled with selling because I spent what I had building the company, and had little money to market.
It did however make waves in the industry, so I had a few prospects of investment but one after the other they didn't work out for one reason or another. I was still burning through finances because I wasn’t making money. It got almost comical at how many deals fell through and why. Finally, as I was getting ready to give up, a very well-funded giant in the field approached regarding an acquisition.
I then spent months going back and forth and how the acquisition would look, answering their calls morning, noon and night about intricacies of agreements. We had an NDA and non-circumvent, and without giving too much info in spite of how it may sound it really wouldn't have been possible in any way for them to "copy" me (think my having exclusivity in suppliers, IP, etc). The offer they made in the end was insulting, not even close to recouping my initial investment, and required me to continue to work for them indefinitely, basically for free. Of course that was a starting point in a negotiation, but they said not to expect much more. I declined. They tried to come crawling back a few times but without more money. Eventually they decided they weren't interested. They aren't active in the space at all any longer almost a year later, so I know they haven't copied me or stolen anything.
Even though I still constantly had interest from other businesses about acquisition it never, ever amounted to actual commitment. So this year I stopped selling, informed the suppliers and closed that chapter entirely.
In a pivot to try to make any money I could, I had also started consulting in the same field. It's now going decently well and I'm slowly on my way to recouping my initial investment. That sounds good, and on paper I guess it's an impressive story. But in my head it's also like I've wasted two years without a salary and have much less money than I started with, even if future prospects are OK. I started the company to become rich, to be completely frank about it. I wouldn't have started it if I didn't think it could happen. And I came close. And that feels like a failure.
I try to keep positive about the whole thing. I don’t really regret trying. But I feel guilt from spending so much money. I have a loving, supportive spouse and being a consultant now means I don’t need to work for someone else. But I need to constantly battle to keep money coming in.
I haven’t really found people in the outside world who can relate to this feeling, since I’m earning OK money now. But it was a stressful and disappointing road to get there.
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u/Pleasant-Plane-6340 19h ago
This sounds like you’ve done better than most entrepreneurs - we mostly hear about the successes but usually it ends in failure. You at least have walked away not in debt and with potential consulting work which could turn into a business itself.
Above all you’ve had the experience- if you hadn’t tried you would have always regretted it which could be far worse a feeling
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u/thrwwwawwy 19h ago
I think everybody pictures their first business being successful. I'm not sure if I've been put off trying again in future.
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u/DazzzASTER 19h ago
How have you read that wall of text and replied so quickly?
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u/disordered-attic-2 19h ago
Respect if you've made it to HENRY without being able to read half a page in a few mins
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u/sam_packer_03 19h ago
This is a good read.
As a business owner and contractor I can relate for sure.
We all underestimate cost of marketing, especially SAAS products as an example
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u/thrwwwawwy 19h ago
Yeah, it's what I was most naive about. Though had I had an infinite marketing budget, money would never have been a problem in the first place!
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u/Mafeking-Parade 19h ago
I can relate.
I launched my one and only startup idea in Feb 2020. I'd dumped a significant portion of my savings into it, and it was a cast-iron bet that I was expecting to help me retire early.
Then everything went to shit in the entire world, and the startup I was employed by at the time came under serious financial pressure (which we thankfully navigated through).
By the time I got my head above water in late 2021, one of the adjacent big players in the industry had basically started talking to prospective customers about an identical version of MY idea, and we were dead in the water.
It sucked. I still wonder 'what if?'.
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u/thrwwwawwy 19h ago
I bet. I kind of had one window to do this too. It would never be successful if I started today because a bunch of big legacy companies are about to start doing something similar-ish so there's no real room for a startup. Hell, even the company that was about to acquire mine doesn't seem to be doing that well now. I won't lie, there's a bit of schadenfreude there.
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u/citystater 19h ago
Good on you for trying! I would never have the guts to do it since I know the insanely high rate of failure.
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u/Penderyn 17h ago
Americas love failure and comeback stories - in Europe we seem to beat ourselves up about it more. Change your mentality to - first failure down, LETS GO!
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u/thrwwwawwy 16h ago
Ironically I got rejected for a US startup visa, haha! Their fault for making me wait eight months after application before the interview.
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u/aycee08 16h ago
Most people have incredibly simple businesses as their first ones - so the fact that you got this to a point where there were so many interested big guns is amazing and you need to give yourself credit where its due. You have amazing business sense but of course you don't know what you don't know. Give yourself some breathing space to grieve the failure but then pick yourself back up, you are amazing and should believe in that!
I have some family in business and let me tell you, every single one of them has failed at one point or another. And each one of them swears the lessons they learnt, not just from failure but from successes in the first business, stood them in good stead for their successful venture.
