MBA2655 The 5 Biggest Mistakes I've Made in Business (and how I fixed them)

0:00If you're in business long enough, you're going to screw up. It's just part of the game. It's inevitable. And if you haven't made any big mistakes yet, you're just not deep enough in the game, or maybe you haven't pushed yourself enough. Regardless, today I want to share with you the five biggest mistakes I've made in business, and more importantly, how I fixed them. Now, I'm not going to lie, this is a tough episode for me to record and to share publicly, because honestly, some of these mistakes are pretty atrocious and it cost me a lot of time, a lot of effort, but it's not about being perfect.

0:33It's about learning fast, faster than your consequences can catch you. These mistakes, they're real, they're painful. And like I mentioned, they cost me time. They cost me money. They cost me a lot of sleep. They cost me my hair, right? That's how I got all my gray hairs through the consequences of some of these mistakes. But each one of them helped me get sharper. It help me get smarter and more profitable at the end. So I'm going to share them in hopes they help you. Let's get into it.

1:09Welcome back to the$100 MBA show. I'm your host Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business. Mistake number one, following your passion instead of the marketplace. This one is a romantic one. You hear this advice constantly online, follow your passion and you can't go wrong. This is horrible advice in my experience. Horrible advice. Why? Because I've tried that. I've followed what I've loved. But the truth is the market doesn't care about what you love, what your passion is. It cares about the problems that need solving.

1:51That's it. All it cares about is if can you provide a solution to the problems, to the needs of the marketplace? I launched things that I was excited about, all kinds of businesses, but no one wanted to buy them or the business model was not sustainable. I didn't start with market demand. I started with me. And I also didn't look at the economics of the business. Let me give you an example. I started my business journey by doing arbitrage, which means that you become the middle person between a buyer and a seller. And I was really passionate and I loved basketball and I love basketball sneakers.

2:31And I started with rare Air Jordans. So I would find a buyer, somebody that would want to buy a pair of Air Jordans, a particular model, and I would find somebody who's selling those Jordans and then basically mark up the price and sell it to somebody who is interested. And I made money in that process. And it was my first trial of making money outside my paycheck, right, outside of a job. In essence, I was making a lot of effort. I was working really hard for very little profit. it. And I wasn't really building an asset that can benefit me in the future, right? I was basically just doing labor, exchanging time for money.

3:11Yeah, I can get other people to do it. But at the end of the day, you know, what overtook was eBay got popular and people just didn't need me anymore. And the pain was not there. People didn't need me solving that pain because I can easily solve that pain by either selling their shoes or buying their shoes on eBay. Now there's all kinds of eBay and eBay clones and ones that are specific to genuine products like StockX. But now what I learned through that experience, even though I was passionate about this idea and I loved sneakers and I loved Jordans and all that kind of stuff, I really didn't look at the long-term plan of my business.

3:46I also didn't look if the pain was painful enough. Now when I look at starting anything, a business, an idea, a marketing strategy, I look for pain. What are people already frustrated by? What are they paying to solve? And how can I solve it better? How can I solve it in my own valuable, unique way? Now I say, don't follow your passion. Follow problems. That's where the money lives. Mistake number two, following the market without asking, do I want to do this? This is kind of the opposite of the first mistake, which is interesting.

4:24It's checking in with myself. If I actually want to do this business, if I enjoyed it, I saw a need, I filled it and it worked. The business I had was a custom clothing line for men. So men would send their measurements. I would custom tailor clothing for them and send it out to them, right? This was hugely in demand. People love this product. They love the business. This is circa 2009. So there was a lot of options out there in terms of online shopping for people that are like tall or large men. But after about a few years of running this business and having four warehouse locations and selling in so many contents across the world, I never stopped to ask and say, do I even want to be doing this?

5:09Just because people want something, just because there's a need in the market doesn't mean you should be the one to build it. There's something called product market fit. Does your product fit the market? And that's kind of that first thing I talked about the first mistake I made. But there's also product founder fit. Does the product or the business that you're building fit you? Do you enjoy it? Do you actually like what you do every day in this business? A successful business requires a daily effort. You better enjoy that grind. You better enjoy that journey because you're going to need to enjoy it to be able to sustain that journey, to be able to outlast your competition.

5:47And this is why one of my biggest successes in business is my software company, Webinar Ninja. I loved doing webinars. I was a teacher for 10 years in the classroom. I love technology. I love solving a problem. I love working with people. I love working with talented people. And that's what I had to do every single day in this business. There was a problem to be solved. And I enjoyed the day to day. I enjoyed the grind of it, the challenge of it. And that's a great intersection. Market need, personal interest, that's a sustainable business okay so it's not just enough for you to have a business that fulfills a need or solves a problem or pain and it fulfills a need in the marketplace you also need to fulfill your own needs right you need to love what you do every day because you're going to need to because it's going to get hard and if you don't enjoy it at some level it's going to be hard to keep going.

