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069 - Fail fast, fail cheap

In business you’re unlikely to get everything right on your first attempt, so learn to embrace a testing culture. Talk to any successful entrepreneur and they will tell you about all the mistakes, failures and missteps that they had to go through before their business found success. This is because before you launch a business, every decision you make is just your best guess based on your life experience to date. So your job as a business founder is to prove – or disprove – an idea as quickly as possible meaning that you can save your time, money and energy for the things that work and move on quickly to the next thing if they don’t.

Every time something fails, you learn crucial information; each failure gets you one step closer to the thing that is going to make your business a success. So keep an open mind about what your business might become and learn to fail fast!

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Episode transcript:

Hello and welcome to episode sixty-nine of The Vegan Business Tribe Podcast with myself David Pannell, co-founder of Vegan Business Tribe.  And if you have a vegan business, or are thinking of starting one, then Vegan Business Tribe is here to support and inspire you not just to build a vegan business, but to build a SUCCESSFUL vegan business.
 
And you might have seen that we’ve just announced our first speakers for Tribe Live 2022, which in case you missed the announcement a few weeks ago is going to be a full weekend of Vegan Business Tribe Live at the London Olympia in November as part of VegfestUK.  And so far we’ve been able to confirm that we’ll have Thibault Guenat, the growth and sustainability manager from Minor Figures who will be talking about how Minor Figures took on Oatly, also speaking will be the founders of some of the UK’s best-known vegan businesses including Mike Hill from One Planet Pizza and Steve Swindon from Love Say tan who will be talking about their scaling-up journeys.  We’re also really thrilled that we’re going to be joined by Louisianna Waring, the Senior Insight Officer at The Vegan Society about the next big trends in the vegan sector which will be a completely unmissable session.
 
But we’re also going to be joined on-stage by some of our amazing Vegan Business Tribe Members over the weekend, including Jim Moore – and if you’re a podcast fan you will know Jim as the host of the long-running Bloody Vegans Podcast, who will running a live session on how to produce your own vegan podcast.  And also joining us will be the unforgettable Sue Joyce of Little Green Pigeon rescue centre who will be taking part in a panel session about the realities of running and funding an animal sanctuary alongside a number of other animal sanctuary owners.
 
And I’d also like to give a huge shout out to Keith Lesser of Vegan Accountants who have stepped up as our partners and sponsors of Vegan Business Tribe Live.  Keith will also be one of our speakers and Keith and his team will be around all weekend to give advice to anyone running a vegan business. And if you want to find out more about Vegan Accountants and what they offer then go check out veganaccountants.co.uk
 
That’s just our first announcement of speakers and we’ve got a lot more people that we’re working on at the moment to be speakers over the weekend that we hope to announce soon.  And a reminder that if you are a Vegan Business Tribe member then you can also take one of the stands in our Vegan Business Tribe village at the expo.  Tribe Live is part of VegfestUK which is the biggest vegan consumer show in the UK, so we are subsidising 12 stands for our Vegan Business Tribe members at the show to the tune of a £300 discount per stand.  Now, we’ve only got four stands left, so if you’ve been getting the emails about taking a stand but you’re haven’t registered yet, then I would suggest you do so now before they have all gone!
 
Keep an eye on the website for more updates on Vegan Business Tribe Live, and remember the support of our members that means we’re in the position to attempt such a big event, we’re not getting any ticket sales from this, so if you are a regular listener to this podcast and you want to support our mission to help skill-up the vegan business scene – then head over to veganbusinesstribe.com, click on the join button on the homepage and you’ll see all the benefits you get to being a member and how you can support us.  We are so grateful to our VBT members for all their support and joining us will mean you will be part of the most amazing community of vegan business owners you would ever want to meet.
 
