in 2018 I started one of the world's fastest growing online businesses we made millions of dollars in sales and helped a lot of people Let Me Take You Back to Where it All Began it was late 2017 and I was at a Crossroads at 23 years old I was living with my parents and I had just failed University and a string of businesses and I had $0 in my bank account All I Ever Wanted at this point was To Be A Millionaire and I was very close to giving up questioning all of my abilities wondering
if I had what it really takes to be successful I'd sit there at night watching people on YouTube wondering if I was smart enough to become rich and one day I was scrolling through Facebook and I came across a post that changed my life forever it was a mom who was making weighted blankets for her autistic child and there was a lot of hype around it there was so many comments saying where can I get this where can I get this but unfortunately she wasn't selling so after some research I found that there was actual
scientific evidence supporting the benefits of weighted blankets for anxiety sleeping I thought I could be on selling here and the the science actually backed me up even though I was honestly down and out from so many of my other business failers I decided to give this business thing just like one more shot if it failed I'd go back and I would never launch another business I would just go back to videography and just travel the world so the first thing I did was I went on to Alibaba to look for my supplier but I couldn't
find any listings that even mention weighted blankets and it turns out that this was actually a good sign I was very very early to the trend if nobody was Manufacturing them nobody was actually selling them and because of the Facebook post I already knew there was demand so using all of the money that I had left and I was just doing some videography clients here and there just funneling it in I managed to get this beautiful sample of a 7 kilo weighted blanket from China it was gray it was stunning I honestly couldn't afford a
full order at this stage because I was just so broke from like all my last failures I then had to get my mom and my girlfriend and my neighbor's child to actually model the blankets around the house I couldn't afford an actual model or photo shoot and I was just taking photos and then I just set up a basic Shopify store I launched the store on a Saturday night and set up like the worst Facebook ads you've ever seen not knowing how it was going to go and also knowing that if I didn't get any
traction initially I was just going to run out of like money in a few days within a few hours I just heard that Shide kaching instantly it was just complete relief it just kept coming in kaching kaching kaching and we did over $1,000 very very quickly for a month pre-order meaning that we didn't have the product but we were going to ship it in a month and people were still willing to purchase now and wait this was just a huge validation I remember thinking okay I'm going to be an overnight success in our first year
we made over $10 million in Sals and $1.5 million in profit the second year that number grew to $2.5 million in profit it was a crazy feeling trying to launch businesses for 6 years straight constantly falling short then suddenly this happening what really just yeah felt like overnight we scaled quickly hiring an amazing team overtaking our competitors achieving the number one spot on Google for weighted blanket and we really kind of became synonymous with the product people would say oh I'm going to get a calming blanket rather than a weighted blanket we were also helping
people we had amazing reviews I started to dream even bigger thinking about how big I could take business I got an offer to sell the business for over $10 million but then around October 2020 upward trajectory just completely took a sharp downturn and everything changed next 12 months our profits plummeted we went from like 1 month we made 500,000 to losing over like a million doar in the year because of that you know we learned so much from these failures it was only when I took a really hard look at my business that I was
able to pinpoint these three major mistakes that I made if you're an inspiring entrepreneur or just trying to scale your business this is just really important that you listen to what I'm about to say because I don't want you making the same mistakes again so the first mistake that I made was allowing hype and greed to turn me into a poor manager when you start making a lot of money something really funny happens suddenly you get really afraid of losing it you think you're going to be happy but you're actually just scared a common thing
that entrepreneurs do in this situation is they try to repeat their initial success in another secondary business they use the rationale that if business a gets taken away from them at least they'll have business B making money now this logic is so flawed what it does is make suboptimal decisions with your time and resources now I took this even further I launched over 10 brands after climbing blankets which meant that I would spend at maximum 1 hour focusing on cing blankets a week and I was making millions of dollars I was ignoring the need for
tight Financial control and clear C centers for each brand I allowed each business and their financials just to all merge into one big mess under one account it was hard to even know if we were making money because I wasn't sure who was working on what I also hired aggressively and expanded our team to about 100 people I was just so focused on the bottom line as a whole across all the brands so I was ignoring calming blankets communication then just became so complex tracking output was challenging motivating a large team was way harder than
