When I stumbled onto the idea for a one-day painting franchise in 2010, it seemed like the perfect new venture. My company, 1-800-GOT-JUNK? was growing steadily, and with 22 years of entrepreneurial experience at that point, I was sure that getting another company off the ground would be a breeze.
But it didn't work out that way. Six months in, WOW 1 DAY PAINTING was $2 million in the hole and we were scrambling. I've seen the same thing happen among our franchise partners: people who were all-stars when it came to running 1-800-GOT-JUNK? but who struggled with their second venture.
The so-called sophomore slump is a common problem. Even successful entrepreneurs regularly flop the second time around, usually because they've failed to give their new venture the same care and attention as the first. It's an arrogance that can be fatal.
Luckily, I was able to turn things around with WOW 1 DAY PAINTING and went on to start a third and fourth business (You Move Me and Shack Shine), with these lessons from my near-failure in mind.
Be willing to be the dumbest guy in the room
When I started my first business, I was more than a little green, constantly trying to learn everything about the world of entrepreneurship. My inexperience felt like a weakness at the time, but now I realize it's what forced me to ask questions and it pushed me to polish my craft.
Once you're an established entrepreneur, embrace that same eagerness to absorb knowledge for project number two. My downfall with WOW 1 DAY PAINTING was not putting in enough effort to educate myself about the many differences between junk hauling and painting. It was only when I admitted to myself that I didn't have all the answers that the business began to turn around.
See the glass as half-empty
I'm an optimist by nature, but in the midst of a sophomore startup, that's not necessarily a good thing. A positive attitude can impress stakeholders, but if you don't admit to yourself that there's a possibility of failure, you won't have the same fight to succeed.
Being successful the first time doesn't necessarily guarantee things will work again. Napster's Sean Parker failed with his second venture, Airtime, a video chat service. Richard Branson couldn't use the Virgin name to turn lines of lingerie, wedding dresses, and soda pop into smash hits.
The lesson here is that nothing is certain. When you expect the worst-case scenario, you're better prepared to survive - and thrive.
Remember that money can't buy heart
It can be tempting to throw money at a new venture: after all, it's a resource you didn't have in the early days of your first business. But although money can accelerate progress to a certain degree, it can't buy passion - and customers can tell.
Zipcar's spin-off venture, GoLoco, was a flop because it was clearly a side project. Sure, it was slick, but there just wasn't the same love poured into it that Zipcar had accumulated over time as a scrappy startup.
Make sure you're investing with your heart - not just with your check book.
I learned these lessons the hard way, taking WOW 1 DAY PAINTING to the brink of failure ... and back. Some people wanted to give up on it altogether, and I can't blame them. But I'm glad I snapped out of my sophomore daze and embraced the new project in time. Today, it's a multi-million dollar company - and stands as a lesson to never assume you know it all.