7 Painful Failures I Suffered as an Entrepreneur Online

Being an entrepreneur online is challenging.

Building a startup is not easy and I hope by sharing my failures, I can ease your growing pains and give you more courage to go forward!

The biggest misconception I had about being an entrepreneur online was the amount of pain it would involve.  In 2011, I started my first website and launched my business online because I wanted to help people.  Within a few months, I had hopes I could run my business full time and miss out on the certain suffering finishing a PHD program brings.  What I did not know was that starting my business online would come with a lot more intense and unpredictable pains.  I hope that by sharing some of my failures with you that I can help you avoid making some of the mistakes I did and ease the pain of handling some of your own.  If you know that having a bunch of painful failures as a startup is normal, then maybe pushing through the ones you have will not seem so impossible.

  1. Google AdWords account suspensions.  The first failure I remember that hurt bad was my first Google AdWords account suspension.  After six months in business, I went from helping people with video game addiction to helping people get more likes for their Facebook pages.  Since the feature was brand new, hardly anyone knew how to use it and buying Facebook likes was a hot new business.  My first success with online advertising producing an immediate positive return was bidding on the terms “buy likes” in Google AdWords and then providing the likes for people clicking on the ads.  I spent around $500 in a few weeks and made over $2,000 in profit.  After six months of struggling to make anything online, this was my biggest success until it wasn’t.  I had an awful looking website offering services that both Facebook and soon Google found distasteful.  While Google generally will take several actions before suspending an account, Google immediately suspended my account and banned my original company website from showing ads on AdWords.  The moment I saw the email felt like a punch in the stomach and I still am scared of getting every AdWords account banned to this day whether I am making YouTube ads for my new website or ads for a client.  I have not yet got a client account suspended from AdWords and not yet had any problems with my YouTube ads but the sensitivity remains more than two and a half years later.  I learned that if something is working I had better get the most out of it while it lasts.
  2. Facebook headquarters manually banned my entire URL.  Perhaps creating a mobile ad campaign with mMedia targeted to San Jose, California where Facebook headquarters is located and offering to sell guaranteed Facebook like packages was a bad idea.  At the time, I thought it offered more potential than downside and wanted to see if Facebook would approve of me offering to deliver guaranteed likes using Facebook ads.  The entire service was setup to encourage people to pay me to show Facebook ads which obviously then makes Facebook money.  You could imagine my confusion less than 24 hours after the ads started showing to see my entire website get manually banned from Facebook.  Someone from Facebook headquarters took the time to report both my Google site I was using to land the ads on and the main site I was doing business with online.  They even removed my Facebook page cover photo showing my ads getting low cost likes but thankfully did not ban the page.  Google sites suspended both of my websites making the content on them irretrievable.  Fortunately, I had several backups but it took hours to copy one to another Google sites account that would not get automatically suspended.  Meanwhile, my company email addresses no longer worked on Facebook and I had to remove and change all of my company emails from all of my pages and profiles.  My website URL had been included in tens of thousands of Facebook messages and never got more than a temporary block.  This new block was complete and the only solution was total removal of my site in all forms.  No forwarding or any other workaround was functional and nearly a year later, it is still banned as completely as Empower Network.  This motivated me to start a new website and plan my future strategies with more resistance to tampering and less opportunities for problems.
  3. Parkway Cinema 8 movie theater advertisement costing $2,800 gets a return of $0 complete with two leads.  This was my Dad’s favorite failure because he told me this was a bad idea from the beginning and he was correct.  The closest movie theater to my house offered a spot to advertise for less than $400 per month where an advertiser could get a 30 second spot before every movie.  What a deal right?  I got a video made on fiverr that was more engaging than any of the other ads running at the time and I bought an entire year because I got several hundred dollars off.  The problem was that I only got two leads that I can confirm were from the movie theater and am certain I never made a $1 back from the ads there.  Lots of people took my business cards but with a website that was awful combined with an audience of mostly retired people and their grandkids, saying I told you so was pretty easy.  This was my first expensive failure since $2,800 after less than a year in business was more than I had spent on any one ad campaign at the time.  What I learned was that I should always start out small if possible regardless of any big discounts and never assume I know what will work.
  4. Chamber of commerce trustee invests hundreds of hours and thousands of dollars and makes $300.  Months after my movie theater ad started showing and right when I quit my graduate assistantship and PHD program, I decided I needed to be more involved locally despite having made more than 95% of my money online.  The Greater Sarasota Chamber of Commerce seemed like a good place to do that.  Looking at the existing members, I would be one of the only people offering help with online advertising.  While originally I had tried to solicit business with the chamber, the smooth sales lady left me walking out with an $1,800 chamber trustee membership which cost more than five times what a regular membership did and led to spending thousands more on the related trustee events.  I spent hours going to chamber meetings, networking, sharing my sales pitch, and somehow none of that translated into dollars until January when I landed a $300 consulting deal with a local web development company.  At the time, this was exciting since my credit card debt was swelling after getting married, buying a house, and six months in a row of posting a loss.  Five months later after hosting a trustee event that everyone said was one of the best ever and still not getting any business, I stopped going to chamber events.  I realized that my mistake with the chamber once again was investing a lot in an unproven system for success.
