Samuel Cook: How to Recover from Setbacks in Business (S2 Ep1)

Podcast Details:

Date Added: 26th Jan 2016

Length: 72 min, 1 sec

Summary:

Welcome to a whole new season of Project Kazimierz! A lot has changed in 2 months. Samuel Cook tells us about a tough business decision he had to make, and how he recovered from the fallout. Who’d have guessed that consulting world-class triathlon coaches would eventually lead to arriving in Cracow? Sam talks about building a team here to expand the business, about traveling to Silicon Valley for investments, and about pivoting into a brand new market.

Mentions and links:
Table of contents:
  • 07:07 Intro
  • 12:03 The surprising upside of being an interviewee
  • 12:48 Richard’s crazy consumption of podcasts
  • 13:33 The reason for the season break
TEDxKazimierz
  • 16:18 Technology revolution
  • 17:50 Be a before and after story of TEDxKazimierz
  • 20:36 The culture of Fail Fast
Sam’s Recent Adventures
  • 22:15 The story of Sam’s business turmoil
  • 24:09 Sales figures for Sam’s triathlon camps
  • 27:04 One of Sam’s weaknesses in business
  • 29:31 Lessons from NYC and Silicon Valley
  • 31:21 When to raise money
  • 40:46 How Sam built his email list of 40 000
  • 44:36 Sam’s offer to anyone listening
Dealing With the Fallout
  • 46:13 How Sam overcame the emotional battle
  • 46:56 The value of failure
  • 53:34 When is it time to cut staff?
  • 53:54 Taking control of bad news
Looking Ahead to Season 2
  • 1:01:24 Sponsorships for Project Kazimierz
  • 1:02:17 Tell us about community announcements
  • 1:08:57 Outro

Transcript:

07:07
sam cook:
Hello again, Project TEDxKazimierzimierz, this is Sam Cook again, back here with another episode, after a little bit of a break, with my co­host­ Richard Lucas.
07:16
richard lucas:
Good afternoon, everyone. If it’s afternoon, when you’re listening.
07:19
Samuel Cook:
And, Richard, with your trademark intro. We’re actually doing something a little bit different today. We’re starting another season, as we call it. We just realized we’re on 20 episodes of Project Kazimierz and we think it’s a great time to look back, see how the first 6 months have gone. We’ve been out here already six months. And just kind of review how the first season went, where we’re at and where we want to take things. And the other thing, speaking of starting a new season, I was going talk about a topic called “Starting over”, which is part of the entrepreneurial journey and we’ll go into that in a little while, where I’ll be talking about some of my experiences recently … and starting over. And, we’ll get started here. So, Richard, reviewing here the first episode, first season of Project Kazimierz we have over 12 000 downloads of the show. We have listeners in over 60 different countries. Tell me, what are your reflections on the first 20 episodes, or first 19 episodes leading into this. What do you think you’ve learned about podcasting in general and the ecosystem here in Kraków, Poland and in Central Europe.
08:47
Richard:
Okay, so you’ve asked several questions at once. As everyone, who’s done podcasting tells you, it’s like blogging, you have to be disciplined, you have to keep up the production. If you go into iTunes and you look, there are many, many interesting podcasts, like “Fader” or “405” issues, or edition. So, one is discipline. We’re just keeping ahead of the curve, but we need to keep ourselves focused to get another set. So, that’s one thing. About the local community, I would say: some of the people who you think are going to be easy to get turn out to be quite inaccessible, and other people, who you think might be too important or busy, are very willing. It’s been interesting dealing with some of the PR people. This is Polish/German tradition of allowing the people you interview to authorize their interview, which is completely alien to the British/American journalistic culture, where it’s the most unethical. It’s like we feel you’re letting someone censor you. We’ve once or twice had to do that. It’s enjoyable, though. One very satisfying thing was when an employee or two of Brainly told me, that the CEO Michal Borkowski, they learned more about him as a leader, than they learn day-to-day, because they don’t get him for an hour, talking at length about his approach to the business. So, sometimes it’s been extremely satisfying to do the things for the people we’re interviewing, as well as for the community, as well as helping the communication of the wider world.
10:26
Samuel Cook:
One other thing that struck me, you know the community a lot better, is just the depth of knowledge in a lot of different areas from Wojciech Burkot and Ramon Tancinco to the multinational level… Wojciech, he’s been with Google and Piotr Willam and all the different people we’ve spoken to, I’ve just been really impressed with the overall ecosystem and what’s been developing here, we’ve seen that unfold in the last 6 months since this show’s been going.