OK, so this week we’re talking about something that might seem a little unusual at first, but we’re going to talk about how to fail.  Now, I know that I kick off the podcast every week by saying we’re going to help you have a SUCCESSFUL vegan business, but for most of us, failing plays a huge part in that success.  Have you ever played Wordle?  Now, stick with me on this, but Wordle is the word game that went viral and the New York Times bought from the programmer for a million dollars.  It’s a simple game where you have to guess a random five-letter word.  You start by entering your first guess and Wordle tells you if any of the letters are right – so if you’ve got a right letter but it’s in the wrong place it marks it yellow, if you’ve got a right letter in the right place, then it marks it green and you’ve got six guesses to work out what the word is.  And the thing about Wordle is that your first guess will be wrong, but you will learn something about what the right answer is from that guess; even if you don’t get a single letter you will have learnt what letters are not in the answer.  Your second guess will likely be wrong too, but again, you will learn a bit more about what the right answer is by getting it wrong.  And that’s how the game is designed to be played, it’s not designed to be won on the first attempt, it’s a game of failing until you work out the right answer.
 
And that’s the same with business.  I know very few people, possibly no one, who has come up with a business idea, gone and done that idea and it’s just worked. That would be like getting Wordle right on your first guess, it would just be a pure fluke. But most people approach business thinking they are going to get it right first try. What most people actually do with a business is go through a series of failures, each time learning something valuable, until they have enough information to make something successful.  If you meet anyone who has a successful business, ask them about the ideas they tried BEFORE that business and then sit back and listen to their long list of failures.  Go listen to ‘How I Built This’ with Guy Raz which is a podcast from NPR Radio which interviews successful business founders about the real story behind their success, and every episode you will be treated to a chronicle of failed ideas, dead-ends and missteps the entrepreneur went through before they had learnt enough to build the thing that worked.  Huge brands like Air BNB and Starbucks didn’t just pop out of the ground fully formed, they were the result of a string of failed ideas, each teaching the founders something new about where success actually lay.  Everyone thinks Beyond Meat has been an overnight success story, but they were trading for ten years before you heard of them.
 
And this is because before you launch a business, every decision you take, any product you design, is just a guess.  It’s your best guess based on your life experience to date.  And if you have never run a business before, or if you’re launching into a sector that you don’t have a lot of experience in then there’s a very high chance that those guesses will be completely wrong.  If you’re lucky, like Worlde, you might get one right letter but it’s probably going to be in the wrong place. It’s not until you launch your business that you will find out just how good your guess was, it’s not until you get your products into the hands of a customer that you will start to learn what you got right and what you didn’t.
 
So, if we know this, if we know that the business or new product that we launch won’t be right straight out of the box – that it’s likely our assumptions about what customers want is going to be wrong – then we should build our businesses with that in mind.  When I interviewed Chris Kong, one of the founders of tempeh manufacturer Better Nature for the scale-up video series in our member’s section,  he said that the goal of any entrepreneur should be to try and kill their idea as soon as possible.  Because why spend three or five years of your life on something that is destined to be a dead-end?  And you will have probably heard that concept echoed in the business phrase ‘fail fast’: if you know that you don’t have all the answers then you want to prove or disprove a new idea as soon as possible before you stake everything on it.
 
But I will tag an extra bit on to that phrase fail fast, and that is that you also want to fail cheap.  I got a really good bit of advice early on in my career which was that you should only ever put money into something that you have proven works to make it work better.  It’s why you will struggle to find investors if you are a new business unless you have an incredible record of success with your previous businesses.  Investors are looking to invest in businesses that have already proven an idea with paying customers validating the concept.  They are expecting you to spend your own money and energy first to work it all out, to get the expected failures out of the way before they will put their own money in to help you take that proven idea to the next level.
 
One of the first things that you will see happen when a company gets that investment is that they rebrand, because at that point they have worked out what their place is in the market and what their brand needs to be to speak to their customers – so now putting money into branding, once you have worked all that out and proven the business model, now it becomes a sound investment.  If you spend lots of money on developing a brand and a website and a product before you have even proven the idea, then you may as well take that money down to the casino and pick a number on the roulette table because you’ll probably get better odds. 
 
