My first big mistake as a founder was my own ambition (which could be also seen as greed) and confusing the objective with the path to achieve it. But I'm getting ahead of the story.
When I, and my co-founders, founded Agilior, we did an exercise where each one had to describe the reasons (personal or professional), for starting our own company. In my case, there were basically two main reasons.
The professional reason was simple: professional achievement. I wanted to build a brand that would be recognized for his quality, integrity and honesty. I also wanted to build a place that was nice to work, with a culture of friendship, mutual help and wellness. Perhaps too naive, but that was what I thought at the time.
The personal reason was not so simple: getting my "freedom". In that exercise, I remember that I wrote the following sentence
"I want the freedom to leave at 3 pm so I can take my kids to the movies"
Freedom is a term that has many meanings. Josh Kaufman, from the Personal MBA project, wrote an excellent post on this feeling of wanting to build a business that supports your life. This freedom it's all I ambitioned and it was my personal reason to build my own company.
Of course this freedom presupposes a set of assumptions, which would imply an operational distance in the medium term. When I speak of operational distance, I mean not having to be involved full-time in the implementation of the projects we were developing. And to do that, we had to grow the company.
Some time after founding Agilior, I realized that much of this freedom that I wanted to achieve, I was already getting it, and that it wasn't necessary to grow the company. I started to managing my own time in my own terms, which allowed me have more free time for myself and my family, and able to work at "less common" hours. I never compromised my team, and I know when we work as a team, it is important to have the team members working at the same time. But the fact is that the freedom that I had ambitioned, I already had to a large extent.
The big mistake happened, when I became obsessed with growing the company to increase my operational distance, though, in retrospective, it was not necessary at all. When I and my co-founder were approached for the 1st time, by another company, to sell to them a part of the company, I saw it as an opportunity to make the company play in the 1st league (we were a small niche shop and profitable since day one), exponentially increase in sales, grow the company and have more freedom. And I can say it was me who insisted more on this step, thinking that everything would go well.(damn wishful thinking)
What happened was that the we sold 60% of the company (a few years later we would sell the remaining shares). What did not happen was the growth in sales (at least not in the promised terms), yet the company heacount has grown.
In the first transaction, we lost the financial control of the company since we now had only held 40% of the share, however we agreed that we would continue to have the operational control, allowing us to veto any decisions which we did not agree too. There was also a period of experimentation, where either party could roll back the transaction. During this period, no major changes occurred, except that we were “given” the opportunity to work on a new contract, a larger one compared to the ones that we were being used to. When the trial period ended, we decided to not rollback the transaction, and start working as a business partners.
In a retrospective the first transaction, we made the mistake of not writing on paper the expectations of each party.The trial period was not enough. And more important than to write the expectations, is to write what should happen if the expectations are not met. It is really really important.
What happened next, as I said earlier, was that sales have not grown . Moreover, most of the sales continued to be closed by my co-founder, and others by myself. The expected growth of sales was not met. But the other side started pressuring that we were not having the revenues as high as we should.
At some point, we realized that it was not worth continuing with this model, and we approached the other side to buy back the shares. The proposal was not accepted, and then we proceed with a proposal to sell the remaining of our shares. I am currently an employee of the company.
At end of the the day, I lost my freedom. And this was my biggest mistake. I was much happier with the company with three employees, with full autonomy in decision making, personal life, etc.. I was betrayed by my own greed.
A mistake not to be made again. If you ask me the reasons which lead me to make a company, I think I will answer it in the same way. Maybe I will place more emphasis on doing something what I really love. But the path will certainly be different. The most important thing is the path, and not the end. The path must give me the freedom that I want. There are times we have to do some trade-offs, I have a family with two children, and have to put the food on the table. The problem is when our greed goes far beyond our need and obscures the clarity of thought. Recently I read the book Anything You Want from Derek Sivers, the guy who created CD Baby. I loved the book, and I know understand Derek when he says
"I’m a minimalist. The less I own, the happier I am."