10:59
Richard:
I think we’ve worked out a checklist of what you have to be doing to get on the show. As with TED and TEDx talks, either the person has a spectacularly interesting idea or project, if they’re important locally in the Kazimierz, Krakow region – that’s a definite tick. If they’re doing something pretty impressive, either in Poland as a whole… for example we had Ralph Talmont from TEDxWarsaw also on, or the podcasts. There’s a slightly higher threshold for the rest of the world. There should either be a Poland connection or something really impressive, so… with Will Bunker or Peter Cowley – angel investor of the year. It’s a great excuse to talk to people. If you’re interested in someone. On my list of things, if I’ve found something interesting, or they’ve got a cool story, that maybe, maybe is a subject to my co-host Sam’s agreement, then maybe we can bring them on the show. Because Sam has exactly the same experience.
12:03
Sam:
I think podcasting is an excuse to talk to people for longer than you really have usually on your schedule to talk to. It’s kind of a forcing mechanism to get people to focus, which I think is a precious commodity in the digitally age. It’s someone’s time and their focus on their thoughts and background and experiences.
12:28
Richard:
We’ve also learned.. It was very interesting for me. You have this sense of slightly pushing beyond what’s normal. YouTube is very well known in Poland and people understand digital media, but because of the Polish being a minority language, podcasting just isn’t that big in Poland yet. I get a lot of my information from podcasts – when I’m driving, cooking, in the bath. Even when I’m reading I’d have a podcast in the background. And usually, when I go to sleep I have some digital podcast on. That’s not an experience that many Polish people have. Because it’s about local community, you have a lot of people start listening to our podcast, because it’s about someone they know and then: “Hey! Podcasting, that’s interesting.”. They discover this incredible resource, like an encyclopedia, or a library of podcast. It’s huge.
13:22
Sam:
I’ve had a couple of friends here in Poland, that’ve downloaded the podcast app and now they’re hooked on many different things beyond this show and it’s been really interesting. So, looking ahead to season two, Richard, I guess, we call a season 20 episodes and this is the time, that we’ve taken due to my recent travels and some business things I had going on, to take a little bit of a break. We’re about to reset and start on the new season. What do we wanna do differently, better or change, going forward?
13:55
Richard:
One thing is that we’re experienced in different walks of life and both read The Economist and are well up to speed with what’s going on in the world, but I think perhaps we need to do more to brief interviewees about our expectations. Sometimes it’s not an issue, but sometimes we could do better. I’m not updating my show note process, but when I’m doing it, I think the show notes are very useful and if we’re referring to TED talks, or organizations, or movements, or other podcasts, it’s a good idea to do that. Probably, we need to get better sourcing talks, sourcing interviewees, we’re relying on a personal network. Anyone listening, who thinks there’s a really interesting person with an interesting project… actually, later today on the 24th of October 2015, if you’re listening thousands of years in the future. Today we’re having, possibly a world’s first speaker-researcher-a-thon for TEDxKazimierz, since we were last on air, or on digital, whatever it is when you’re on the Internet, if you’re listening over cable. We have the license renewed for TEDxKazimierz, which we’ll be doing in 2016, we’re also developing a methodology of how to source great people projects and ideas for TEDxKazimierz and of course it’s very similar type of objective to Project Kazimierz, even though Project Kazimierz mainly focuses on entrepreneurship, tech, business more than other walks of life. But perhaps that’s something we can consider, Sam. Do you think we should broaden our target group of stick to those core…
15:45
Sam:
I don’t know… I’d love to hear the comments, if you’re listening to this, please do send us some comments and let us know. For me, I think, tech and innovation is a way to solve problems in people’s life and there’s a broad array of problems, that people have and someone we know, who works on TEDx – Ania Bywanis, just came up with a new art project and a website, so I guess, as long as it’s digital on our website and doing something to solve people’s problems – we’re interested in that.
16:18
Richard:
That’s true, I was interviewed by a local newspaper’s guy called Romanowski and it’s called What’s Up and it’s a magazine focused on technology startups and all sorts of business process outsourcing shared services movement, which is huge in Kraków and he was saying, he was asking me whether we’re just focused on traditional students, or the kind of students who come to our events, tend to be engineers, programmers, techie guys, lawyers or economists. Well actually technology touches every walk of life, so we’re already interested in teachers, doctors, geographers, in artists, sociologists, because everyone is being potentially impacted by the technological revolution that’s going on all around us, we moved to mobile, there’s broadband everywhere and location based computing and you can’t be a good teacher if you don’t understand the impact of technology on your potential to deliver a better service for example.
17:32
Sam:
Technology’s definitely like dominoes, touching every industry and transforming and eventually it will hit big ones, like politics. I don’t think we’ll limit ourselves, in fact, there’ll probably be good to broaden some of our topics in the show.
