Failing Forward: A lesson in business, life, and relationships
I’ve been thinking about this post for several months now, struggling to find the right words to levy against the mountain of negativity that I’ve experienced in closing my first business.
Writing this post wasn’t fun, but absolutely necessary in order to move on and seek closure.
So, I will be blunt: Integral Impressions has failed.
The fact of the matter is, the business that I founded, nurtured and built is now closed. People are disappointed. Some seriously let down. I feel like shit.
Now what? Time to write a blog post and do my pass on the lessons learned. Time to make every attempt to find the value in a really devastating situation.
Let’s take it from the top:
The last communication regarding Integral Impressions referenced an acquisition by ‘Morefocus’ that never came to fruition.
We entered in negotiations towards the end of 2008, hopeful that we would be acquired as our runway was quickly coming to an end. After a several month courting process and a few critical mistakes later, I became the victim of misfortune as I watched the deal start to fall apart.
Here’s how: Both companies entered the ‘Due Diligence’ phase of the agreement on the verge of SouthbySouthwest (SxSW), in March 2009. Hopeful that everything would pan out, and disparately needing to communicate what the future held for clients, developers, users, and staff- I made the decision to release the news of the acquisition before the docs were signed. (enter Mistake #1)
After the news broke, it became really clear to me that the deal was going sour for several reasons:
* The books weren’t clean, and filled with accounting holes
* Morefocus was no longer in a position to make an investment in my company despite their good will/intentions
* The valuation at this level proved to be very difficult (we ultimately settled on 1x revenue)
With the news (and video) of the acquisition released, and the reality that the deal failed, I had really struggled with how to respond. I was faced with the immediate need of figuring out how I was going to survive. I have a new family, new baby, and ailing family members that all depended on me. I had to do something, and I had no motivation to face the fight.
I tried to revive my back up deals that fell by the wayside when I entered the DD phase with Morefocus. I tried to reposition the company for a round of investment. I tried to sell my way out of it. In the end, nothing worked.
I was not able to pay myself, the development team, or even the server bill on some occasions. I was faced with more collection calls than sales calls and I didn’t know what to do, or where to turn. Things were getting really bad.
Which brings me to (Mistake #2): Holding on too long.
Almost every failing business gets to a point where they know they should close before they’ve committed to making the decision. Some entrepreneurs put the superman cape on, and pull their business from the wreckage, however- most don’t. My second failure was making the mistake of holding on too long. I did myself, my vendors, and my clients a major disservice by not reading the writing on the wall, and closing our doors sooner.
The fact of the matter is, companies need money to close their doors, which is counter-intuitive. Knowing how to get out safely is a skill you only acquire by experience. You either have it and know it to be true, or you have absolutely no idea what I am taking about.
I simply held on too long to the dream, and didn’t put myself in a position of strength for my next endeavor. I was completely tapped financially, emotionally, and physically. I wanted to hibernate for at least 30 days, but I couldn’t. I needed to get out there and make something happen.
Good entrepreneurs know when to cut their losses, and how to position themselves for success even if everything around them is failing. A lesson I am learning, albeit painfully.
So the Morefocus acquisition fell through, I was down to the felt, and I needed to close the business. Unfortunately this meant leaving unfinished business with many of the people that helped service my clients months and years before. Which leads to me to one of the most difficult experiences I have had to face to date, telling contributers that I would not be in a position to pay them for their work. I know this is shitty, but relatively common given our economic climate. Regardless, it is an experience I will never be comfortable with. For the sake of my own survival, I needed to communicate the reality and hope that down the road I would make everyone whole.
Some accepted the communication as fact of life. Others persisted to email/call me frequently until they realized I wasn’t bluffing. All I can do is profusely apologize to these individuals and offer my help (in sweat equity). The list of people below are talented contractors that have helped me a great deal, and I’d like to ask any of you to employ them as needed if you can use their services.
