Ep231: Neil Patel – Fail Your Way to Success by Practicing the 3Es: Experiment, Experiment, Experiment
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Guest profile
Neil Patel is a New York Times Bestselling author. The Wall Street Journal calls him a top influencer on the web, Forbes says he is one of the top 10 marketers, and Entrepreneur Magazine says he created one of the 100 most brilliant companies. He was recognized as a top 100 entrepreneur under the age of 30 by President Obama and a top 100 entrepreneur under the age of 35 by the United Nations.
“Have the mindset of testing. What works today may not work a year from now. If you don’t keep testing, you’re not going to thrive and succeed.”
Neil Patel
Worst investment ever
Creating a business to solve his own problem
About 10 years ago, Neil’s website, at the time, was doing pretty well, so much so that sometimes he’d get a flood of traffic from social media. This upsurge in traffic would cause his servers to go down. This sounds like a good problem to have, right?
While Neil appreciated the tremendous traffic, he had to pay for more and more servers. But then, in most cases, he would never use the extra resources. He thought to himself that it would be a good idea to be able to pay for the resources when he needed them, and not pay for them when he didn’t.
Taking matters into his own hands
Neil figured that there must be other people who were in a similar situation paying for all these resources and not using most of them. “What if we combine all our servers and have one big infrastructure, and we can each scale up and down as we want?” he thought to himself. Right there and then, a business idea hatched. Neil went to work to start Vision Web Hosting.
The multibillion idea that sucked
While Neil’s idea was a good one and would have seen him make millions of dollars, a few things turned it into his worst investment ever.
First, Neil had no experience in hosting. Second, he picked partners that had no experience either and just paid them because they told him they could do it. Third, hosting was just not Neil’s core focus. He was doing many other things that had him distracted, and so he wasn’t focusing on it.
Essentially, Neil ended up spending over a million dollars to start a business that wasn’t generating any revenue. He didn’t even get to launch it. His partners couldn’t figure out how to execute his idea.
Eventually, Neil folded the business and had to figure out how to repay all the money that he borrowed to start the business.
Lessons learned
Ideas are worthless if not executed right
Ideas are a dime a dozen. They are worthless unless you pick and execute the right ones.
Partner with experienced people
Pick business partners who have done it before because they come with learnings instead of starting from scratch and having to learn on the job.
Start a business with a minimum viable product
If you’re going to start a business, start with a minimum viable product and get it out there. You are never going to have a perfect product. It’s never going to be amazing. Just get something out there and improve it over time.
Andrew’s takeaways
Sometimes you’re just not ready to join the big leagues
You may have a great idea that you want to launch in the global market, but before you go competing in the big leagues, ask yourself if you’re ready to do it. Do you have confidence in your operations? Do you have the money to do it? Do you have the right workforce? If not, accept, pull the plug and wait until you’re ready.
Four main things to look for when investing in a startup
1. Trust
Do you trust the team that you’re investing in? Usually, there’s no hack to trust. Trust comes over time.
2. The idea
What’s the startup’s idea, and is it a viable one?
3. Execution
Is the team able to execute on this idea? If the answer is no, it doesn’t matter that the idea is excellent, it doesn’t matter that you trust the team, the idea won’t work.
4. Money
Ultimately, you never want to be the only one providing money to any startup that you’re involved in. The startup should have other sources of investment funds.
Learn the 18 Questions for Pre-Revenue Valuation of a Startup.
Actionable advice
Experiment, experiment, experiment. Don’t wait. Don’t say, “Oh, I got to learn more. I’m gonna do it next week.” Just go experiment, do it as quickly as possible, and learn from your mistakes. Learning from your mistakes is a vital part because you don’t have to be the smartest person to succeed if you make a lot of mistakes, but you avoid making the same ones over and over again. Eventually, the right ones will be the only ones that are left.
No. 1 goal for the next 12 months
Neil’s number one goal for the next 12 months is to double up on his traffic. He’s looking to gain another 10 million visitors a month.
Parting words
“It’s very, very important to think about every mistake that you’ve made in business and what you’re trying to achieve in life, write it down, and avoid making that same mistake over and over.”
Neil Patel
Connect with Neil Patel
Andrew’s books
- How to Start Building Your Wealth Investing in the Stock Market
- My Worst Investment Ever
- 9 Valuation Mistakes and How to Avoid Them
- Transform Your Business with Dr.Deming’s 14 Points
Andrew’s online programs
- Valuation Master Class
- How to Start Building Your Wealth Investing in the Stock Market
- Finance Made Ridiculously Simple
- Become a Great Presenter and Increase Your Influence
- Transform Your Business with Dr. Deming’s 14 Points
Connect with Andrew Stotz:
About the show & host, Andrew Stotz
Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.
Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.