How to know when to leave a business
Last week I was interviewed about the finale of Shark Tank S4 and the journalist asked – “tell me about one of your failures?” He was interviewing all five of us from the program – and all of us have had successes and many failures.
I responded, “Shall I tell you about the one from just last month” at which point, Dominic Powell was rather curious!
I have never claimed to have it ‘all sorted’, and everything running smoothly. In fact, quite often in the last months, I have found that I have been toiling away in areas where I am not in my ‘power’ – ie not using my skills, talents and energy to their greatest return. Understanding opportunity cost is part of this equation.
Stepping away for a few weeks and heading to Mongolia (as I have written) helped me connect to my purpose. And what that meant was there are some things that just did not belong. But having the guts to do something about it…was something different. What was I going to say ‘no’ to.
In mid-2017 when I co-founded the Big Red Group, alongside my business partner David Anderson, we set in motion what was to become a passionate and powerful purpose that would guide our decision making around existing group assets, as well as future acquisitions for the group. This purpose, to shift the way people experience life, is a guiding light for us when considering what we do next, and why.
It became obvious quite quickly that some of the existing assets within the group didn’t align with this vision – our Big Hairy Audacious Goal (BHAG) to deliver an experience every second somewhere on earth.
Our marketing AI technology business Marketics (Albert AI), of which we are the exclusive AU and NZ partner, fits this brief by delivering the best outcome for our clients in their experience of digital marketing. Our reward and recognition software offering Redii.com shifts the way people experience life at work. Our future growth plans, and conversations, align solidly to this purpose and vision. But our physical gift brand Wrapped felt like a square peg in a big red round hole.
Wrapped.com was launched late 2016, and was a spin off from the ‘experience in a box’ concept within the RedBalloon business for many years. The decision was made by management to separate the two as they believed there was an incremental growth opportunity. However, what was achieved by the management of the time when it was separated was to turn a four million-dollar-a-year business into a one million-dollar-a-year business.
When I stepped six months into the Wrapped.com story mid-2017, we made the call to persevere with the Wrapped business for a further 12 months. We had a solid team working on the business, we had good product depth and a stable of committed partners (and I could include many of the Shark Tank businesses). We worked hard and doubled the size of the business. But it was still only turning over $2m – to get it beyond that it would take serious investment of capital for continual systems development. But it continued to operate in a highly competitive and (increasingly) cluttered category. We could see other players in the market – the likes of the giant Amazon at one end of the spectrum winning the supply and delivery game, and then Hard To Find at the other end winning when it came to a unique and highly curated offering.
So at the end of FY18, we made the difficult call to discontinue our efforts with Wrapped.com. To refer our traffic and supply base to Hard to Find – who does an exceptional job in the space and has good momentum. The opportunity cost to continue was greater than the potential upside of the business. (How can we shift people’s experiences of life when so much time and energy was going into a ‘me too’ business). Who knows if it is the right decision – but our time has freed up to find greater opportunities for ‘Experiences.’ (Also we could re-deploy our great team into other roles within the group – there was no loss of jobs).
And so my business partner David has challenged me to be brave and open and to own this decision, publicly. This ‘failure’ if you like. Because at the end of the day, we’re all fallible (I am definitely far from perfect and not every business decision will be the right one). Even those of us who have been in business as long as I have. There still isn’t a day that goes by where I don’t learn something new (just some lessons are more expensive than others). And transparently I am happy to share what I have learnt – both the good and the bad. I learned the power of ‘no’. Is there anything that you need to say ‘no’ to in your realm?
To be a powerful leader and a successful business person means that you are pragmatic when it comes to ‘do analyse do’. Knowing when enough is enough and realising that staying focused on your core purpose and passion is what will make everything else flow.