17:50
Richard:
The scene of TEDxKazimierz next year is transformation, which is basically a before and after story: where were you before whatever it is, that you did or you thought of your project and how did it transform your life as the person giving the talk, or more importantly in the lives of the target beneficiaries of your activity or project, so I would say if someone’s doing something amazing, interesting, spectacular, mind-blowing, awesome, scalable, disruptive – teasing Silicon Valley buzzwords, we are interested – so please suggest them on our web page or social media.
18:29
Sam:
Yeah, and one of the things that we’ll be doing and we’ll talk about this in a minute – I’m going to focus a little bit more of my time on Project Kazimierz to get some more things out there, possibly some articles and increase our presence on social media, to make sure that people see the next episodes, but also get some more ideas from us and one of the things I’m excited about with another TEDx coming up – congratulations – is speaking to all the speakers that you’re going to be sourcing. We should have a good line of people to talk to.
19:00
Richard:
For sure. We already interviewed, among others, Jonathan Ornstein, who spoke at TEDxKazimierz – the leader of the Jewish Community Centre. A great interview. He spoke on stage with Robert Desmond about the March of the Living. Celebrating the progress, underlying the fact, that Poland Krakow is one of the only countries in Europe, that’s getting better for him. Then, on top of that we had my brother Edward Lucas, we’ll by trying to get MC Silk – the multilingual YouTube viral rapper, fastest rapper in the world, we’ll certainly be getting back to him. I’m very excited, that we signed our first speaker for next year – Michal Kulik, who’s setting up a magic community, like the community for illusionists. We were brainstorming, apart for the sheer entertainment, there were the issues of magic on the screen on the entrepreneurial side of magic, possibly getting magic into prison. There are wonderful TEDx talks about teaching prisoners about entrepreneurship. But if you imagine someone stuck in jail for a number years, what would be better than to give them a time-consuming hobby they can focus on and feel a sense of progress, when many things going on wrong around them. Clearly the people, we want to interview for Project Kazimierz might be suitable for TEDxKazimierz stage and vice-versa.
20:27
Sam:
Yeah, we’re looking forward to seeing that and it’s going to be good to get started on another episode with you, I’m looking forward to all these interviews. The next topic I’d like to go over today is the topic of starting over and why it’s important and I know a lot of our listeners are entrepreneurs and I have an interesting last month and half – 2 months of my business, where I had to make the tough decision to shut my business down and start over on a new project, which has been pretty hard and I think , that one of the things Silicon Valley talks about – the culture of fail fast and all that kind of stuff and just going over that with you, Richard, sharing a little bit of my story and obviously getting your great insightful questions and commentary and hopefully it’ll benefit the listeners in the Kraków and Polish startup community, because I think, one of my goals out of this is to make an example of how to handle failure, because it’s easy to say and quite hard to do.
21:41
richard:
Yeah, when someone was asking me what went wrong within your business, I said that I don’t know the full details, but almost all business failure at some stage has to do with revenues being below costs. It’s very, very simple. But I think, in just a few telegraphic sentences, if you could give… I know you sent a couple of emails, but not all of our listeners have seen those emails. Just, in a few sentences, describe the key things of what went wrong and the some details about why revenues were below costs.
22:15
Sam:
Richard, one of the things I realize, looking back. I was doing the TEDx talk for TEDxKazimierz and I remember before I got on stage, I had this nagging feeling, that the subject of my talk was almost true, but not quite. I was talking about how to choose what you really want to do in life, but I was talking about how I’d gotten there. But I really hadn’t, because I was talking about Project Kazimierz being more along the lines of what I want to do – which is digital publishing. I was spending almost all my time and energy at that point on another business, that I’d already set up – and that was Triathlon Research – a company I set up a couple of years ago, born out of my consulting work for top triathlon coaches and at the time I was deeply into the world of triathlon myself, I’ve since quit the sport, but continued working for triathlon coaches and pro athletes in the sport and I’d set up a consulting company and then realized, that I had a huge ability to sell and done well in the industry, but didn’t have the best business model, because I was working as a consultant and getting paid on performance and while I found that my clients were doing really well, I was spending all the money I got paid on getting that higher performance – trying to break out. I realized, when you work for someone else on a performance base, it sounds great in theory, but not always. So, I’ve shown the ability to grow revenues a lot for other people, why not flip the tables and publish triathletes and pay them out, rather then get higher percentages. Long story short, I’ve been working on that business model for a while and I figured out how to sell of all things a $5000 – $10000 triathlon camp and had done a really good job selling them, but had not gotten costs below revenues, as you say, and was really trying to get to the point, where I was going to do online publishing, selling the videos of the camps, which is where I believed the real profit was, because that was my experience before I started the business. When I moved to Kraków, my revenue exploded, went way up, due to the quality of the Polish workforce here and my ability to…
24:55
Richard:
Could you give some scope in numbers, for an event you were organizing, what was the lower range of revenues and the higher range of revenues.
