More Lessons From a Bootstrapping Disaster
BY Matt Cooper
Running a canoe rental business in Mississippi wasn't easy. Here, oDesk vice president Matt Cooper shares his insights.
In my previous post,I discussed some of the bootstrapping basics I overlooked in getting my old family business, Soggy Bottom Canoe and Kayak Rental, off the ground. To dig a little deeper and offer another perspective, I went to my best source of personal and professional advice--my father, who happens to be an executive coach and former global general manager of HP. I gathered some highlights here, but the key points follow below.
Emotional Decisions Don't Make for Good Business.
Launching Soggy Bottom with my Uncle was an emotional decision, not a decision grounded in reality. I rushed into the decision without analyzing the opportunity and developing a long-term plan. In my romantic view, I'd help him launch the business over the summer, then sit back and watch the checks roll in. I didn't do my due diligence and knew very little about the location, competition, or anything else for that matter. As my father put it, the decision to help out my uncle, who was going through a rough time, may have "earned points in Heaven, but not on earth."
Stuff Happens. Be Ready.
Having done years of financial projections for Fortune 500 companies, I had the most advanced projection model ever developed for a canoe rental business. Unfortunately, it was pure fiction since I had no real data to base it on. For example, I projected a nice even rental volume and failed to realize that 50 percent of a season's revenue would come from three holiday weekends--Memorial Day, July 4th, and Labor Day.
Don't Underestimate the Competition.
Our primary competition was Black Creek Canoe Rental, a fixture in the area for more than 30 years. While we had a better facility, better equipment, and better service, they were still the incumbent. I failed to realize the market probably could not support two players. Some of our clients said they grew up going to Black Creek and gave us a try on a whim. But it was difficult to build a sustainable business when they had the market cornered. This should have been obvious going in and we either should have built a strategy to compete or pursued a different direction altogether.
Location Is Everything.
We had a beautiful location on the best stretch of water, but I failed to realize the competition was much closer to the highway, while ours required winding around country roads just to get to Soggy Bottom. Worse still, the most common route to our business location took customers past Black Creek. It didn't matter that our location delivered the better experience. It was literally leading customers to our competitor's door.
Family Businesses Are Delicate Affairs.
I wanted to be the financier and instigator, then a passive investor. I didn't have the time or inclination to dedicate myself. My uncle wanted to be the owner and operator, but didn't have the finances or know-how. My parents jumped in to help keep it alive, but they weren't able to make the investments needed to make it viable (living 500 miles away also didn't help). We should have sat down, discussed all of this, and documented it on Day One.
The Memories Were Worth It
Despite our long string of mistakes, when it was good, it was magical. I still smile when I think about driving a van full of kids out to the river in the Mississippi heat. While Soggy Bottom was ultimately a failure, taking a 10 acre dirt lot and turning it into a business was a great feeling. More importantly, I've taken the lessons I learned and applied them to other ventures.
Don't tell my wife, but I'd give it another shot in a heartbeat.