So let’s translate all this, what does that practically mean to us as business owners?  Well, you might have heard of a concept called a minimum viable product, or an MVP.  This was a business methodology popularised by Eric Ries in his book The Lean Startup, and the aim of launching a minimum viable product is to avoid doing unnecessary work on something before knowing if it will work out or not. Money isn’t your only resource as a business, and sometimes it’s not the most important.  Your energy is a resource, your motivation is a resource, and you want to make sure they are not used up on dead-ends.  So the concept of a minimal viable product, or an MVP, is to create the most basic version of your product or idea so that you can get it into the hands of potential customers quickly to see if it works or not.  If it doesn’t, then you have just learnt something really important to apply to the next version and you haven’t spent loads of time, money and energy on something that would have been a flop. 
 
Take a look at Vegan Business Tribe – we started VBT off completely for free because Lisa and I wanted to prove the idea before we committed our time to it.  We wanted to prove that there was a market out there for vegan business advice and that we could actually convince people to sign-up for an account on a website before we took our time away from our other businesses to develop it.  We built a simple website and used a Facebook advert to send people to it to see if they would sign-up, we spent a few hundred pounds to try out the idea.  And I’m glad we did, because our original idea of what Vegan Busines Tribe was going to be was very different to what it turned out our members actually wanted.  We thought that people would pay to receive regular great business advice in an email every week, when in fact the advice and the content we were producing was just our marketing, it’s what brought people to us.  What our members were actually looking for was a community, and that took longer to understand and to build.  But had we gone all-in with what WE thought the business was going to be on day one, we’d have spent a load of money, time and energy on something that didn’t work and we would have likely been put off trying to do it again.
 
So this is the advice I give to all our members who come to us who haven’t launched yet, I tell them to not spend time on their website and their brand and to just get their product into the hands of people as quickly as possible spending as little as they can to do it.  Before you invest in that amazing packaging, wrap your products in brown paper and see if you can sell them at your local vegan market first.  Because if you cannot prove the concept at a market stall with customers standing there in front of you then you’ve not got an idea that works, and no amount of spending on branding and marketing will change that.  Instead of spending thousands on a new website to launch your new online membership, can you make it work in a Facebook group first?  And if so, what learnings can you take away from that to then dictate what your website needs to be able to do, instead of having to have it built twice – once before you launch and second a few months later when you realise your assumptions were wrong?  Instead of launching that store on the highstreet with all the expense of getting it fitted out and committing to a three year lease, do a series of pop-up shops first to learn more about what kinds of customers you attract. Before you go away and spend all that time writing your book or online course, test out if you can get people to turn up to a live online seminar on the topic first to see if there’s actually any interest in the topic – and if there isn’t then keep tweaking the topic, your message or how you promote that seminar until you learn how to get people interested in it first.
 
Thomas Edison and his team tested out three thousand different concepts before they found out how to make a viable light-bulb, learning a little something new from each burnt-out filament. If we approach our businesses in the same way, KNOWING that failing is the route to succeeding, then we should minimalise the amount of resources that we put into each test, saving them for when we’ve worked it all out and have a proven idea that works.
 
Doing this, however, requires keeping a degree of flexibility in your business.  No matter how far you are with your business right now, you have to stay open to what your business is going to become.  The huge success that will allow your business to make a real impact on the world might be found in a tangent to what you are doing now.  Seth Tibbot, the founder of vegan food giant Tofurkey spent years trying to sell tempeh with moderate success.  It wasn’t until he gave in to the consumer demand for tofu that he then discovered the right blueprint to create a business that now turns over somewhere in the region of 50 million US dollars a year.  Starbucks started out just selling coffee beans for people to make coffee at home, and it took them a decade to realise that if they just added some boiling water to those beans and gave those customers a seat in their small amount of stores then they had an entirely more profitable business on their hands.  That’s why all businesses need to keep testing, and by doing that testing as efficiently and quickly as possible you will get used to embracing each failure as just being one step closer to working it all out.
 