25:02
Sam:
The lower range of revenues was around $100K, my first camp we made $80K, the second – $180K.
25:15
Richard:
This is in revenue?
25:17
Sam:
Revenue, yes, not in profit sales. And then, the camps I ran this year went to $250K-300K in revenue. Very high expenses associated with that revenue. A lot of the expenses were in the sales and marketing. They were profitable overall, but not when you include the sales and marketing cost, which is really what counts.
25:44
Richard:
I remember when you were explaining how the business works, I was thinking, a lot of people think they might understand how to use social media to sell specific, very niche products. What could be more niche that $5K camp, where you meet an Olympic gold medalist. There was a podcast associated with Triathlon Research. And Sam was actually doing it with the team he put together, he did have a prior team, but he centralized it here in Poland. If anyone listening needs advice and consulting, I imagine there would be a price and for Sam it’s worth the money. That’s what happens when businesses come crashing. One of the important things, when things don’t work out is to try and learn lessons and do you think you could’ve brought the cost of your events down, without compromising on quality. As some of the listeners sure know, I run the Open Coffee event and I make a real point in doing it. They’re low budget, and quality and cost always go hand in hand, but we try to keep the quality up. Was the quality too high? Could you have done it cheaper and stayed in business?
27:04
Sam:
I think you pointed out one of my weaknesses in business is trying to make quality higher than what necessarily could be afforded and that’s just because of my probably my perfectionism and demand. Looking back, I could’ve made the camps more profitable by driving a better deal on some fronts with different people, who I think were generously compensated. And also, over time I learned how to get the cost of sales and marketing down, which I don’t know, looking back, how I would’ve done that quicker, aside from just learning quicker and maybe paying more attention to it. But I didn’t have many hours left in the day, I was working pretty hard. Long story short, we did about $1.5M in revenue in the past 16 months, but the profits weren’t there, when you included the sales and marketing costs. When I realized a couple months ago, that the digital video launches that we’d done this summer hadn’t worked out, I knew, that the business model was in trouble, because the whole time I was running the camps, filming them to get the content, so that I could something, that I’d done before very successfully. Actually, 2-3 times I’ve successfully launched video products for other people and thought I could do it for myself. The 2 we launched this summer – the quality or maybe the marketing funnel, just didn’t take off quick enough and we ran out of runway, the ability to cover expenses. At that point, I went on a trip, not unsolicited. Some people from the US had expressed strong interest in investing in the business, based on their impressive views they had of the company, the brand and I went on a trip to NYC, Florida and Silicon Valley to meet with potential investors and then finally went and ran the last camp in Hawaii. Ironically, what I learned talking to people in NYC and Silicon Valley – NYC is old money, they don’t understand tech that way. They invest in every other industry, aside from tech, although I hear that’s changing, there are some some VC (venture capital) shops, opening up in NYC and then in Silicon Valley, I managed to get in front of some triathletes, who were also VC people and what I learned in Silicon Valley, if you’re not doing SaaS, you’re not doing something that’s very scalable – a rapid revenue growth, hockey stick type growth, then VCs are probably going to pass on it and then take some other opportunity. And finally, towards the end of my time in Silicon Valley, I learned that the best investor would be someone, who absolutely understood the product, knew the sport in an out and it was more of a passion play with the ability to have an upside. I ran into those investors, which I wasn’t necessarily expecting. I ran into some investors in Hawaii, who took our camp, it was an expensive camp. I was able to talk to some businessman, who took the camp. I came excruciatingly close to getting one of them to actually buy a majority share in the business, capitalize the way I knew it needed to be run and I could’ve continued as a minority partner and run the digital agency for that business. Few days ago, I got the lack of word from him with the deadline at set, that he was going to pass on the investment.
31:21
Richard:
Maybe we should try and draw out a few lessons. One thing is – the time to raise money is when you don’t desperately need it. It’s very stressful… I don’t think I ever found the source of this statement, that 80-90% of communication is non-verbal, but people can smell when someone needs a deal badly and it can be a sales tactic. People can feel sympathy, or sorry for you, or whatever, but it’s not the time to be looking… Second – if you know how much capital you’ve got and you’re starting in business, you need to be really, really careful about parking the issue of the business model on future, future products. Generally, you want to get something, that is cash generous and is as quick as possible and I see a lot of businesses, including some I’ve invested in, which have failed, where we’re going to do this to get popular and we’re going to do that. It’s kind of impossible. You need to be sure that is really going to be profitable and the sooner you start doing the thing that’s going to start making you money the better. I do believe there is money in events, if there’s anyone listening, who’s got a big community of some kind of, be it, magicians. When I was in Tannen’s in NYC, 2 of my kids are magicians, so the weekend travelling, we end up in the magic shops. The owner of the business told me, that they had 250 schoolkids, teenagers, going off for a magic camp paying more than $1000. I don’t think I signed anything. Doing a well organized event can be such a win-win, we live in a world, where increasingly the entertainment and education are blurred – “edutainment”. People will get more out of putting their time and money into something, which improves them, rather than just lying by a beach and reading a novel, where someone else is having an exciting life. The business model and cash generation as early as possible.. when you’re raising money – do it when things are going well, not when badly.
