Lessons from my first business failure - Lesson #2 – Do Your Homework
In 2003, at the age of 29, I left my high-tech job and bought a highly acclaimed restaurant with an old college friend. I learned four key lessons from that failure. Now, looking back at a tough time in my personal and professional life, I evolved in ways I never would have if I had taken the safe route.
If you lived in the Bay Area circa 2003, this is what it was like. The dot-com boom was now a bust. Instead of “champagne wishes and caviar dreams” most of us were just sweeping up from the parade. I had been laid off, like a lot of people, and discretionary spending was at an all-time low. Given this backdrop, why wouldn’t I buy one of the most expensive restaurants in one of the most expensive towns and enter one of the most cut-throat industries in the world?
I was blinded by an old belief system that successful people own businesses. What I really needed to know is that successful people own good businesses, and they are excellent at running them.
This leads me to lesson #2, do your homework.
My restaurant was in a small mountain-side town. It was a beautiful place, with multi-million-dollar homes and some of the wealthiest people in the Bay Area. Even after the dot-com bust, there was still plenty of wealth there. Seems like the perfect place for a high-end French cuisine joint, right? Wrong.
What I didn’t know is that these towns folks didn’t like a lot of people crawling through their downtown. There was no parking. The city council didn’t know how to attract people to the town. The road was not heavily trafficked. People didn’t come into town on a whim, they made reservations. This required that we make ourselves a destination. This does not happen overnight. And even though the former owner had achieved this, that reputation went with him.
In hindsight, I would have spent every day for a week seeing who and how many people walked through town. I would have talked to local business owners about the business climate. I would have probed the current owners about why they were selling. If nothing else, it would have either deterred me or prepared me for what was to come.