* Ryan Cartsen of Carsten Media (www.carstennewmedia.com) – Flash Genius
* Ryan Kuder of Koombea (www.koombea.com) – Agile Web Development
* Kane Baccigalupi (www.linkedin.com/pub/kane-baccigalupi/7/29b/916) – Rails/Merb Developer
* Chris Schulte (www.oceanbreezesoftware.com) – System Administrator
* Jim Hughes (www.unkind2monkeys.com) – Rails Developer
* Cooper More (www.coopermor.com) – Designer
* Leland Saccone (www.pglawfirm.com) – Lawyer
To some of the above I owe a financial debt. To all I owe a personal debt. Thank you, everyone with whom I’ve worked, as client, contractor or staff member for what you’ve done. It is my fondest hope that at some time in the future I can provide you with a fraction of the value that you’ve provided to me.
Letting people down sucks. Starting over in business sucks. Your life changing because of these repercussions suck. I wish I had a different adjective than sucks, but it fits.
And this brings me to my 3rd big mistake: not communicating enough, sooner.
People have a right to know what’s going on, even if the news is ‘nothing’ or ‘we’re working on it’. It became increasing uncomfortable for me to interact in the social environment because I was keenly aware that I hadn’t addressed the situation.
After short period of avoiding the matter completely, I typed a letter and posted it on integralimpressions.com, then waited for the fall out.
To my surprise, that fall out never came. Maybe people didn’t want to speak on the matter until I did. Maybe people discussed it amongst themselves, offline. Maybe people really didn’t care.
The only thing that gives me peace is knowing that I made every sacrifice I’ve asked people to make for me, and then some.
At the end of the day, I had a strong 5 year run at creating a self sustaining business and got sideswiped by a bad economy and diminishing client base. I put everything on the line to create something better for my family, and those around me. This time, it didn’t work out.
So that’s the cliff notes on what happened. Maybe I will post more detail if people really want to know. For now, this is all the info I feel comfortable sharing on the subject.
So, now you know what happened. Let’s talk about what’s next.
I went through a myriad of emotions throughout this entire process. I’ve felt angry, depressed, anxious, and everything in between. I seemed to conquer my issues by realizing three important facts:
Fact 1: Acceptance First.
I had to work hard to accept myself, regain my confidence, and be as comfortable as I could with what happened. All of which was really difficult with Pride and Ego constantly in my ear. I had to let go of other people’s perception and just charge through life utilizing my newly minted experience.
Fact 2: You’re not alone.
I had to realize that as much as I am responsible for Integral’s failures, I am not alone in this. I am not completely responsible, nor am I an outlier. This is a reality most businesses (and even governments) face and I am not single handedly responsible.
Fact 3: Feed your support network, and you’ll get fed.
I can’t thank my family, friends, and close colleagues enough for sticking with me through these times. You know who you are, and I appreciate you all SO much. You’ve kept me fed in more ways than one. I’d probably be working some dead-end job if it wasn’t for your genuine caring and support.
Accepting myself, understanding I wasn’t alone, and feeding off my close support network was the key to getting me back in game.
After the dust had settled on the failed acquisition, MoreFocus still needed a skillset that I possessed. I negotiated a role as acting Chief Marketing Officer, where my responsibility will be to oversee all internal and external marketing initiatives.
Just when I wanted to be done with everything Integral and dedicate myself to a new venture, there was still a great deal of work that still needed by done.
(1) Fire sell the assets of Integral
(2) Communicate the reality to investors and vendors
(3) Clean house, terminate contracts, and close the doors
All of which take more of an emotional toll, than physical. I honestly feel, after dealing with this, I can handle almost anything business has to offer. I am not patting myself on the back, inferring that I handled this perfectly. However, this experience thickened my skin in a way that only experience does. You can’t get this knowledge from reading a blog, book, or Twitter feed- it has to be lived.
At times I have found it difficult to pursue new business with this failure fresh in my head. Starting a new role and constantly tending to another, put me in a constant state of conflict. Until a mentor of mine reminded me that in order to make good on anything I’ve done in the past, I must put myself in a position to be successful in the future- and I shouldn’t feel guilty about that. He went on to say, “a good amount of success is garnered from putting out an aura of success; and you can’t embody that if you’re constantly doubting yourself.”
Right now I am pressing on with Morefocus, and personally reevaluating a lot of things in my life. I hope to be in a position one day where I can look back on this experience and see that it was only a temporary set back. I know my best days are ahead of me, and I’ve yet to do my best work. That is what motivates me everyday moving forward: making good on past commitments, and propelling my next venture into a great success.