33:46
Sam:
And that’s the thing, that.. 2 other things – one of the things – I could’ve saved money on events and the other thing and I regret this in terms of… I believe you should operate in life with no regrets, but looking back, what I would’ve done differently: when you have a big revenue spike going from $50K/month to $180K, give it a few months, before realizing it’s the new normal, which I expected it to be. And that $180K was a dramatic jump up, but it didn’t stay there and making staffing decisions and other things based on that was another big mistake, although all the investments in the staff I made here in Kraków were to build the digital product, which I thought was going to be the big breakout, but it didn’t work out, at least in time. We had some promising signs, but it wasn’t there in time. Building up a reserve, develop the worst case scenario and just being cautious is a classic principle of any business, not just a startup and those are some of the lessons I’ll definitely take forward. Dealing with that, the fallout from it is definitely .. one of the bigger lessons too is the impact of poor decisions when you have to shut down a business… you have to deal with.
38:59
Richard:
I really like the business model of podcast I sometimes listen to called Manager Tools, we’ll put a link in the show notes. It’s a couple experienced American corporate executives, who then have a payable product for $100-200 a year, so it’s pretty good value. It’s all about how to work in a larger organization. How to organize meetings, events, 1-on-1, how to give feedback. Really practical advice, but then they have events in camps, corporate packages, where if the human resources department wants to deliver this across the board, so they have different levels. What I don’t know, would be incredibly valuable for people is any kind of benchmark and I don’t know the relationship between the number of people listening to this podcast, signing up for the newspaper to the number of people converting to $200/year. It’s cheap enough, if you’re an executive, $200 for a guy on $50K/year – if it’s improving your performance at work – it’s a no-brainer. But then, if they’ve agreed to pay that as individuals, they might show it to their colleagues and I don’t want to break the licensing – my individual non-corporate use, because I might get into trouble. But, the amount of money you were spending on marketing, what were the metrics between the number of people listening to podcasts, the number of people signing up, clicking on links? You do a lot of FB marketing and I think some of the listeners will be really interested in that.
40:46
Sam:
To get $1.5M in revenue, we spent about $300K on digital ads. To buy a dollar to get 5 isn’t bad, depending on the margin and the product. However, what I realized and learned in all of that towards the end we were spending about a dollar to get 10. We had really learned how to get those costs down, but we had 120K listeners on our podcasts. I think about 1/3 to 1/2 of the 200+ customers that I had at my camps had listened to the podcasts, so you can take 100 out of 100K downloads and a lot of them are repeat downloads, so probably have 20-30K podcast listeners consistent. We also had an email list of 30-40K.
41:49
Richard:
Was that self assembled organic growth or did you buy that?
41:52
Sam:
Email list was mainly bought, we were basically buying leads off of FB, running ads for the camps with the gold medalists and the top coaches, people would leave their email to get their info on that and then sign up and we’ll put them through our sales process. A lot of the leads where organic, but I would say a good majority of them were purchased through paid media. My experience in media buying and filling in events and setting up a sales system to fill an event was very educational. If I had to do it all over again, I could start out profitable pretty quickly. It took a lot of work to get these events set up and build the relationships with the people. Definitely not in the world of triathlon can I run one of these in the near future. Probably could consult with someone doing it, but the principles apply to any industry, you’re speaking of the business consulting, I did the same kind of thing in the business/personal productivity space for an author and I think we did $400K in revenue for him, doing an event, high-end coaching group and some video course sales for him, so I do know the model works and it’s not just triathlon.
43:21
Richard:
I know Sam pretty well and he’s very pragmatic guy. If you’ve got the mailing list, the niche interest, if you’ve got some product you don’t feel your way through, how could you spend $30K on FB ads… And you’ve got enough money to put an event together, then I’m sure there would be some deal, where Sam will put in the work and take a share of the profit in a way that would be win-win. If it’s screwed up, you’d regret having done that deal, because I don’t think you’d putting money in right now. It’s always good to look for people in business and in life for people, who know stuff that you don’t. Not just in theory, where the rubber hits the road, where there are a number of lessons. That’s the polite way, I was going to say “when the shit hits the fan”, that’s not what I meant, but the point is someone with real world experience is always worth talking to. You can have a chat with Sam and discuss his experience and whether it’s relevant to what you’re doing, right?
