My Favourite Failure: We were too young, idealistic and couldn’t turn it off - Young Han

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0:40And they're used by thousands of companies like Lush, Spendesk, and Mindful Chef, so you know you're in good hands. So, 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. Even now, I look back at that experience and I glean lessons from it. It was all pragmatic lessons, right? Like in the moment. These mindset lessons that actually make bigger impacts on my ability to build business and make money now have been gleaned even now.

1:21Like almost a decade later, I'm still gleaning lessons from it. Young Han grew up in Silicon Valley and worked in tech before moving to Texas a few years ago for a slower way of life. In this most recent chapter, he's really got into small businesses. like a pool cleaning company which he scaled to$1 million in revenue in 10 months. He's a coach, tech consultant and founder himself. He's a fan of taking as many shots as you can and failing fast. But one of his companies, Go Volunteer, didn't fail fast. In fact, it took him and his co-founders nine years to go from deciding it wasn't actually working to switching it off.

1:59What happened?

2:05Here's the thing about Young. He loves starting businesses.

2:35Or a medical example is I got really close to the bone. So I am ready to pull back. So I'm selling a couple assets as we speak because I think I hit my limit and I think I can manage eight really successfully. But long story short, I was just sharing with you that failure is very common here. And definitely in Silicon Valley, we adopt the concept of failure being a badge of honor. And it's a very noble thing to do. And you learn so much more from failing and iterating. And you're able to achieve success at a much more faster rate if you can fail faster, right? fail more often and fail faster. If you think about it from a long-term goal of succeeding and success, you want to have as many at-bats as possible and failure is just an outcome of that.

3:13Yeah, but what was the company Young didn't fail so fast? The business is called Go Volunteer and we basically named it literally what it was. So it's essentially a volunteering network platform. Me and a couple of my friends, one worked in the government, one worked at a big tech company and I worked at a big tech company. And internally, we started looking at all these volunteer initiatives that we found inside of these companies. And we started talking to our friends at Facebook and Yahoo and all these other places. And essentially, we realized that a lot of corporate volunteerism was based on this fact that there's all these studies that show that people are happier, increases engagement and retention and all these other things.

3:53But they're just done incredibly poorly. And then when we realized that we found out how much people were paying for these softwares, and it's kind of mind blowing for nonprofits in the US to find out that these tech companies are paying, you know,$8 per head per month. Like, for example, like Cisco was paying like$2 million a year, I think, to Salesforce to basically just manage employee volunteerism. They have a new version of Salesforce called Volunteer Force, and it just tracks employee volunteer engagement. And these nonprofits are probably like, why don't you just give us that money? And nobody uses it, right?

4:27Nobody uses it. And the engagement and retention is super low. And so we were trying to build a better version of that. They grew the user base pretty strongly. They got over 50 ,000 volunteers, the largest network in Northern California. But then, as Young told me, it all went to hell. And he remembers when he realized they were in trouble. As soon as I started to try to sell the enterprise, as an as a wiser and more mature uh professional i look back at myself and i go what an idiot i was because i don't know why i thought it would be so easy to sell to these big corporations uh it's just not they change the the the point of contact changes roles um there's a ton of bureaucracy uh there's a lot of like there's just a lot of core skills to enterprise sales and i had none of them And in looking back, I mean, I know so much more about enterprise sales now because I've had all these experiences with companies that have done it.

5:22And I still don't feel like I'm good at it. Yet I was trying to tackle this as this, you know, wet behind the ears, you know, like entrepreneur builder and like, oh, it'll be easy. And it was not. And I quickly found out that the average sales cycle was year plus. And the amount of money we would have to raise to even get a proof of concept or an LOI for an unproven product was probably a year and a half. and the, you know, the way that we could sell that would have to be a discounted rate. And all of these different things I started to learn very, very quickly as I started to go down this road.

5:55And so we went from raising a, we went to go raise a seed round of, uh, I think$500 ,000. And we quickly realized that that was literally just burning money because we would need at least a year and a half of run rate to even possibly see one sales cycle through. And so I'm like, oh, we need to raise like a million dollars to actually fill out the product, do the implementations, because we got a couple of big POCs. So we had some really big heavy hitters. So we were talking to Yelp. Yelp really was interested in launching this thing called Yelp Helps. And so once a, once a, once a, one month a year, they wanted to activate all their Yelpers to do volunteer work.

6:37They had no system to activate this. And they're like, hey, you could be our Yelp Helper program for the nation. Let's test you out in Silicon Valley. We're like, great. And, you know, they sent 6 million Yelpers to our platform and it literally crashed the site for two days straight. It was so embarrassing. And we literally were like, oh my God. And then Yelp's like, we still like you guys, but you guys really need to fix this. And here's our, you know, a rec list of things that we need to fix. And I'm like, that's like$400 ,000 worth of stuff that we would need to fix. And, you know, and we're just like, wait, that's crazy.

7:09Given the sales cycle, the tech costs and everything else, Young and his team realized they needed a lot more money than they first thought. Probably a million dollars, but at least 800 grand. They got 400 grand committed. I gave the money back to the investors. I said, hey, this doesn't seem like a good, I don't want to take your money. Because at this stage, these are like angel investors. These are like my advisors. These are my mentors, right? And so I'm like, I know for a fact that it's a huge risk, even at a million dollars, 800 is already like a huge risk. So you me taking 400 and not being able to raise the 800, it just doesn't feel good.