Thank you for reading this, and listening to my lament. Given the breadth of this subject, if there is anything you’d like me to elaborate in further detail, leave me a comment and I will be happy to oblige.
One final note. If you’re going to fail… Fail, and then keep moving forward. Success is a venture away.
18 Responses to “Failing Forward: A lesson in business, life, and relationships”
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Browne, you have always been an inspiration of mine since day one and you continue to do so in many ways. If it wasn’t for guys like you, I would not be here today. Keep trucking my friend.
I've always been really impressed by you and after reading this brave letter you wrote, I'm even more impressed by you. This is just a stepping stone towards your future success!
The reality is that in order to succeed in life you have to fail. Getting this monkey off your back is definitely a step in right direction. Congrats man that had to be though to do. You future's so bright you gotta wear…
We're with you man. Sometimes business sucks. Many times businesses fail. You've learned, you've dusted yourself off, you're trying to make it right with those who worked with you and depended on you. Now all you can do is get back on the bike and plan to take over the world again. One step at a time.
Welcome back, friend.
Stuff like this only makes you stronger, Matt. You're entrepreneurial spirit and experience will benefit you in whatever you decide to do long term. Congrats on the new role and hope to catch up with you soon.
Cheers,
Morgan
I'm glad you were back out last night. You've been missed.
Bravo. Well said! You are an incredible asset to this planet.
Ditto!
This is always a great solution to any troubles anyone might be having:
http://www.youtube.com/watch?v=UWRyj5cHIQA
I don’t know you but certainly felt your pain, I myself have been thru that scenario and am almost on the other side of it. I feel alone, lost sort of, not a man of my word. Let my family down and so on. To top is all off is I am having a great difficulty finding work in this economy so I push on in another entrepreneurial endeavor, I know my wife thinks I am crazy, maybe I am. The hardest part of it all is the loneliness. I would love to just sit down over a beer with a friend that understood.
I am at least left with knowing I have a great talent that could be used somewhere and I need to keep going “forward”
Thanks a great deal for posting this brave letter. I can tell that you will prevail and I would like to follow your story.
I friend you just don’t know yet, Larry
Matt,
I don’t know you but if you’re a friend of Peter Bordes’ that’s good enough for me.
What an amazing letter — thank you for sharing. Writing that must have been a catharsis for you.
And with your mindset the best is yet to come!
LIVESTRONG!
Thanks so much for all of the positive feedback everyone. It is all very encouraging.
Here is to 2.0!
Failing Forward: A lesson in business, life, and relationships http://mattbrowne.com/blog/failure/ an epic entrepreneurial tale for all.
Hey Browne!
Just wanted to show you our support. I know the lessons learned were not easy but we are so happy to hear that you are moving in the right direction. I know the last couple of years have been tough and you are under a lot of pressure – but you have a lot of fans out here that will love and support you and your family NO MATTER WHAT! Thanks for sharing your story –
DOM
Well said. THANK YOU for putting all this out there. We’ve all missed our normally up-beat, hyper motivated, always excited friend and hopefully this is a step in the process of getting him back
Keep moving forward and don’t forget that the amazing people you’ve surrounded yourself with are always here to help when we’re needed!
Matt, I’m sorry to hear this.
I wrote a similar post a while back. It was tough to do at the time, but life has been better because of it.
It’s a tough situation, but I know you’ll do well. Let me know if I can help.
Hey Matt,
How refreshing it is to hear a human being speak from the heart honestly. I’m so tired of asking “How’s business?” and everyone saying “Oh great…no problems here…”
Sometimes the best thing to do is be honest, move on, and get yourself in a better situation sooner.
I really hope everything works out for you and your family.
Keep in touch.
Your Z57 alum…
Matt,
I was as sorry as I was surprised to learn about this. You have always shown the utmost integrity in our business, and I know you will endeavor to persevere.
Good luck, Amigo!
Matt,
I watched my resturant fail almost in concert with your busines. I made many of the same mistakes and wasted a lot of energy attempting to dig out! I think about those broken promises every day! But we are the rare breed..We are the resiliant Class..we will be better positioned when the economy does stabilize. We will be successful And we will feast from the fruits of our labor. I thank you for that letter..