My Favourite Failure: Startup lessons from several failures that added up to a unicorn - Wayflyer Co-Founder Aidan Corbett

0:00Let me tell you a story. Four German friends met at university. One of their mates was a CTO at a small company who was stunned by the serious lack of process for recruitment or payroll and absolutely no software. in sight. It was so inefficient. This inspired the friends to found Personio. Since then, they've built it into an$8.5 billion company, Europe's biggest in the space. Not bad for a bunch of students, huh? The reason they've got so big is they solve a big problem for business leaders. They make tedious, time-consuming HR processes easy, so you can focus on more important things. Their software handles stuff like booking time off, of course, but also includes joined up experiences for hiring, onboarding, offboarding, reporting, you name it, they do it.

0:43So if you're leading a small or medium sized business and want to spend less time and effort on HR admin, then book a demo at personio.com forward slash secret leaders. That's personio.com forward slash secret leaders. There's a link in the show notes. A little bit of momentum is like kryptonite to an entrepreneur because you just want to believe and you're almost deliberately blinding yourself from negative news because you just want to believe and you just want to believe that you have it, you need to keep asking yourself the hard questions, especially when you have momentum. Aidan Corbett is the co-founder and CEO of Wayflyer, a unicorn, aka billion-dollar-plus valuation company, which provides funding for e-commerce companies just like my company, Heights.

1:29Not too shabby, but along the way, he tried and failed with various initiatives. We're doing this bite-sized series to learn from people like Aiden, sharing their failures because it's far more valuable than just hearing success stories. But this episode is slightly different to our usual. Instead of hearing about one big failure, we've got micro-failures, which add up to some pretty good startup lessons.

2:00A few years ago, Aiden and two others started a consultancy. They had an intriguing strategy, which Aidan still thinks is a good idea today. And I have to say, I agree. I do like the idea, especially if you're thinking about B2B. The best ideas come where there's a lot of founder market fit, where you've been in the space for a long period of time. And you spot that opportunity. Like with Wayfly right now, I mean, Jack and I as co-founders have been bouncing around e-commerce for years before we actually came up with the WaveFloor idea. It would have been really hard for us to come up with that idea if we weren't in and around e-commerce.

2:40So I think it's a great way to get to know a space, is to actually go in and start doing consulting projects, go in and start talking to people. You can't just interview a VP of engineering at a pharma company or a CFO in a pharma company. I think what you actually need to go in and do is you need to start doing projects. You need to be curious. And worst case scenario, you do a consulting project, and you get paid for it. That's the worst outcome. So you do de-risk yourself financially, and you have a much better way of finding good ideas. It's very hard to be sitting in your home on your own trying to come up with a great idea that doesn't affect you personally.

3:18And if you're sitting at home on your own, a B2B problem doesn't affect you personally. So it's really important to create that founder market fit. And one way of doing it, and one way of getting that background information at a really granular level is to go in and just start doing consulting projects. So that's what they did. They were doing consulting projects, waiting to find the right problem that they could turn into a startup. And they thought they'd found it. I was meeting people from lots of different verticals. So from in pharma, in e-commerce, and in this case, in the brewery industry.

3:51And we were talking to different business owners and CEOs about their data challenges. And we were speaking to the CEO of a craft brewery. It was a pretty successful craft brewery, one of the biggest in Ireland. And he was telling me that data integrity and data capture is actually incredibly important for craft brewers. Because if you want to be stocked in Lidl or in Tesco or in any of the major chains, they're going to do a pretty comprehensive data audit to make sure all the dials are at the right temperature, all the different types of liquid are in the right place for the right length of time, just to ensure that you're actually a legit operation, that you have the right kind of data capture and data recording so they can make sure that they can test your quality.

4:37And you may even need a certification on the back of that as well. And all of these craft breweries had LibreArch files of pages which had data collected on them. And we just thought it would be a really simple solution to actually put that in an app so that when the operator within the brewery is collecting all that information, they collected once within an app and then you can use that information yourself around your own quality control around your own different needs as an operator not just to have it as a record for tesco or or what have you so again the classic case of process done manually with pen and paper where data is collected move it into the cloud and huge amounts of value created or so we thought sounds like a good idea right they decided to build it out and sell it to brewers as a sas product or software as a service, but they'd made a fatal mistake.

5:30We were like, okay, we finally found something where we've a clear target market. There's no competition. It solves a problem. And it's daily. Like I love when there's a daily habit or we're a daily part of your day because it's so sticky and it's so hard to remove. So then we were at the point of, okay, we're at this now. Let's go to market and talk to other craft breweries and let's get this in a hundred breweries as quickly as we can. And the problem was that the average brewery that we approached was a lot more cost sensitive than the first brewery that we spoke to. And as a consequence, we weren't anywhere near in making the unit economics work because we were never going to get their own price.