  5. Over 70 people hired on oDesk and more than $10,000 spent with less than a 20% return.  My first and most successful method for making money online was to send messages on Facebook offering to help with building page likes and ad campaigns.  My largest client today originally connected with me through a Facebook message to one of his client pages.  My business partner Joseph was even more successful sending the messages because he focused completely on sales instead of trying to serve the clients too.  In four months while working around 5 hours per week, he made about $10,000 in commissions which translates to $125 per hour effective pay rate.  This was my first huge success with around $10,000 in profit just from his work and much more from my own messages at a time when my business was dangerously close to expiring.  After getting all my debts paid from the year before, I thought I should scale this proven effective method up.  Nearly a year after the movie theater ad, I had learned to grow more steadily and invest in what I knew worked.  I bought additional Facebook profiles to use and after four months, Joe and I had around 8 people and profiles we were using to send the messages.  My Xbox friend Ethan somehow got his entire profile banned after only sending a few messages.  With clients coming in faster than ever, I looked to oDesk to outsource sending Facebook messages as Joe was starting his job as an accountant and I now had too many clients to send messages myself.  During the first round of hires on oDesk, I found more than 20 people with profiles that could send the messages and find the pages.  They usually worked for between $1 per hour and $5 per hour.  Their first campaign got my website spam flagged on Facebook but not before I brought in a few thousand in revenue including a huge client.  With this first success, I found new ways to work around the problem of sending my spam flagged URL in Facebook messages and hired more than 50 additional people with many working full time to help send the messages.  While the movie theater ad at $2,800 a year before had been my largest single investment at the time, my oDesk workers were now costing around that much every week.  Within four weeks, I realized my new strategy had a critical flaw.  The URL and replying to messages were critical to converting sales because most people were not willing to search for a website and converted through conversations.  After burning through over $10,000 when I was finally out of my credit card debt for the first time since starting my business, I then had to end the contracts on all of the workers I hired and resume charging my bills instead of paying them.  On top of the money, I spent weeks working on this oDesk project instead of serving my clients first and I lost most of the bigger clients I had worked so hard to obtain.
  6. $8,000 accounting mistake plus huge estimated tax bill equals not fun.  After my oDesk Facebook messaging mistake started catching up to me in 2014, my financial struggles quickly mounted as my revenue dropped way faster than my expenses.  In the middle of being it worse credit card debt than the year before, I got hit with a punishing tax bill from 2013 after my first year making a profit plus make a big accounting mistake.  In working with my largest client, I had been managing large agency budgets. While I usually was very meticulous with entries on my spreadsheet, I had a moment of inattention to detail where I recorded a duplicate entry and did not notice this for a month.  I sent them a panicked email telling them they were over budget and would need to pay extra before I could keep running their ads.  The CEO of the company was very kind and immediately sent the extra money without asking questions.  A month later, I noticed the error and told the CEO what had happened.  He quickly found new ad campaigns to use the additional budget and gave me the impression he had been waiting for me to find the error before he gave me a bigger contract for 2014.  Within a month of reporting the error, we had the new contract signed.  I learned that no matter what kind of mistake I make, the main value proposition I offer is trust and I must always be honest about my mistakes when working with people no matter how much it hurts my pride.
  7. Eight mobile app focus group tests rejected.  My newest painful failure started with having many mobile apps to beta test in a focus group.  As the US part of an international project for my largest client, my company is responsible for testing apps popular in another country for release in the US.  The trust and ability to complete challenging projects I offer was able to overcome my short time in business and lack of local employees due to my practice of using oDesk and freelancers exclusively to do all work for my company.  With more than 10 tests to do, the planning and executive of these tests was the most challenging single project I have ever taken on.  Within a few weeks of getting started, I had completed my first two tests I did exactly where I had planned to do them with the ideal people requested to participate.  I had a Chris Abbot, the CEO of a mobile app development company at the HuB that was kind enough to participate on his lunch break and Pete Peterson, the CEO of Dealer’s United along with more than ten people from his company and others testing the apps.  They gave awesome feedback I recorded on video and completed surveys about the apps.  I submitted these tests to my client and they were both rejected because I had failed to record the group discussion for at least 30 minutes.  Given this would have required much more than a lunch session to test and would fall outside of most people’s definition of “fun”, I realized there was no way I could do this as originally planned.  I then approached Ad-Vance, a local staffing agency that has been remarkable for helping me get people to do the tests.  I completed six additional app tests with more than 30 minutes of discussion video for each and was happy to pay so many people to participate.  My client was happier with these tests and requested a few small improvements with them.  They presented these tests to their government and all were rejected.  With September release dates for many of the apps, they have asked me to do all of the tests again as soon as possible at the HuB.  I tried on Friday to get ten people together at the HuB and offered as much as $200 to participate.  Everyone except Chris Abbot and Bob Poole said no and I was lucky enough to get four temporary employees from Ad-Vance on less than 2 hours of notice to complete a test with seven instead of ten people.  Friday was very stressful and I put off doing all of my other work such as updated my Udemy course to get more sales during the special they are running and doing what I love to do which is creating Udemy courses, videos, podcats, and blog posts for you to enjoy.  By this part of the week, I had to take Tuesday complete off for my health and tell my biggest client for the first time that I could not do what they needed this week but could do it next week.  While all of my existing failures plus hundreds more I have not listed have been resolved in some way, this failure is still pending and I am still hoping to turn it into a success.