6:43Mistake number three, trying to be a solopreneur hero. This take might be quite controversial. This one might sting you a little bit. And, you know, early on, I was bought into the solopreneur fantasy. Do it all yourself. Be lean, be scrappy, own every part, you know, and reap all the benefits, all the profits. Sounds great, right? Sounds noble even, right? But the reality is, in the real world, in the market, when everything's equal, teams beat solopreneurs every day of the week and twice on Sunday. It's not even close, okay? And the reason for that is because you are only one person with 24 hours in the day.

7:21You only have a certain number of skills, you only have a certain number of energy, you only have a certain number of talents, okay? You can't be everybody to everything. You need the leverage of other people's skills and talents and information and just know-how and energy. When I try to solopreneur it, I hit a plateau because I was the bottleneck. I was also the single point of failure. If anything went wrong, it was on me. And I had no backup plan. I couldn't grow because I couldn't clone myself. That's just how it is, right? How I fix this, how did I remedy this? I changed my mindset. I changed one key question.

7:58I went from how can I do this? and I change that to who can help me do this? Who can get me there faster? When I start any new project now, I ask myself, what team do I need to build to make this wildly successful? Listen, you don't need a huge team, but you need to start thinking in terms of a team, even if it's just one hire, a VA, a contractor, a partner, anything to multiply your time, your skills and your output. As soon as you make one hire, everything doubles. Your time, your energy, your know-how, right? Your skills. Now you have skills that you never had before because you have another team member, right?

8:38And when I started hiring and when I started delegating properly, revenue scaled. Crazy idea, right? Quality improved. And I actually got my life back. I actually enjoyed what I did more because I got to do more of what I love. Because in the beginning, when I was starting out, I was doing everything myself. Everything included things I couldn't stand, the things I dreaded, the things I would grind my teeth through. And when you hire, you can get somebody else to do that stuff. Okay. In my opinion, entrepreneurship, the beauty of entrepreneurship is that you get to leverage other people's skills and talents and abilities so that you can become bigger than yourself.

9:16And that's what's amazing about business is that you You get to build something that is beyond your abilities, right? That's what's cool about it. Like, to be honest with you, I built a software company for 10 years, Webinar Ninja. We got acquired, life-changing exit. Not possible without a team. Just not possible because I'm only one person and I built something that was incredibly beyond what I would be able to build by myself. And that's why it was valuable. Even if you have no plans of selling your business, even if you just want to run your business down to the ground until you, you know, your last waking day, that's totally fine.

9:50And you don't just want to fund your lifestyle, but your lifestyle and your business can do way better when you have a team. And I get it. There are, you know, challenges managing people and their headaches and there's some issues and there's, you know, company culture you got to build. But in my experience, in my extensive experience, the negatives and the challenges are so much less than the positives, okay? They pale in a comparison. What you get in return, it makes all those things look like a joke, okay? So in my opinion, if you want to build a strong, sustainable, valuable, high-profit business, start thinking about how you can scale, how you can build a team around what you do.

10:34Mistake number four, building before validating. This one's a classic. This one's as old as time, right? And so many entrepreneurs make this mistake. I made this mistake myself. I built something called the DIY webinar guide. It was a product I believed in. I poured so much effort in it. Nicole and I, I say I, but it was Nicole, my partner in business and life. We spent four months building this project. We built, you know, a incredible guide and workbook companion along with video courses and just a whole bunch of great resources that go with it, templates. But I never validated this idea, right?

11:10But I just really believed in it. I was like, this is going to be great. I just know it, you know, because I run webinars. I'm going to show people how to run webinars properly and how to put together the tech and all that kind of stuff, right? I didn't do anything to validate this product. I didn't pre-sell it. I didn't test it. I did nothing, right? And the results I launched after four months of work and we launched two crickets, basically. We had two sales, okay? First one was a chargeback, actually, which means it was fraud and we had to return the money. The second one was a sympathy sale from a friend of mine who was just curious on what I was doing.

11:46John Lee Dumas, who's the host of Entrepreneurs on Fire. Shout out to John for supporting me back in the day. But it was a wake-up call, and it was that moment that Ben Horowitz talks about in his book, The Hard Thing About Hard Things. Sometimes you've got to create a bad product to create a great one. That was the wake up call I needed. It made me realize, oh, man, I didn't validate this idea. People don't want this. People don't want to know how to put together all the tech and create their webinars. They want a tool actually to make it easy for them. And that's what spurred the idea of starting my software company, Webinar Ninja.

12:21So instead of repeating this mistake, we validated that people actually wanted Webinar Ninja first. We created a quick landing page, We designed some mock-ups. We put some copy together and a video together to say, hey, this is what Webinar Ninja solves. This is what it does. This is what it's going to do. And you can reserve your spot, 250 beta spots, by putting down a deposit, and you'll get first access. And that's how we validated it. We sold out all 250 spots in like 72 hours. That was my green light that, okay, validation. Here we go. Just the promise of solving this problem got people excited.

12:55And they don't even have the software yet. In four months, they would have it. And that was the capital I needed to build something that was actually significant. And that pre-sale practice became what I did from that time moving forward back in 2014 when I started Webinar Ninja. And anytime I start any kind of project, I do this because it taught me a tough lesson, but a good lesson that, hey, you've got to validate that the market actually wants this before you start building. Money talks louder than any survey, than any responses, in my opinion. So make sure people are willing to part with their dollars for this.

