Why I Shut Down a Business Making $3,000 a Month

My Bible app business was doing great and didn’t require too much of my time, so I started a virtual assistant business called BackOffice.

It grew quickly because our customers loved us, and then I promptly gave up and shut it down.

What happened?

The One-Two Mistake Punch

I like starting small and “doing things that don’t scale” so at the very beginning it was a 1-man show. I literally did every task for all my customers.

It was too much work and we were growing so I hired my 1st employee. Exciting!

But then I made the 1st half of a big mistake.

The 1st Half Mistake

I interviewed dozens of people and ended up hiring a friend, Jennifer.

She did great work but I mismanaged her expectations.

For example, I didn’t tell her she’d need to use her own computer. I assumed she’d be cool using the MacBook Pro she already owned, but you know what happens when you assume…

I also messed up by trying to bump her up to full-time work too quickly. She came on with the expectation that she’d only be working part time for at least a few months.

I’d told my customers that she’d soon be working for them, so when she quit I had to go back and tell them what had happened.

The 2nd Half Mistake

The 1st half isn’t that big of a deal. An employee quit, so what? This happens all the time.

The 2nd half was the real problem. It was how I reacted.

I took her quitting as a huge emotional blow.

It’s a classic example of overthinking something to the point of literally inventing a problem in your own head. To the clients nothing had even changed and they couldn’t care less! But in my mind I had “failed” and it hurt, and I didn’t know what to do.

One prepaid customer was a partner at a well-known VC firm and I was scared they’d realize I was just a one-man shop.

So I refunded them their money(!) and made recommendations about where else they could look to hire someone(!!)

What a stupid thing to do!

I should have plowed through and just did the work myself. I should have hired a new employee ASAP. I should have kept going.

Instead I made the excuse that “productized services suck” because your product is other humans and relying on them is hard.

What an embarrassingly lame excuse. (Productized services can be an awesomebusiness, obviously, as there’s tons of them doing really well. And no matter what business I start, I’m going to need to rely on other people!)

My 2nd mistake was that I was emotionally weak. The path forward wasn’t what I’d anticipated, and instead of adapting I wilted.

I invented a problem to give myself a way out.

No Boundaries… on Excuses

Let me give you another example of turning 1 mistake into 2.

A lot of my first customers were locals. I had one in particular who felt the need to discuss a lot of issues in person at my home office.

As a virtual assistant I never expected someone to meet me in person multiple times a month. It sucked. She was a really high maintenance client.

My 1st mistake was letting her come to my house even once. Dumb, but it happens. No big deal.

The 2nd was not pushing forward and figuring out a solution.

Mistake #1 is just the excuse. Mistake #2 is the real failure.

It’s not like I was the first person to stumble upon a tough client. It’s not like a million people haven’t already figured out how to fix this.

No one is a special snowflake. 99% of business problems have been solved before by someone else.

I could have “fired” her as a client, told her not to come over anymore, or done any number of other things to fix the situation.

But I didn’t have the mental toughness to figure it out.

Shutting Down

A few times after being unable to adapt I emailed all my customers and told them I was shutting down. A lot of them were really surprised.

The sad thing is that shutting down was a huge relief. That’s how I know I was making excuses. I was just looking for a way out.

You Owe It To Yourself

This little story has a few important takeaways:

  1. Any business you start is going to run into problems. The grass is always greener and other types of businesses will sometimes look “easier”. Even the holy grail of entrepreneurship (software recurring revenue with 80% margins) can find excuses: “There’s so much competition! My product is boring so marketing is hard!” etc.
  2. Every problem has a solution, it just might be painful. The good news is that we use the word “pain” but it’s actually just emotional pain. It’s having to change your previous mental model of how you’ll succeed. That’s easy to say but hard to do. Do it anyway.
  3. Don’t give up. You only have so much time to live so you owe it to yourself to keep going. Do a little more every day, keep going, and eventually you too can become a 10-year overnight success.

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