What I think the point of sharing this with you was is to show that being an entrepreneur online is challenging to start with and gets harder with more success.  The fast you grow, the bigger your problems get and the more absurd situations you will start finding yourself in.  Slow and steady growth seems to be ideal for me.  Doing what I love to do and what is good for me for the long term every day is what I need to do to be happy.  I am sharing this with you now because creating online courses, videos, podcasts, and posts on my website builds long term value.  To date, I have solved most of my problems with short term solutions.  This approach worked great for getting more money when I needed it and making rapid advances.  It is a miracle I built any long term value in the last year on Udemy and YouTube.  After a year of seeing how successful I can be with little effort each day on what I love to do and what helps the most people, I know I must put first things first which is doing the most good for the most people.

The biggest mistake I have made as an entrepreneur online is not putting first things first.

With my own business, feeling like I love what I do and having energy for doing it every day is the very most important thing.  All good things including money follow from this first step.  When I love what I do, I do it often enough to be good at it and find ways to make money with it.  When I feel like I am working a job, I get sloppy and avoid doing work.  No matter how much I am getting paid at the moment, no one will keep paying for sloppy work that does not get done.  The same as going to work, having my own business is about showing up every day and doing what I need to do that will be best for the company.  What is best for my company is doing the most good for the most people each day.  After that is done, then I can use whatever time I have remaining to do everything else including work for clients and trying to convert new leads.

After reviewing all of these failures, I am grateful to see that my failures reflect why I am here.  I am here to serve my fellow human beings and God, as I understand Him.  Each failure was part of a push towards building towards helping people have more love, hope, and faith in their lives through making online work easier to get started with and more practical for job security.  I remember reading stories of internet marketers buying huge houses, renting private jets, and burning all of their money on passions of the moment.  I am grateful to be living in the same house my wife and I bought less than a year after I started my business, driving the same car, and living a healthier and happier life compared to when I started.  The great failures and successes I have experienced since starting my business online less than three years ago have worked to make be a better person and for that I am thankful.

I appreciate you learning about a few of my failures as an entrepreneur online!

I hope you have found this useful in your own life!

This post is a part of my Udemy course on entrepreneurship online.  Get a huge discount when you use this link to enroll!

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