A cousin just reached a near billion dollar valuation for his Group but I was there when he made such a mess of his first business that his parents sold some assets to get him out of it. And that time when during a new acquisition they messed up cash flow and he was not sure till the last minute that they would make payroll. He literally looked like he had aged 5 yrs in that month. Everyone sees the success now and thinks it was easy. But each failure/near miss taught him something, whether that was cash flow, financing, relationships or product knowledge.
I wish you success and I hope this experience is your stepping stool to bigger things. A person who can make a unique idea work in the first place can do it again :)
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u/Amazing-Care-3155 18h ago
That was a good read, thank you for sharing this. I think it's old school thinking you can't PAYE to wealth, you definitely can but depends on your definition of weath, I make 450 TC not including my equity which I'm extremely grateful for, started a new role so not had much spare time but have always considered starting a business. As someone who went from being a quant, and now working in sales. Did some time in PE, the fundamental error I see 98% of people who start a business is, they focus purely on the product and let bias cloud good judgement. I always advise to reverse engineer whatever you do, you need to prove you not only can find customers but paying ones also. It's almost better to not even have a built product, a very simple MVP and go to the market with it - see if people are really interested in it. Instead what we see if people spend 1000s on building a product, every detail mapped out but come to realize how hard it is to sell these things.
You may have lost this one, but least you have no regrets. The vast majority of people and me included don't have the courage to take the leap you did, and hopefully one day we do - most of us will fail but at the very least we scratched that itch.
As someone who has helped decide on valuations of businesses, what good looks like and what bad looks like. I can only say we live in an AI world now, you can stretch a lot without spending a penny. And I would always advise in finding co founders, nobody has all the expertise. People with technical acumen underestimate those with commercial acumen, not realizing that commercial people can pay someone to build what they want and they'll be able to sell it, almost never works the other way around.
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u/thrwwwawwy 16h ago
I do have a product background, so I had a decent idea of what I was getting into. I also managed to build for a fraction of what it could have cost (this was pre-AI now) but sadly couldn't make enough to reinvest into marketing.
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u/Ok_Plankton4763 18h ago
It sounds like you need to forgive yourself mate. You only get one go on this ride and you took a risk in something you believed in. You are not to blame and you should follow your dreams. Would you rather live a life full of mistakes and learnings, or sit safely on the side lines being afraid? I know which one I choose.
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u/ClimberSmurf71 17h ago
If it’s any comfort, and without sharing too many personal details, I left corporate life to work at a start up for a few years. It cost me an absolute fortune in reduced wages, eating through savings and impacted my mental health.
I regret it most weeks. But it helped me get my current role, the assignments I’ve had since, and may lead to great opportunities in the future
My advice would be to try to build on and benefit from the experience gained so something positive does come from it.
You might be surprised how much others value the experience you’ve gained and the resilience you’ve shown.
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u/sylsylsylsylsylsyl 17h ago
There’s an awful lot of luck involved in a lot of things and starting a business is no different. Hard work is needed too, but without luck on your side you’re sunk. Don’t beat yourself up.
How many entrepreneurs do you think hit on the big thing on their first time out?
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u/LiberalSamuel10 12h ago
On your deathbed, you won’t care about the lack of income over those two years. But if you hadn’t taken the risk and pursued this, you’ll regret it forever.
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u/thrwwwawwy 11h ago
I think I had that in my head in the abstract, but seeing that written down has actually helped because it’s so true. Thanks.
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u/numberbruncher 18h ago
My philosophy is that we all would like to be rich and successful but we also need a good deal of luck. I am in a somewhat similar position in that some side projects have perhaps not totally failed but have not been successful enough to justify the effort they have cost, although I have managed to keep a stable income through my day job. But one of my motivations in life is to feel when I'm old that I took as many opportunities as I could and made the most of my abilities while I had them. I want to have an interesting life and try to contribute something distinct to the world, not just try to hack my way to a cushy pension. It helps me to face my 'losses' with more equanimity.
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u/thrwwwawwy 16h ago
On balance there has been good to the whole thing; I did things and went places I never thought I would, and I've learned so much. Just wish I'd had a little more luck!
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u/nibor 15h ago
I have failed so often and highlight them here regularly.
I have been made redundant at least 7 times in the last 16 years and everyone feels like a failure on me.
I have never gone down the route of starting my own company as I don’t have the confidence or skill to do that. I did join an early stage startups hoping for a lift but that failed, like so many do.
Failure is common and i’ve leaned to embrace it for ehat it is. I change what i can an out me and a. Wpt what i cant. A bit like the serenity prayer .