13:31So as simple as if you're selling custom-made t-shirts and somebody sees your t-shirt and they say, oh, that's an awesome t-shirt. Can I buy one from you? I know that you're creating t-shirts. Great. No problem. I'll make it for you. Give me$20 right now. Venmo me. Send it to me on a bank app, whatever, as a deposit. And then you can pay me the other$20 when you get the t-shirt. If they say, yeah, here's 20 bucks, you know that this is a real business. You know that people actually want this. if they say oh i don't know let me think about it it's not a hell yeah and you got to keep on moving until you get people that will say yes here's 20 bucks and they can't wait to give it to you mistake number five ignoring the numbers this one this one took me some time to really understand but once i did it became a way of life okay early in business i just thought just keep creating, just keep growing, and the money will follow.

14:25But I didn't know the ins and outs of my numbers very, very well. I didn't track my cash flow, my profit margins, my expenses, my LTV, which is lifetime value of our customer. I was flying blind, no dashboard to see if I'm going in the right direction, right? Then I had a wake up call, right? I was generating six figures in revenue, but barely seeing any profit. It was like running on a treadmill that printed receipts, but didn't build wealth, right? How did I fix it? I got serious about my finances, especially my P &L sheet. My profit and loss sheet is something that I looked at weekly. In the beginning, honestly, I looked at it daily, okay?

15:05Actually, I hired a fractional CFO, chief financial officer, to help me build a great, easy-to-use P &L sheet. I reviewed my monthly reports. I tracked all my key metrics, like MRR and CAC and LTV and net margins and all that kind of stuff. And all of a sudden, guess what? When you focus on something, everything got clear. I can make better decisions. I could cut what wasn't working. I could scale with confidence. I knew that I could afford to make that higher or take my team on a team retreat. If you don't know your numbers, you don't know your business. That's just the bottom line, okay? And by the way, if this is something that's kind of scaring you a little bit and like, maybe I don't know my numbers, I got your back.

15:44You know that PNL she just talked about that I built with my CFO, I actually made it a template and I offer it to everybody for free. So just go to 100mba.net slash template and you can download it for free. Super simple. It's along with all the other templates that we offer for free. But the point I'm making here is that business is numbers. Business is money. That's it. Bottom line. Okay. If your numbers are healthy, you can survive. You can grow. You can change. You can have new products. You can have new services. You can move into a new market. Your numbers are not healthy. You can't do anything, okay?

16:16Your business is going down. And that's just the bottom line. That's just the truth of it. And as much as we want to ignore numbers and be creative, it's a recipe for disaster. So in my experience, make your numbers a priority. Know them so that you can be in control. So quick recap of my five big mistakes that I shared with you today. falling passion without market validation. Horrible idea, but what you should do is follow the pain, okay? Number two, chasing the market without asking what I want, what will make me happy, what will I enjoy doing day-to-day. Number three, doing it all myself, being a solopreneur.

16:55I know that's controversial, but building a team makes you a superhero, right? Makes your business exponentially more successful. Also, I like to change the wording. Like I said, I say, how can I do it? Who could help me do this instead? Try to be a little bit allergic to trying to take on everything. Number four, building before validating, right? Now you got to make sure you validate pre-sell if you can. And number five, ignoring the numbers. Manage cash flow like it's oxygen because it is, okay? So make sure you avoid all five. Here are some things I want to leave you with. Mistakes are just tuition payments for the lessons you actually remember, okay?

17:34That's what I found in my experience. So even if you continue to make a few mistakes, that's okay. See it as a learning. Don't repeat them. Okay? Here's the key. You don't have to make every mistake yourself. If you can learn from others, like you did from my mistakes today, you shortcut the path to success. I learned this by reading a lot of biographies, a lot of books, a lot of stories of other entrepreneurs helped me fast track my success. That's why I share this today with you. not to look back and say, woe to me, but to look forward for to help you as you move forward. Business, again, is not about perfection.

18:11It's about course correction. That didn't work out. Let me do this. That kind of worked. Let me see how I can improve it. That kind of stuff, right? So if you're making one of these mistakes today that I just shared with you right now, it's okay. What matters is what you do next, right? How you remedy it. Don't ignore it. Take action. Thanks for making it this far in the episode. you're my kind of person means that you care. You want to build, you want to grow, you want to become something of yourself. You're competitive with yourself, which I love that you don't let yourself off the hook. You make sure you complete the episode.

18:43That's amazing. If you found today's episode helpful and you want more practical business lessons to help you start, grow and scale your business, the best thing you could do is subscribe to this podcast. Hit subscribe or follow on your favorite podcast app, the one that you're using right now, whether it's Apple or Spotify or wherever you listen to podcasts. By hitting subscribe, you get our next episode automatically, and it's the best way to support the show. It's absolutely free, and it's a way for you to commit to growing your business. And now that you've subscribed, I'll check you in the next episode.