Tag Archives: focus

My Mistakes As An Entrepreneur: Wine World Trade

I’d like to publish some articles, relating my experiences as an entrepreneur. Along the way, I have made all kind of mistakes so I’d like to publish them as a reminder to myself (hoping to avoid them in the future) and for anyone who want to know another experiences.

“We learn little from victory, much from defeat” Japanese Proverb

I think I have material for almost 4 or 5 articles with different projects I have tried, some of them have died before launch, others are working like zombies, others are working and are profitable and others have been sold. In all of them I have made mistakes that I could have avoided if I had read books like the ones I’m reading now or heard other entrepreneurs experiences.

Wine World Trade

Wine World Trade

Wine World Trade (WWT) started around 2010, my partner David met a guy, Victor, in Ibiza who had worked for one of the few online business which traded with wine and other spirit drinks. Victor didn’t end very well with this company and he wanted to do something similar but improved.

We talked about it and we conclude we wanted to build a SaaS with social network functions. Distributors and importers could publish a call for tenders and producers, wineries, export managers could offer their stocks. The social network part will be something similar to LinkedIn but focus in wine industry.

Build a bottom-up forecast.

“Don’t say that there are three billion people in China and if we get 1% of them to spend $50 then we will be a $1.5 Billion dollar company. This is not realistic because getting 1% is really hard…” Guy Kawasaki in The Art of Start.

In our research we found a db with more than 40,000 related contacts (wineries, distributors, importers, export managers…). We thought,  if only 1% of them become our users we could make about 400*99$ = 39,600$/month (99$/month was the cheaper membership). Only 1% and only counting the basic membership, this was a realistic scenary, isn’t it? Some years later I read “The Art of Start” by Guy Kawasaki and it was funny to find this same theory like one you never should make.

Obviously we didn’t reach the 400 clients, we didn’t reach even one.

Barriers to entry.

The business looked very profitable and there was only two big competitors. We knew we can do it better with lot of new features and a nice interface for the users. It will be easy to reach clients and defeat the competitors.

If the business looks very profitable and there are only two competitors, why is this ? We should had asked this question to ourselves before continue and then we could have learned that this two big competitors were supported by big players (A country and a big consortium). This players publish their call for tenders there and they were not going to publish in anywhere else.

MVP.

“if you are not ashamed of your product when you launch it, you launched too late.” Reid Hoffman of LinkedIn

So, it looked very interesting and we didn’t spent many time in form a team and start to work in our MVP. The true is we didn’t even know what was a MVP, we thought we need a perfect product to launch and we worked very hard in it.

WWT DB Model

We picked a great domain, wineworldtrade.com (now free) for our brand, and some others that we wanted to use like landing pages like winedistributors.biz (working) and similar.

The design was outsourced to speed up the launch. Fernando, a great developer and knowledgeable about the wine industry, joined us and we spent more than one year developing our perfect site. The database model image has 61 tables, so imagine the code :)

We developed lot of cool features but we didn’t ask any client if they need them until the last moment. When we were almost ready, we built a landing page and tested our 40,000 database contacts asking them feedback about WWT.  The results weren’t good, some wineries answered and they were interested in the product (only the part where they could sell their stock), export managers too, but distributors and importers were missing.  They had so many offers in their desks that the last thing they were going to do was join a community where wineries and export managers were going to be able to send them more offers. No distributors or importer = no business.

Focus.

“People think focus means saying yes to the thing you’ve got to focus on. But that’s not what it means at all. It means saying no to the hundred other good ideas that there are. You have to pick carefully. I’m actually as proud of the things we haven’t done as the things I have done. Innovation is saying no to 1,000 things.” Steve Jobs

David and I were supporting the project economically and it become difficult. We heard about some others ideas which could provide us fast money. With the current team there will be a couple of days only. So sometimes we parked WWT and tried another “fast money project”. They weren’t two days projects and anyone of them provide us fast money (or other kind of money), only delayed WWT.

Give up.

In the meantime we had gone losing members. Too much stress, misunderstandings, loss of motivation… Finally only David and I remained in the team but we didn’t give up. We knew there was a great opportunity with wine through internet, we only had to find how could we combine them. So we started from scratch. David came to Madrid and we drove around Spain visiting wineries and personalities in the wine’s industry asking about their needs and how could we help them (At last we did it !).

The experience was great and we found lot of kind people who spent time with us answering our questions and giving us valuable feedback. But there came a moment when we realized that what users wanted, it needed a huge investment in money and an experience in the wine’s industry, which, neither David nor I had (we not even drank wine then). It wasn’t a startup. It wasn’t our business. We realized we continued with the idea by inertia, because we already had invested 2 years. So we stop and thought about it with the conclusion that it wasn’t what we really wanted.

So finally we gave up with WWT. I’m not pretty sure if our mistake was to give up or not having gave up before. Maybe if we had searched for external funds we could have redirected to our territory and make something great… who know?

Mistakes.

These are the mistakes I can extract from the experience:

  • We didn’t research why there was only 2 competitors.
  • We wanted to have a perfect version before launch.
  • We didn’t make Customer Development before start coding.
  • We should have search external investment but we didn’t want to share.
  • We lost focus sometimes.
  • Give up?

Let me know if you have any thoughts or questions about our mistakes on entrepreneurship. I’d love to hear about yours too!