The Losing Idea that Started My Biggest Business

November 28th, 2011 — 6:30am

In 2005 I had a freelance software development business, and one employee. The software business was doing very well. I was grateful, and I was having a good time being full-time self-employed for the first time in my adult life.

But I was afraid. The software business had become increasingly specialized, to the point that all my customers were users of the same software package that I didn’t make or sell, but I provided services and add-ons for. I was afraid that someday that software package would go away all at once — be bought out, shut down, or replaced. I thought about how bad I’d feel if I had to tell my one employee he was out of work because something like that had happened.

So I was looking for a second business to start, as a backup plan.

It happened that this employee (Phil Gioja) and I had a common interest. He had majored in film production in college, and I had majored in video broadcasting. (Full disclosure: He graduated, I dropped out.) We got the idea in our heads to put a studio in our unused office space.

I really wanted to do it. It sounded so fun. I felt guilty about it. It wasn’t practical. In one conversation about it, I said to Phil “We’ll probably never make any money on this.” Boy am I glad we started that studio against our better judgement.

I was right, the studio was a lot of fun, and it never made any money. But in the process of building that studio I designed the acoustic panels that became the spark of that second business I was looking for. The acoustic panel business grew into a big success, and the software business ended just the way I’d feared, becoming obsolete about one year later.

If we hadn’t gone ahead with that passionately interesting, impractical, money-losing studio idea, we would have been in a really tough business situation, and more importantly would have missed out on a huge business opportunity.

Starbucks started in a similar way. The first store sold coffee beans and tea bags, not prepared drinks! The initial vision of the founders didn’t work very well, but it was the incremental step that opened the door to something that worked much better.

Start things. Try things. You’ll probably create a stepping-stone to something you never imagined.