44:29
Sam:
Yeah, thanks for the plug, Richard, on the consulting.
44:33
Richard:
I call myself Mr. 5%.
44:36
Sam:
I’m happy to help out anyone, who’s listening to this, happy to talk to them. Richard, the problem I’m trying to solve for people – if you’re an author, a thought leader, a speaker who has great ideas. Most of them don’t monetize that knowledge nearly as well as they could. I’ve got experience doing that for people in the triathlon industry and other places and that’s what I’m passionate about… the problem that I’m solving. Publishing is my industry and passionate about moving on to the next idea that I have for solving that.
45:16
richard:
And a big chunk of the costs is venue, right. You’ve got a venue, a hotel, you’re involved in an organization like an university, where you can get a venue at relatively good value for money then that’s worth noting. Bringing the venue in can be a big chunk of the cost. The idea of hiring the most famous people in the world – whether it’s archery or soccer. Soccer is a bad example, cause top soccer guys are like top golf guys. But, in most things, like scuba diving. I don’t think that the world’s best scuba diver is like a six figure fee guy. He/she would be happy to hang out with people who’re crazy about scuba diving as well, if you do it right. Also with TED and TEDx, we don’t pay speakers, we can in some circumstances refund cost, but people like the attention and they appreciate being in an environment, where they can spread their ideas. Oh, I was about to ask, Sam, how was this emotionally? I remember when the business of mine failed, I had this feeling that everyone thought that I was making a fortune and everybody thought I was the bad guy, that people weren’t getting paid, government tax spill to vendors. Everyone had their social insurance charged. All these people, who felt that it was me, who’d done something wrong. And I was the leader in a sense, I was the guy, who was losing the most money. I wonder, whether you’ve got any comments about how you feel now, how you felt a few weeks ago and how you’ve dealt with that, because you’ve had some knocks in your life, this isn’t the only one, right?
46:56
Sam:
The first thing is, this really is hard and I’ve got experience with hard things and I don’t want to minimize at all and say it’s not been hard. Anyone who says, that failing’s fun and fail fast and fail often – and says it in a casual way – I look at them and say: “Have you truly failed? What are you talking about?”. I’ve been through 2 very hard situations – first one was my US business, which is going to go to bankruptcy proceedings and then, here in Poland, my US business owes Poland, I’m dealing here with the same kind of problems of failure, although I’m not in bankruptcy in Poland and don’t have plans to, because I want to keep this company going and rebuild in Poland. Couple observations – I was working through my head in the last month and a half how to unwind the business and all the people that would be disappointed about it and all the hard, hard conversations I had to have with people and it was a bit overwhelming and it took me a while to work through what’s the worst thing that can happen and I was listening to podcast about negative visualization and you put that out and you tell yourself what would happen to me and that podcast was really, really helpful to me, because the whole last month and a half I looked at what I was going through as how do I frame this positively. I had a good sense, that the odds were against me, although I was trying to the bitter end to make it work. I had the following attitude: I’m learning a lot, I’m getting an MBA in about a month and a half, all kinds of stuff that I wouldn’t have learned, which was fundraising and meeting VCs in Silicon Valley and NYC. Good friends of mine really stepped up to help me out and support me during this. Very good dear friend of mine Rich Bear came in and showed me how to raise money. He was interested in putting money in, but only if I raised a substantial amount from other people. Just seeing how he thought through things as investor and what he advised me was amazing. At the end of the day, knowing that it probably wasn’t going to work out and having the perspective, that at the end of the day it’s just a business, just money. Although it’s very emotional and painful for people, I still have my health and no one’s died. In my background, I’ve been in the military and in combat situations, where the stakes of failure were much higher and I’ve seen the consequences of that, so I always had that. I guess your brain is like a muscle a little bit, you have an emotional muscle, if they’ve been stretched, if you’ve been through adversity on a larger level, it’s easy to put business in perspective. All of that aside, even though I felt like I was very emotionally prepared for failure, when it finally happened, I was a little bit at a loss of what to do the other day. I’ve been sleeping a lot, I’ve realized how tired I am from the last 2 years of constant stress, running the business with never an emotional break. Some of the great advice I’ve gotten from the community and the Kraków community is very supportive – Ela Madej and Seth Bannon, her husband, said to me: “Make sure you’re taking care of yourself. Don’t go into a new startup right away”. Just like when you break up with someone – don’t jump straight into another. Take about a week to decompress, shut off your phone. So I’ve gotten some great advice, a game plan for going forward, but it’s been hard. Given all the things I’ve been through life, it’s still been really hard.