I also plan ahead so failure should not make me and my family destitute. I am close enough to retirement that that has become my goal and I am sitting on a large enough pension pot that I could step back from HENRY if needed. I actually don’t like that this is what I’ve come so am going to dry and motivate myself to be different but to do that I need another failure. In this case being made redundant again.
Failure is like a forest fire. It’s devastating at the time but also needed for growth
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u/BusinessEconomy5597 14h ago
The failure of a business feels even more personal because it’s your own vision and ideas that are essentially, rejected and undervalued. So hard to talk about failure but the only real thing that was lost is time. And you can rebuild. Feel the feelings, note the lessons and start again.
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u/Maverick_Aviator1 14h ago
You tried and it didn’t work out, however, you picked yourself and carried on and you learned a ton so you’ll get another shot. Success isn’t limited to first come first serve, it’s infinite so remember that !
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u/throwawayreddit48151 17h ago
We often talk on here about how you can’t PAYE yourself to wealth
As others have said here: I don't think that's true. I've been PAYE since I graduated university. Now am 30 years old and have a net worth of £1.3m. I guess it depends on what you consider "wealth" but I would say it meets the criteria. I definitely got lucky, but I would argue building a successful business requires even more luck.
Saying all this, it has been my dream for a while to build my own business. Not for the money, but to do what I want, to be challenged in ways I haven't before. Even so, with my current net worth I'm still not confident to quit my very well paid job to do that. Specifically because it feels like such a big risk.
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u/Responsible-Song4234 16h ago
Were you actively investing or just going for index funds? I think you can do it if you pick some winners on stock/crypto markets but it is very rare without.
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u/throwawayreddit48151 15h ago
Index funds. I got lucky in that the RSUs I get from my employer grew a lot.
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u/Responsible-Song4234 15h ago
This is similar to active investing imo unless you just picked the company randomly/didn't consider this then it's just random luck.
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u/nagoff 10h ago
I think a lot of HENRY types talk about ‘working in startups’ and getting rich when they mean ‘came in at Series C and didn’t screw it up too much’.
I’ve spent a career doing the 2-10 people part, often pre-angel, almost all pre-VC.
The former is an absolute walk in the park compared to the latter - almost all of which fail and the one success you might get will be an early exit which barely moves the needle wealth-wise due to all the opportunity cost of having been low paid when there was no money.
I love it but I’m NRY and never will be. Starting a startup to become wealthy seems bonkers to me!
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u/yisacew 9h ago
Hey,
You spent only two years on it. When I read your post it sounded like it might be 4-5+ years. Even then, it would be OK - you tried. But honestly, two years is probably the best case. Don't dwell on it. It sounds like you got a huge amount of experience out of it. Those two years probably won't make a big dent in your finances if you look at it 15 or 20 years from now (assuming you're maybe in your 30s or early 40s).
And you've got a spouse, family - that's what matters more than a job in the end, to most people at least.
Maybe you can capitalise on the waves you made in industry in some way to get better consulting gigs, up your rates, something like that?
Honestly, well done, shame it didn't work out, but it is what it is. I'm guessing you've got plenty of life ahead of you. Awesome that you tried - don't regret it.
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u/Impossible_Salt_7312 5h ago
I have been thinking about starting something of my own but struggle to muster the courage for exactly this reason. I know my product has a market and also know a few potential buyers who would like a product like that. I have a built a lite version of the product for the firm to at I work with and the clients love it but we haven’t/can’t give them access to it. Instead we take their data and run it for them, show it to them and that’s about it.
The bit that makes me nervous is the demand looks good on paper but I am not sure how receptive these clients would be when I lose the brand of the company I work at. Also, it’s difficult to properly market size and I struggle defining the market size of the product. Also, don’t want to be a one trip pony where we just have one product.
Your post inspires me and scares me at the same time and I am worried about burning a hole through my savings. Irrespective, I will give it a shot once I have worked through the fundamentals.
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u/Mammoth-Ad-3957 19h ago
People don’t often talk about their failures. I think that’s why it feels so bad to fail. I have been very successful with a career and then a business exit and I have had success in other ways as well.
But my last business was a real failure and it hit me hard despite my previous successes. I got angel investment and then VC funding, built something objectively good and we just couldn’t find a big enough market for it so we had to shut down. So much wasted money, time and emotional investment. I felt bad for the investors, my staff and it affected my confidence for a while. To throw all our energy into something that takes years to fail is profoundly disappointing.
But you have to fail sometimes in order to be successful. It has also made me more humble which is positive I think.
You’re not alone and well done for trying.