7:47I don't feel ethical about it. And so I basically just told my co-founders, I said, Hey, I'm going to continue to try to build this, but we should scrap it. You guys are more than welcome to stop. I'm going to bootstrap this for a little bit and just try to build this on my own and just like go work somewhere like part-time and try to make my ends meet. But I believe in this and love this. I'm going to go try it. And my co-founder said, we want to do the same. And so we returned the money and we tried to bootstrap it. And we did that for about a year, the three of us, and we all just work part-time jobs and try to build it.

8:17And the main reason was because our bleeding hearts, we were young and idealistic. And we just had so many volunteer hours going into the community. There was like seven, 7 ,000 hours a month that we're contributing to the world. And we're like, we just can't turn it off. And we just felt like we felt like morally obligated to the world to continue to support those hours of volunteer work. And so anyways, in hindsight, we should have ended it sooner. You can understand why they didn't though. They stopped working on it properly after a year, but continued to keep it alive, paying the server costs out of their own pockets until last year, nine years on, when they decided to properly call it quits.

9:02And quitting is something Young thinks founders should do a lot more of. Learn to quit. Learn to quit. It's okay. It's not a big deal. And I know that you have to believe in it. You have to fight. You have to be passionate about what you want and you have to strive for it. And, you know, all these war stories of like founders that are like sleeping in their car and their trunk with like, you know, one day of run rate left and then they start and then they get a like Evernote story, Guitar Hero story. Like, I mean, I could rattle off every single major tech company that you know of has the story, right?

9:34Where they like battled it to the bitter end. I just, in hindsight, I just disagree with that now. I used to, I used to believe in it so much because I thought I was going to be the Zuckerberg, right? But it's just, we need to be okay with the fact that like, you need to assess more than just your business and startup and really calculate life and figure out what you want and then cut losses when it doesn't work. And so I come up with this thing called the XYZ. And so it's like, what do I want to achieve by what time for what result? And if I don't achieve it, then I literally do another XYZ. I say, okay, great.

10:10That didn't work. So do I want to do another six months of this? And for what result, you know, for what time, for what result or three months of this? And I try to like basically time box things into these XYZs. And it's helped me be much better about saying, hey, I'm going to stop that business or I'm going to fail it. I'm going to start a new business. It's okay. Like, cause I'm just like creating these X, Y, Zs for myself and putting these kind of rigorous discipline, rigorous discipline on myself as I build these businesses. So it's not so emotional and personal because you can get caught up in your business very, very quickly.

10:45It becomes a kid, you know, it becomes your baby and it's very emotional and very visceral and it can take you to very deep places and make you sacrifice more than you have. Young is of course much more reflective and experienced now 10 years on. But at the time, it knocked him for six, which is exactly how he was advised to feel. I was definitely sad and hurt and upset and disappointed. And I really leaned into it. I just let myself be this is where I learned this skill where you like you know you don't try to like you know just go like this you just like lean into it and so I just like I got really good advice though I mean I lived in Silicon Valley where most of my friends had failed businesses and they all basically just like were very good at saying like hey there's a lot this is kind of a morbid story but there's quite a bit of suicide among founders in Silicon Valley right that fail they have these public rises and then they fail and it actually happens a lot more than people realize.

11:45But there was a lot of feedback from a lot of my friends and other founders that were like, hey, just lean into it, lean into the failure and like just be miserable as fast as you possibly can. And I thought that was the weirdest thing because, you know, you would hear people say like, hey, it's OK, like get back on the horse or you're going to be fine. And like these founders were like, no, be miserable, get drunk and like grow a beard and like don't shower for six weeks and just be an absolute like just depressed monster. And it was really good advice because you went through the emotional journey of failure and loss much faster by just leaning into it and just being fully depressed.

12:23And I was able to come out of it very, very quickly and then take those lessons and knocks and move on to my next project. He took with him several things which weren't directly about business building? Co-founders are more important than your business. I also learned that your partner is more important than your co-founders to your business. And so these are very non-business related things that I learned, but these are my epiphanies that I've learned. And so it's been a really, really interesting search for me to find my wife, because in that experience, I realized how important your network and support system is because things don't always go well.

13:07More often than not, your business is going to be very, very hard. And who you have around you is more critical to that business success than the product, the market, the business model. All of these things are super important. And we can obviously belabor it with a million different shows and podcasts and theses and pundits and experts. But the biggest insight I gleaned from that experience was that it's going to get hard. So surround yourself with great co-founders that, you know, you share the same values and ethics and drive and grit with, and also find a great partner. Because once your co-founders go home and they go to sleep, like you have to go back home and live your personal life.

13:48And you want someone that's going to be a cheerleader when you're down, you know, a, you know, a grounder when you're up, you know, kind of stabilizes you and make sure that you are, you know, living this incredibly erratic life. And they're the ones that are able to like smooth it out for you and support your vision because it's a very lonely and hard journey.

14:13Young and his co-founders became best mates. They were best men at each other's weddings, having been bonded by this experience of failure. So they lost the battle, but won the war. That was Young Han, a master of failing fast and grieving fast.

14:34Thanks 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.