51:26
Richard:
I grew up in an environment, where it was always assumed, that everyone should either be successful and talk about it, or else they didn’t talk about it… It was more unconscious assumption, that what really mattered was to succeed. There was no concept then of failure being valuable learning experience. It’s not nice to fail. But I remember, when I got divorced, it was a dark time in my life, it was my decision, but it was a huge stress. That was a time where you could call it a mid-life crisis, was perhaps a bit young to call it a mid-life crisis, but sometimes the positive side of a really bad experience puts everything else into perspective. When you see these harrowing pictures of refugees, risking life and limb to get to Europe, when even when they get to Europe, they have a very uncertain future. If I’ve got food in my belly and somewhere warm to sleep and I’m healthy I shouldn’t be complaining. The closing message of TEDxKazimierz’ speaker Prof. Wojciech Narębski, who was 90 years old when he gave the talk, was that if you were lucky enough to have your life, freedom and family, you should do something worthwhile with your life and you never know where you’re going to go from where you’re now. It’s just entirely in your hands. I’m glad that you’ve got that framework of rebooting, restarting, and you haven’t been driven to drink or drugs or despair. Maybe you have, but if you have it’s not showing.
53:09
Sam:
I’ve been sleeping a lot and been healthier and probably less self-destructive than when I was in business, in terms of just sleeping and taking better care of myself.
53:23
Richard:
Fewer drugs…
53:26
Sam:
Fewer sleepless nights, fewer stress relief mechanisms, whatever those are and things like that. One of the things, that worried me about this was that I come into Kraków, we started Project Kazimierz and looked like my business was doing well. One of the things, looking back, I didn’t cut staff. Was because I was a little bit prideful and I thought it would be bad, bad looking to do so. One of things, when I was gone, was getting a lot of support from key people, while I was gone in my company staff. Ewa Wysocka and Kuba Szałaty, her boyfriend, were incredibly supportive, Mariusz Trojak, we interviewed earlier. And I was just really blown away by the support of some key people on my staff and there were some other people, who were pretty upset, weren’t so supportive. Kuba called me and told me: “You should email everyone in Kraków and let them know what’s going on, I’m concerned that some people are going to put out what’s going on in their own words and I think you should do it.”. I sent out a simple email to everyone saying: “Hey, here’s what’s going on.”. When I sent out that email, it was big release, just being open and letting everyone know in the community I was in trouble. To ask for their support, thought, prayers, however they chose to support. The response I got was really amazing and the other thing, that Kuba told me: “A lot of people don’t think you’re gonna come back to Kraków. They think you’re going to ditch your business and not come back and not pay anyone back that you owe.”. I wanted to put that into rest also in the email. At that point I said, look, if I don’t make it, the best things I can do for the community, because this is such a great startup community and it’s been so good to me, is just let them see me – not this invincible American, but someone who failed and be okay with that in my own skin and try and help other people avoid that, but maybe even, if they’re going through it – help them through it, just as someone who’s been public about it, has been speaking about it and has been open to help people. One of the things, that I’ve resolved to do now that I’m back and have some more time and we’ll put out some announces to this, is just do some classes for people in the Hub:raum and the Kraków community. Anyone who wants to show up and go over some business lessons. Just an informal business school and we’ll see if people are interested and if it’s helpful.
56:14
Richard:
I think when you’ve had a major failure, it takes quite a bit of guts to come back and face people and obviously different people have different ways and people haven’t been paid. One thing that Sam did and this advice he got from Jakub Szałaty was very, very good, which is that if there are rumors flying around or there’s anything not good in your situation, it’s much better if you deliver the message, because then you control the timing, the way, so if anything’s going wrong in your life, in sales – they say “get the objection in first”, you’re a startup, you say: “We know we haven’t got 5 years of experience”. They hear it from you, they think that you’re in control of the objection. It’s just a couple of things, because we’re coming towards the end of the time, I have a workshop – TEDxKazimierz speaker-researcher-a-thon. Couple of lessons to learn: one is, I was listening to Sam and was just reminded of the book “So Good They Can’t Ignore You” recommended by Derek Sivers and written by Cal Newport. Which just says don’t necessarily follow your passion, you can’t always afford to follow your passion, but if you’re really good something, then you will have some kind of leverage, sometimes being good at one thing can give you the capital and resources to start doing the things you care about. In my case, I’ve got some businesses, that pay my bills, which gives me the capability to take on some of the non-profit things, as I said in an interview, I hate the phrase “giving back”, because it implies I took something away and I don’t think I took anything away. I pay my taxes, I pay salaries. One thing is, even if you’re looking for your purpose in your life, make sure you’ve got a skill. Just in a few closing remarks: we’ve got Sam, he’s back in town, he’s ready to do workshops to support people, so reach out to him. What else do we want? Do we want speakers, interviewees? What else do we want, Sam?