I thought as well now keep in mind this was my first successful business and these were the first people that I have ever hired and the main mistake that I think I made here was nobody in the company was properly incentivized whether calming bankets lived or died or thrived and I failed to realize also that the beauty of e-commerce is that they can stay lean you can hire vas you don't need to hire full-time employees and they can work on a fractual basis the final thing to summarize is a David saxs quote which is the
benefits of synergies are hypothetical but the benefits of focus are immediate we lacked focus and paid the price we ended up restructuring our entire organization and each business became its own entity with dedicated teams and clear profit centers this is how it should have been set up for the beginning but it was just too late now the second mistake was not having a basic product strategy we expanded into new brands new products without a clear strategy launching variations of the weighted blanket such as like a hand waven weighted blanket silver iron weighted blanket bamboo weighted
blankets would keep our customers just constantly coming back this approach just didn't work it diluted our brand and Confused our customers we just also moved far too quickly not giving each product drop a proper process you see each product that you drop on e-commerce should have a clear unique selling proposition that creates the ability to acquired new customers at a profitable acquisition cost on Facebook in my current successful Brands we do this very well we spend so much time thinking and planning about new products then crazy came up my brand the Udi entered the market
as a cheaper alternative yeah I know what you're thinking it's pretty stupid that I started competing with my own brand they focused on a lower cost product making it possible to sell a cheaper product using their massive size and brand strength the problem was the Udi was also using the same marketing channels as king w at was even worse than Kart OD ended up becoming probably the number one seller of weighted blankets in Australia but this comes back down to product our initial product strategy didn't provide the long-term leverage we needed and our only defense
was our brand and our high quality product the results customers just kind of flopped to this lower end of the market our brand just wasn't strong enough to retain customers and we lost a significant market share we didn't have a clear product flywheelers like Udi where we create different variations of the udies and drop them month- on month I realized that we probably should have had unique painted products or licensed designs so that people like Kmart would have to stuck us or better yet if we had really beautiful and unique products our Revenue would have
climbed and we could have even just created our own beautiful stores now this brings be our third mistake that we failed to do and this was planning on multiple fronts but mainly inventory in e-commerce stuffing up your inventory levels can send you bankrupt we launched too many products without proper inventory forecasting in place which meant that all of our money was sitting into inventory in the mess of rapidly scaling we began selling out of our top sellers of cing blankets and we didn't even notice so we were forced to advertise our non-top Sellers and these
had very very bad customer acquisition cost and it also really ruined our brand image as well we then had to clear a lot of this inventory at a loss so that we could restock and our good inventory even during Peak Co times when demand was high we were still unprofitable because we couldn't get our top selling products in stock compare this with the supply chain crisis that happened iOS 14.5 with Rising acquisition cost and suppliers were taking forever as well we just couldn't get our inventory under control so why am I sharing this story because
I want you to succeed by learning from my mistakes trust me successful people fail even more than unsuccessful people anything that I kind of want you to take away it's these six important lessons that I learned from this failure first don't scale faster rapid expansion can lead to inefficiencies and increased risk instead growth should be be sustainable and well-managed second Define a clear financial reporting and strategic plan if you're unsure about your Financial Health don't hesitate bring in a fractual sea level employee like a CFO to get things cleared up next focus on product and
Market diversification even though our initial product strategy worked it wasn't defensible in the long run we should have developed these unique products and built a product flywheel but there's always a kicker here you don't want to do that too early or too late next is get your team structure up ensure clear roles and responsibilities while incentivizing those who have power in the business with financial reward next is recognize and act on issues quickly don't wait too long to Pivot when something isn't working the parto principle or the 8020 role is critical focus on the 20%
of activities that drive 80% of your results and lastly this failure taught me the importance of focus and humility not every Venture succeeds but every failure is a lesson so where is cing blankets now now unfortunately alongside with a lot of my other e-commerce brands that were ranging from small profits to very unprofitable I decided to turn them all off I now focus on the udie my investments YouTube and daily Mentor if you like today's video Hit subscribe and if there's anything you're struggling with on your business Journey just either join daily Mentor or join
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