The journey of entrepreneurialism can be as individual as a fingerprint, as was learned during the small business panel discussion led by The Wall Street Journal's Small Business Editor Vanessa O'Connell, during a private breakfast for delegates at World Business Forum. What motivates one to start a business, the challenges met along the way, and the obstacles that become opportunity are all part of every entrepreneur's unique story.
Published on: Thursday, November 01, 2012
How They Successfully Built It â€“ You Can Too
But commonality lies in their passion to keep moving forward, despite setbacks, slammed doors or lack of funding. The three start-up entrepreneurs on the WSJ panel, where ExecuNet exclusively reported, have met the gamut of experiences on their pathway to success, and shared what they learned along their individual upward trajectories.
Alexa Hirschfeld is co-founder of Paperless Post, an online invitation service that launched in 2009. She had to "prove" her business model by first raising $1 million dollars in private money to show revenue traction before securing bigger funding that reached $12 million.
Paperless Post runs as a "freemium" service, whereby some functionality is free to users and at higher levels — premium — is paid. As an example, Hirschfeld cites their best-selling product, envelope liners, created about a year after Paperless Post launched. "My brother thought we needed to make these but I didn't, so he went off and did it with one of our developers."
Hirschfeld admits the initial pricing structure for the envelope liners was "terrible and didn't make sense. But it taught us we have a lifestyle product. We had to figure out how to have a free product and not cannibalize the paid product."
That "figuring it out" is a common trait for entrepreneurs who often don't have a guidebook, successor or executive team. For Jonathan Adler, founder and co-CEO of Jonathan Adler Enterprises, a modern home furnishings company, didn't have a business plan.
"I'm a potter and never intended to start a business," said Adler. "When I was 26, I started potting, and my parents said I better sell a pot. I bumbled along, and while Alexa had a business plan and raised $13 million, I was borrowing money for rent. I'm an accidental entrepreneur."
Adler said he came into the business completely backward and "had a million disasters along the way,â€ eventually building a 22-story home furnishing empire over 19 years. "I only went 'varsity' eight years ago," admits Adler when he took on private equity partners.
"Similar to Jonathan's trajectory, I had 10 years of darkness, and now I have private equity partners," said Daniel Lubetzky, founder and CEO of KIND Healthy Snacks and chairman of PeaceWorks, Inc. "Getting too much cash up front can be dangerous because you can use it," which would limit an entrepreneur from making the kind of valuable mistakes one would learn from.
PeaceWorks, a food company where products were co-created by Arabs, Israelis and Palestinians, said Lubetzky, was borne out of his passion to make peace in the Middle East. "Initially I made a ton of mistakes, and I started out of my basement. I was unsophisticated and dumb, but there was opportunity. KIND came out of the mistakes we made on the Peaceworks products. Four years later we got $15 million from PE."
Adler said that he also had many mistakes along the way but none came with regret. "I've learned from them, and it's been experimental. You can try, try again, and no one is keeping score."
"A flop will inform success," said Lubetzky, recalling a product he launched out of "greed" for more shelf space, rather than consumer consideration. "It's extraordinarily dangerous, and you should never forget why your consumer buys your product."
The result? "People didn't only not buy the product — we broke the brand promise, and they stopped buying the brand. My lesson was to be true to your brand, and keep your brand promise," said Lubetzky. "We now have the top 12 SKUs in our categories. We are obsessive about keeping our brand promise. Because of our obsession, all our products do very well."
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Robyn Greenspan is ExecuNet's Chief Content Officer, where she is responsible for setting and driving the editorial content engagement strategy across the private business network's publications and expert-led programming. She is also a Huffington Post blogger. You can follow her on Twitter @RobynGreenspan
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