WEIR Dom Fendius on What it Felt Like to Shut Down One of His First Startups and What Kept Him Going as an Entrepreneur
WeWork Labs WEIR Dom Fendius is a serial entrepreneur and host of the Fail_Succeed podcast. Here, he shares his experience with shutting down one of his first startups when he couldn’t make the economics work, and why the experience actually motivated him to keep going on his startup journey.
“I started my own company when I left university in 2002. It was a complete disaster in the sense that I didn’t make any money, but it was a great experience because it gave me the desire to carry on with startups. Even so, I went and worked in finance for a couple of years after that. It wasn’t for me at all and I thought, I’ve got to get back into the startup world.
I had an idea for what you’d now call a social shopping site in 2007. I liked going online and looking at pictures of what people were wearing out to nightclubs and getting style tips, and my idea was to make those photos shoppable. This was pre-iPhone so it was all on the web. And there was not a very elegant way of doing it. I came into this with no tech background at all so I was hacking together the most basic version of a site with the help of a developer. We started going to fashion bloggers and getting their photos, putting them on our site, and enabling the user to scroll over each photo and get the details of each item of clothing, like cost and where they could buy it. We called it Stitsh. Nowadays there are few things like it, with Instagram being the obvious one.
It was a really exciting time. Even though the site and functionality were rough, it resonated with people. Our big breakthrough came when Women’s Wear Daily wrote a decent-sized piece about us. Then we were written up in The Guardian, too. People within the fashion industry were telling us that what we were doing was amazing and was going to change the industry, that social networks like Facebook were going to start doing this and sharing the revenue with us.
That was the high. But as time wore on, the challenges started appearing. It become obvious that the economics didn’t work. It was all based on affiliate revenue and we weren’t getting large enough orders to make much money. And we were working with that you’d call fast fashion, not high-end designer clothes. Affiliate fees were five percent or less, so imagine how much you’re making when someone clicks and buys a 20 pound top. People were telling us we were going to be huge and needed to raise money, but then they started putting us under the microscope and questioning how we were going to scale.
I was new to this and in a sense, pretty clueless. I had no idea what metrics like cost of acquiring a customer or lifetime value of a customer meant. And on top of that, my friends who were working in investment banks were all looking at me like I was crazy for starting this company. Stitsh wasn’t working and I felt very much that people viewed me as a failure. I thought I was the problem; that I wasn’t up to the challenge.
Even though I could see that it wasn’t working, I tried to hang on for too long. I thought, I have to make this work because if I don’t, I’m a failure. You have to know when to call it quits, and I didn’t for a long time. But gradually, I could see that the business was falling further and further away from what I wanted it to be. Though I don’t remember the exact point when I decided to end it, eventually I realized that I couldn’t make it work. It was affecting my home life, my well-being, and I wasn’t in a good state. So, I shut Stitsh down.
It was devastating, but it didn’t put me off doing startups. In fact, it made me hungrier for it. And it taught me so much. It even led me to my next startup, which ended up being a men’s e-commerce app. I probably should have taken more time after Stitsh to regroup, but instead I jumped back into another startup a few months later. I needed to prove to myself that those feelings I had about my ability to succeed weren’t valid and that I actually was good enough to launch and grow a startup.
There was something other than the need to prove myself that motivated me though, and keeps motivating me today. My dad died of lung cancer when he was 58. He was an entrepreneur and losing him made me realize that life is short and I don’t want to spend it doing something I’m not passionate about. I was never going to be passionate about being stuck in an office, working for someone else. I wanted to build something positive that loads of people used. I didn’t want a ‘normal’ job and I committed myself to pursuing something that gave me a sense of meaning. It’s what’s gotten me through the tough times. That, and acknowledging the fact that when you’re in the midst of things at a startup, it feels like you’re constantly struggling. But you learn from the mistakes you make and you build on what you learn. You take something you’ve learned into each venture you do and hopefully, it pays off.”
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