6:13We were a factor of five out from where we needed to be. So we would like to sell that product for like 2 ,000 a month. we were getting quoted back at like you know three or four hundred a month max that they would pay for it and it was such a stupid mistake like the obvious mistake would be you know go out test cost you know cost sensitivity or just look at the profit and loss statement about the average craft brewery and actually see that most of them don't make a ton of money they're going to be incredibly price sensitive i didn't do that i just got really excited about the first craft where we spoke to who did have the funds, who were expanding rapidly and needed this.

6:50I didn't actually map that onto the market itself. So the one lesson for me was we had a product that was a painkiller rather than a vitamin, which was good. It had a daily habit. It had real product market fit, except from a pricing perspective. And we just shuttered it immediately after that. And it was a really simple mistake, but you get so excited when you have any traction or any momentum at all as an entrepreneur. And you just end up creating blind spots that you end up walking right past because you just don't want to see them. And if I stopped for like 10 minutes day one and spoken to six other craft brewers, probably would have killed the project.

7:27Aidan says you should check the vertical you're going after is nice and profitable. Makes sense. That was the first of the three learnings. The second relates to distribution, how to get your product to customers. Aidan says you should de-risk distribution in parallel to building your product, or you can end up in a position like he found himself in. There was another consulting project where I think we thought we had great product market fit. And it provided incredible value. It actually relates to distribution. It was a product for pharma companies. But pharma companies, we found them just so hard to reach.

8:05It was an incredibly hard to reach customer. And maybe you can do it. I'm sure there's a way of doing it. I think Viva have been very successful selling a CRM product into pharma, but we just found it absolutely impossible. It's just a really hard customer to reach and to get them to make a decision to create urgency. That was just incredibly difficult. So that was another learning where you think you're creating a ton of value. You can show that value, but if the customer doesn't have urgency or the customer is hard to reach or hard to get hold of, you're better off just letting it go. So that was another consulting project that ended up in failure.

8:44We had a few. We probably had five or six before we landed on the one we wanted to commercialize. So what's Aidan's final lesson for us? The third one would be try and build a painkiller rather than a vitamin. And the reason I would say that is it's way easier to sell a painkiller than a vitamin. So if you're solving the problem that keeps the customer awake at night, that's just so much easier. And it's so much easier because everything you do for marketing and sales will be so much more powerful. You don't even have to be that good at marketing and sales. You just have to solve the thing that keeps people awake at night because they're going to respond.

9:22And I would always say try and solve a painkiller rather than a vitamin. It just makes life a lot easier, particularly on a customer acquisition side. This is how Aidan and his co-founder Jack developed the concept for Wayflyer. Cash flow issues are what keep e-commerce merchants up at night. So they built a business to address that pain. Aidan has thrown a lot at the wall in his career and Wayflyer is one that's stuck. It means he sees failure differently to most. I think we need to reframe failure as being the norm, particularly when you're an entrepreneur. I don't know any entrepreneur who is like four for four with their ideas and everybody has failed.

10:04Like Drew Houston, who set up Dropbox, he had an SAT prep product before that. Mark Zuckerberg, when he was starting Facebook, was building another product on the side called Wirehog, which was a file sharing product that he was actually more excited about. So there are lots of, everybody has multiple products and everybody fails. And so seeing it as the default, rather than seeing it as a thing that happened to me and that I'm not good enough because I failed, it's the wrong lens through which to see it. And as a startup, there's a couple of things to bear in mind. The first of all is the world doesn't want you to exist.

10:43Nobody is on your side when you're starting up a business. And when the world doesn't want you to exist, that's going to be really difficult. And failure is the likely alternative. The second thing is, and this is a little bit contradictory, you still have to believe that you're going to make it. So holding that dichotomy in your head is very challenging. But the one thing I would say is we need to reframe it that like struggle and failure are the norm. And it's what you should expect. And of course, you don't think that at the very beginning. But ultimately, even when you talk to successful founders, I mean, I have three companies that I started that are running right now, Wayflower, Cubicle, which is doing very well, which is my first startup.

11:21Well, I've six, seven other products that I tried to launch that all failed. And as far as I can see, all entrepreneurs are like that. We've tons of things that we've buried in the back garden that didn't work. We just choose not to tell people about it. And I think it's just worth everybody realizing that.

11:42Aidan Corbett, reframing failure into the norm. Thanks for listening to this episode. I've been your host, Dan Murray-Surter. If you liked this episode, please hit follow or subscribe. See you next time.