Thursday, March 29, 2012

My First Venture Failed and I Wouldn't Change A Thing

I started my first company in college. I installed residential irrigation systems. Yep, sprinklers. 

I had just completed my freshman year at UNC-Chapel Hill, and I knew very little about entrepreneurship. And nothing about installing sprinkler systems. Yet there was an opportunity, a market, a product, and me. I was confident I would succeed.

In three months, I’d look back on my first business after going bust, and I knew I would be an entrepreneur. Here’s my story.

The Opportunity


I was with my friend Marcus at his house in Durham, and realized they were the only house I’d ever seen in Durham with an irrigation system. I was quick to figure out that many new developments in Durham were being built without one, meaning the market was virtually untapped. Eureka! Now, here was a great business opportunity.

I whipped out a napkin, found a pen, and did some scribbling. Okay, so if there are 200 homes in the three neighborhoods that would be in my market, and the average price for a sprinkler system was $3,500 (Marcus's parents were kind enough to share what they paid to install theirs), yet the parts were only $1,750, that left a total market opportunity of $700,000. Heck, even if I landed 1 out of every 10 homes, I was going to pocket $35,000 for the summer.
 

The Product and The Market


Okay, so I had to learn how to actually install sprinkler systems if I wanted this sole-proprietorship to succeed. So, I spent the next two weeks doing absolutely nothing but working on my business, and learning how to install sprinkler systems. I lived it, I breathed it, and I even had a strategy for how to keep doing business once school (and soccer practice) resumed. We call this “the rush,” and it’s what entrepreneurs feel in the initial phase when they first decide to implement their ideas.

In a month, I had my first contract, and my client had placed a deposit on the job. My marketing strategy worked--flyers printed at Kinko’s and posted in the subdivisions within my target market. What was excitement became euphoria--I was in business!

Execution


The roadmap for execution was perfect: I’d dealt with the typical bureaucratic offices, the utilities had been mapped out, permits had been pulled, and all that was needed was for the
homeowner to approve the placement of the sprinkler heads.

Fast forward two weeks.
I was a week behind schedule. It didn’t take long to realize that digging a 12-18” deep trench in the clay of North Carolina is dang near impossible. And yet, the job plan demanded close to 400 feet of trenches.

Days turned into weeks, and the weeks turned into a month. I wasn’t even close to completion.

I was doomed. I was terrified that I couldn’t actually deliver what I promised. I had failed.

Entrepreneurs Can Fail, Should Fail, and Will Fail If You're Doing It Right


And then I had another idea! With renewed optimism, I pivoted (before this word even existed) my business. I called a few professional installers and asked them to meet me at the job site.

After some negotiation with professional installers and the original homeowners, I was able to keep the deposit I had taken. The homeowner entered into a new contract with the installer I brought to the job, for the same net price. That’s what we call a win-win scenario!

I had 9 or 10 other jobs lined up at the time, so why not make lemonade, I turned around and gave all of these jobs to the new installer for a 20% commission.

I did not make the projected $35,000 that summer, but I earned enough. The hard work in the North Carolina clay taught me a lesson more valuable than the money I had earned: I knew I was an entrepreneur.


About the Author

Nick Jordan is the founder and managing director at Smashing Boxes, his fifth company. Nick is a contributing writer for the CED Start Something Blog, and if he was a pirate he most definitely would say "ARRRRR".

1 comment:

  1. nick, this is an awesome story. thanks for sharing.

    ReplyDelete