58:27
Sam:
Yeah, we want speakers, interviewees, what I’m going to be doing isn’t… I already know what I’m going to do next for a startup, but I’m going to resist the urge to start it until I’ve got a bit of more solid ground, I’ve cleaned up some bills and things that I owe people and also just taking a little bit of time to rebalance. You might not realize it, when you’re in it, but running a startup is exhausting and it’s hard on your health if you don’t take of yourself. And I certainly haven’t in the last 2 years, running this startup. The old saying that entrepreneurs spend their youth in health to gain a fortune and then spend the fortune on getting their youth and health back. That’s if you make the fortune. If you don’t, you’re really in trouble.
59:20
Richard:
The deal of money if not in exchange youth is not that well supported by the science.
59:27
Sam:
It’s a lot harder to by your youth back, then it is to earn money, that you think you need. Just taking some time to reflect, really get over the emotional trauma of shutting down a business… what’s hard for me is not necessarily all the money I’ve lost, but just the feeling of having let other people down, I hate to let people down. That’s the hardest thing for me and just making right with people, not just those, that feel financially let down, but just emotionally reestablishing the connection is something, that I view as important. Finally, I came back to Kraków and I like to joke with my employees, that I came back to speak to my former employees and say, it actually isn’t a joke, it would’ve been very easy to start over in the US, because the reaction of people in the US is much more forgiving and understanding. There’s less of a stigma towards failure and these types of things in the US then there is in Kraków, from what I’m experiencing right now. Plus, I’m not going bankrupt in Poland, I have some bills to pay. Given all of those things, easier to start over, potentially in the US – financially, due to the situation being at zero there and the stigma of failure not being there. All things considered, I still view Kraków as the best place for me to start over. It’s the best business community I’ve seen in my travels, I’ve had incredible amount of support from my network here, I feel at home here, I feel I like I have a family, a business startup community family that I can draw on and quickly, quickly rebuild financially, get healthy and when I do get back to zero, it’s a much better place to start a business than anywhere else in the world.
1:01:24
Richard:
That’s a very nice closing. One thing we haven’t down until now, but listening to other podcasts, they offer little partnership/sponsorship spots. We’re not in a position, where we want to take money in return for sponsorship at the moment. That’s legal issues, because we don’t have a legal entity, but if there’re people, listening to this, that are doing something, that’s in line with our values, our spirit and you’re ready to record a 45 sec – 1 min long spot, that we could stitch into our episode in the middle of the episode, or at the end of the episode – a little spot, that’s something that we might well be ready to consider. Obviously, we might expect a barter deal, where you link back to us in your blog or your community, but in the TEDxKazimierz events we always have a slot for open mic community announcements and Sam, would you agree, if someone’s ready to put a little bit of resources into recording a good quality content, that we could stitch into our podcast from time to time.
1:02:17
Sam:
I think it would be interesting to have some community service announcements, if it serves the community, we could get those announcements in. If people want to actually advertise something, we’ll probably look into taking on sponsors for the show for something, probably money, or maybe some other service.
1:02:36
Richard:
Money works extremely well, it’s an old fashioned deal – money in return for something. We’re both in business, so one of the deals we ready consider is money in return for a slot/sponsorship. But, also if you just support our objectives, certainly that would be welcome and we’re not running this as a business. We’re running it as a community service. But, community projects/announcements. People doing things that we approve of. Sam and I have a contacts with the sound engineers and you might need to put a few złoty in to help to make the engineers make it really professional, when you can’t do it yourself. But the main thing is – the offer is out there, if you’re interested. I know we have to wrap up in the next 30 seconds, I’ll ask to Sam close the episode.
1:03:19
Sam:
Well, thanks again, Richard, for joining me. It’s great to start a new season. I’m very happy to be back in Kraków, more excited than ever to be here, to be starting another episode of Project Kazimierz. To just go over an important topic, that I think can be helpful to other people, if you’re listening to this. Maybe you’re in a situation, where you think closing down a business might be the right answer, but you’re scared to do it. I’m happy to talk to you. Just email me – sam@projectkazimierz.com or if you’ve shut down a business and want to share some advice/experiences I’d love to hear it. And finally, any comments will be welcome. Thanks again for listening and joining us in our next season of Project Kazimierz.
1:04:05
Richard:
Yes, we’ll see you on the flip side!

Share this podcast with your friends:

Join The Conversation: