Host Nathan Gwilliam and expert guests help digital marketers transform into better digital monetizers with revolutionary marketing and monetization strategies, stories, and secrets.
https://monetizationnation.com
episode 1: 3 Secrets I Learned from Losing $11 Million in a Day
How much money have you lost in a day? In this episode, I’m going to tell you how I lost $11 million in one day, and some secrets that I learned that helped me become a digital monetizer.
How I Lost $11 Million in 1 Day
In the spring of 2000 I was a 25-year-old CEO of a publicly-traded SAAS (software as a service) company. My beautiful wife Crystal and I had been married for about 16 months, we had bought our first home, and she was pregnant with our first daughter.
In just 5 years between 1995 and 2000 the Nasdaq had skyrocketed more than 500% from under 1,000 to more than 5,000. The Nasdaq peaked at 5,048 on March 10, 2000, and by October 4, 2002, had plummeted by 76% to only 1,139. By the end of 2001, most dotcom stocks had gone bust.
The Collateral Damage
When the dotcom bubble burst my company had not yet reached profitability and was dependent on investors who were funding our software development and marketing. I painfully remember losing $11 million in a single day on the stock market, all from my ownership in my company. When the dotcom bubble burst, investors stopped almost all of their investments in Internet companies. After all of our investment dried up, our investors and I lost the company. I feel horrible for the investors who trusted me and lost their investments, the great team members who lost their jobs, and the hardships that resulted for their families.
The next year, as I focused on growing a horribly unprofitable Internet business, I only earned about $11,000 total for the entire year, or about 1% of what I had lost in a single day the previous year. My family survived in part because of the generosity of others, such as my sweet mother-in-law, Laree Ullery, who regularly brought us groceries and diapers for our new baby girl.
When our daughter was only a couple of weeks old, a key employee quit. This was understandable because of our tenuous financial situation, but we didn’t have the funds to hire a replacement. My wife Crystal stepped into that role and then another, and did an amazing job at everything she touched. She worked more than 2 years, bringing our daughter with her to work each day, without being paid anything, to help us get back up on our feet.
Our oldest daughter spent the first two years of her life coming into the office. As soon as she learned to walk she began going from office to office, pushing the “off” buttons on everyone’s tower computers. She was delighted at how quickly this got our attention. We finally got smart and started taping business cards over the buttons.
Heat Seeking Missile Aimed at Monetization
The first secret that I learned from this catastrophic experience was to be insanely focused on monetization. During the time leading up to the dotcom bubble I was doing a lot of “good” things that an entrepreneur should do, such as working with press releases and the media, raising money and managing relationships with investors, finding and operating an office space, dealing with HR issues, etc. These are all important things. However, our unprofitable business was like an airplane on a runway. We were trying to get the acceleration we needed to take off but the sudden dotcom bubble burst instantly shortened our runway. I had been so focused on “good” things, that I didn’t spend enough time focused on the most important thing: Monetization… getting us to profitability as fast as humanly possible.
This experience seared into my soul the lesson that as an entrepreneur my top priority is to be a heat-seeking missile aimed at monetization. When a business reaches sustainable profitability it is no longer dependent on investors and to a great degree becomes the master of its own destiny. When my business was not profitable I did not have the luxury of being distracted by anything other than the top priority of monetization. If I had it to do over again, I would have locked myself in a room with my developers and would not have come out until we had a software product that was completed, working great and that our customers loved.
This doesn’t mean that other things like HR issues are not important. However, the best thing that entrepreneurs can do to provide stability for their team members is to focus on monetization and get their business to sustainable profitability.
Read the rest of the blog post at https://www.monetizationnation.com/3-secrets-i-learned-from-losing-11-million-in-a-day/.