Each time something doesn’t work out the way you thought it would, that’s a really important learning, so embrace it.  Be glad that you found that out quickly and cheaply instead of dragging it out over several years and investing thousands of pounds into something that wasn’t going to work!  But then – work out exactly what you DID learn from it, what piece of the jigsaw did that experience just fill to give you a better understanding of the business you are building? How much closer did that failure get you to the idea that really works?  And this is important.  Don’t just try things out randomly and not track what the results are, you need to learn so that you know what to change in your next test.  So if you are trying out advertising or a new promotion method, you need to know if those adverts got you any new customers – you need a coupon code unique to that promotion that you can track.  If you are launching a new product, then take it to a local fair and get people to try your product while you are there and see what their reactions are.  Do people actually get excited by a new gluten-free vegan cupcake? That’s not an assumption you can afford to make when you can pick one up in most supermarkets from the free-from aisle now; you can’t assume that what YOU think will make your product different is something your consumer actually cares about.  If you have a tech product, then make sure you are collecting all the metrics of how people interact with your minimal viable product, are they using the features you thought they would in the way you expected, how can you get them to leave feedback and tell you what’s wrong with it instead of just deleting the app?  Remember, it’s like a lab test, you are trying to prove or disprove a concept before you put more time and resources into it.
 
And you should never stop doing this, no matter how much you think you’ve worked it all out or how successful your business gets.  Trends change, new products enter the market, consumer behaviour changes, new problems need to be solved.  And as your business does get bigger, that just gives you access to more resources to be able to test something even quicker.  To roll out a new feature, to test a new recipe or try a pop-up in a new location to learn about what kind of customers you would attract in that area instead and if they are different to the ones you attract now.  Fail fast, fail cheap, learn, change and test again.
 
OK, so let’s just run through what we’ve just learned about how to fail – in a good way!
 
  1. It’s very unlikely that your first ideas in business will work out like you think they will.  Any decisions you make before you get your product in the hands of a customer is just a guess.
  2. Almost every successful business you see is a result of a string of failures and missteps where the business owners were trying to work it all out.  Make it a habit to listen to honest founder stories, such as on NPR’s How I Built This, and it will make you view how most businesses are built in a whole new light!
  3. As Chris Kong from Better Nature Tempeh said: the goal of any entrepreneur should be to try and kill their idea as soon as possible. Why spend three or five years of your life on something that is destined to be a dead-end?  Prove a concept before you put your time, energy and money into it.
  4. Embrace the idea of an MVP or a minimum viable product. Take a prototype of your product to a market and see if you can sell it there first before you build a website for it.  Do a pop-up shop to see what kind of customers you attract before signing a lease on a store. See if you can get people to a free online seminar for a topic before you sink a couple of months into creating that online course.
  5. Doing this means you also have to keep an open mind about what your business might become.  Many of the successful businesses I know started off doing something else and changed when they learnt something new or discovered a new opportunity.
  6. Each time something doesn’t work out the way you thought it would, that’s a really important learning, so embrace it.  Be glad that you found that out quickly and cheaply instead of dragging it out over several years and investing thousands of pounds into something that wasn’t going to work!  But make sure you do actually learn, make sure you’ve got a way of getting feedback or measuring metrics instead of just trying things at random.
 
And that is it.  So if you’re in this position where you’re getting everything ready, where you’re trying to make it all perfect before you launch, that’s just a delaying tactic.  Don’t wait until it’s perfect, because at the moment you’re probably just making it perfect for yourself, not your customer.  Skip a few steps, get it out now and take what you learn to make it better.
 
So thank you for joining us on this one, and just a reminder to make sure you check out the website at veganbusinesstribe.com if you want to get involved with our amazing community of other vegan businesses who want to help you succeed.  And if you want to talk to myself and Lisa about your vegan business then at the moment we’re still doing a welcome one to one with every new member who joins us on our £12.99 a month tier – we’ve had a lot of new members since the new year and we’re not sure if it’s going to be sustainable in the long term to keep doing welcome 1-2-1s, but for now, if you sign-up this month at least then you’ll get a link to our diary to book in a free session with myself and Lisa!  but that also means you’ll also get full access to our online events, our member networking which is now three times a month covering different time zones, and everything else that you can go read about on the website.
 
So thank you for your time, Lisa and I always really appreciate you giving up your time to listen every week, and I will see you on the next one!

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