Misery Loves Company: FuckUp Nights at Austin Startup Week

By SUSAN LAHEY
Reporter with Silicon Hills News

Laura Beck, founder of stripedshirt

Laura Beck, founder of stripedshirt

There was the story about a really fun, crazy marketing plan with no return on investment, the entrepreneur who thought she could let her bills and health slide while she built her business, the visionary pivoter who didn’t bother to do any market validation before buying $100,000 worth of inventory, and the startup techie who didn’t get things in writing because her co-founder seemed like someone she could trust. It was Austin FuckUp Night, Startup Week Edition.

FuckUp Night is a global phenomenon that began in Mexico in 2012 where entrepreneurs can share their failure stories and lessons learned. Austin’s first FuckUp Night was in August. Thursday night Elijah May, Managing Partner at The Experience Firm, Frances Smith, formerly of Diesel Foods, Laura Beck, founder of Striped Shirt, and Nicole Forbes of Violet Crown Consulting bore their entrepreneurial wounds before a group of about 100 people at Mutual Mobile.

Marketing for Fun, Not Profit

May, chagrined to be sharing that brand strategist screwed up someone’s brand, told a sad tale that had the audience laughing the entire time. The idea started—like many startup brands do—with a crazy idea that had no real tie to the business plan. His favorite part of what he does is to create amazing experiences. And he was hired by a sign company that gave him carte blanche to create such an experience for customers.

“After a lot of conversations, I found this cool idea: Signs and Bacon…,” May said. People loved it, but it didn’t make people buy signs. “We didn’t do any homework,” he said. “We didn’t figure out what this thing was or understand the company’s culture. We had a cool logo and some fun stickers and we ended up getting a pig and naming him Kevin Bacon.”

At Christmas time, they tried to tie the campaign to selling yard signs by decorating the old-fashioned pig logo with a Santa cap and writing “Pork Your Neighbor,” on the signs. This didn’t go over as well as Kevin Bacon.

“No one wanted to pork their neighbor at Christmas,” May said.

At one point they had Kevin Bacon, the pig, make a star appearance, pulling up in Whurley’s (founder of Chaotic Moon Studios and Honest Dollar) car to a red carpet. The pig relieved himself in the car. That, May said, was kind of the moment he knew.

His biggest takeaway, May said, was: Don’t forgo the branding process. “Is the culture clear? Is the brand clear? We jumped right to the fun reputation stuff but you have to be sure why you’re doing it and provide people with a solution they want in their lives.”

When Your Business is Everything

Frances Smith, founder of Diesel Foods[/caption]Frances Smith spoke next. Hers was the freshest failure, since she closed her business, Diesel Foods, only six months prior. Smith said she’d had one talk prepared but switched it the night before to an admonition that entrepreneurs have to take care of themselves. Entrepreneurs, she said, sometimes pride themselves on the insane hours they work and how long they go without sleep. They shouldn’t. But they also shouldn’t neglect the other parts of being a person, like working out, getting a haircut, and possibly getting a counselor.

“All I ever talked about was my business so my friends never wanted to talk to me again,” she said.

Plus, friends who weren’t entrepreneurs didn’t understand that $50,000 in revenue didn’t mean she was getting paid. And that was one of the biggest issues: Not paying her bills. Tanking her personal credit score made it nearly impossible to get money for her business.

When an audience member asked her if she would have heeded her own advice had she heard it at the start of her business, she acknowledged “Probably not. But I’ll do it next time.”

Well I Love the Idea….

Laura Beck zipped the audience through a tragically hilarious dip into fashion entrepreneurship that she described as “One and done.”

Beck had been in PR for years and her agency was “killing it” with $3 million in revenue. But she was working constantly and didn’t have the time she wanted for her two young daughters. So, without the benefit of any market research beyond consulting her own opinions, she dumped it all and spent $100,000 on boxes and boxes of striped shirts that would let people show their support for a school or a team or a city, without having to wear some ugly logo. She imagined whole families going to games dressed in the shirts, which were priced at around $20.00—again, according to her opinion of what they should be priced.

She built a $10,000 website that was way more than she needed. “I did it thinking ‘I can scale this baby! I can have striped bathing suits and water bottles….’ I over architected the smack out of this thing. It was like I was building The Gap.” But she never took time to implement a lot of the other marketing tools she actually knew—on some level—that she needed.

She’d thought, being a PR expert, she could push her business without sales. But PR, she realized, is “air cover” for sales. The only time sales rose was in September. She thought it was tied to people going back to school and sports teams getting revved up, but in fact people were buying them for Halloween costumes, Where’s Waldo in particular.

In May she threw what became a viral “Kickstopper” or and “Indienogo.” “I wanted to bookend this fucker,” she said. She did a tongue-in-cheek Facebook video that got 138,000 views and sold 1,000 t-shirts. Then she took her family to China. (She still has a lot of shirts for sale).

Trust But Verify

Forbes told the tale many entrepreneurs struggle with about going into business with someone she trusted without pinning her co-founder to nitty gritty details like vesting schedules and control.

Ultimately, she said, the business, SMRT Mouth, a biometric mouth guard that collected data from players on the field and sent it to coaches with tablets on the sidelines, succeeded, but she was out. Forbes’ co-founder started by wanting 51 percent of ownership, promising her full control as to how to run a business.

Once they got their patents on a smart mouth guard, she was off like a bullet from a gun. “I was really eager, versus excited,” Forbes said. “It’s okay to be excited, but when you’re over eager, you start to overlook red flags.” For example, there was no proof of concept. “You couldn’t even put the thing in your mouth,” she said. She had no equity, there was no vesting schedule, she wound up working for a year for free, and every time she was on the verge of getting investment that might cut into the co-founder’s 51 percent, he put the kibosh on it. What finally convinced her to leave, she said, was learning that the co-founder had given someone else equity in the company.

The co-founder wanted to split the company into a hardware company, a mobile app company and a data company, giving her the hardware piece. “Everybody knows the money’s in the data,” she said.

Her biggest mistake, she said, was avoiding offending her co-founder. That and “Never go into business with someone who knows shit about business.”

FuckUp Night happens monthly in Austin.

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