BIO: Paulina Tenner is an entrepreneur, angel investor, TEDx speaker, and author. Her company, GrantTree, specializes in research and development tax credits and grants. She is passionate about burlesque and used to perform as a showgirl!
STORY: Paulina’s company ventured into a new business area of renting out office space, a venture that almost killed the company.
LEARNING: Focus on your core business. Check-in whenever you delegate a project and ensure you put controls in place. Do not fall prey to overconfidence bias.
“Focus on what you are good at instead of trying to break into new territories.”
Worst investment ever
About five years ago, Paulina’s company reached a point where the team was too big for their current office, so they needed a new one. They had the option to get an office that was a perfect fit for them, slightly bigger than the current one, so that they could grow into it. But there was also this genius idea of taking over an entire building, renovate it, and sublet to other companies with a similar culture to theirs.
Taking a vote
Paulina’s instinct told her to go with the smaller option instead of an entire building. But when the two options were put into a vote, there were two or three votes more for the building. So they decided to go with the idea of an entire building.
One colleague in Paulina’s company had big ambitions and a clear vision of what he wanted that building to be. So he found one. The company took over the building and paid a hefty deposit of about £300,000 or so. Then they started renovating it.
The costly mistake of delegation
Paulina and her co-founder decided to put the colleague with the big vision in charge of the entire project. They were not paying too much attention to the management of the project and thought because this particular colleague was in charge, everything would be fine.
So much money was spent on renovating the building. By the time Paulina and her co-founder put a hard stop to it, the company had spent over £600,000 on renovating that building. It was over the top and way more than they needed.
The desperate struggle to make a return on investment
After they were done with the renovations, they started advertising the building and looking for companies to take up the office spaces. That is when they realized that they knew nothing about the office rental space, it was not their specialty. Their specialty is finding government funding schemes to fit in with what their clients do.
It took many months, more than they anticipated, to find companies to use the space. At some point, they got truly desperate to get people into the building and share their ongoing costs with them, so they decided to rent it out at cost. So no profit whatsoever.
And as if that was not enough, when the company decided it was time to wrap up this crazy idea and get out of the building, they were charged enormous amounts of money for dilapidation. The landlord wanted the building in its previous state, even though they had made it better with all the renovations.
Paulina’s company lost so much money on the entire operation, it almost died.
Focus on your core business
First, focus on what you are good at because it is tough to diversify and break into an entirely new industry before you get good at what you are doing. If you are a relatively small startup company, do not take on projects that cost a lot of money upfront.
Mistakes are part of learning; embrace them
Every founder will, at some point, make a costly mistake. It’s part of the learning process.
Do not wholly delegate a new project
If there is a big project that is important for you, do not delegate it to just one person. Make sure you put controls in place on how much money is to be spent and how the whole thing is to be managed. As a founder, you need to get involved in that project or at least have oversight of it if it is significant for your company.
Limit yourself to your core business
Understand what your core business is and focus your energy there instead of trying to venture into an area you are not good at.
Be careful of overconfidence bias
Do not fall prey to overconfidence bias where you think you can do anything and everything because you will end up losing it all.
Do not make the wrong mistake
The most important thing when starting a business is not to make the wrong mistake. But the hard part is that you don’t know what’s the wrong mistake. Unfortunately, the wrong mistake is the one that knocks you out of business.
Put controls in place and monitor your investment, particularly when investing in a new project.
No. 1 goal for the next 12 months
Paulina’s number one goal for the next 12 months is to see her upcoming book, Laid bare: what the business leader learnt from the stripper become a success. The book will be out in July 2021.
The book talks about the innovative company culture Paulina implemented in her business (such as financial transparency and self-set pay) and wholesome leadership, all inspired by her showgirl adventures. Join her book’s waiting list and receive a surprise—and naughty—digital gift!
“If you’re thinking about renting a building, think twice. But if you’re thinking about starting a burlesque course, don’t think twice. Just do it.”
Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning. In our community we know that to win an investing you must take risk but to win big you've got to reduce it. This episode is sponsored by a stocks Academy's valuation masterclass. They call it the boot camp for valuation because it takes almost 150 hours to complete. And students have to value about 15 companies to graduate. It really is the complete proven step by step guide course to guide you from novice to valuation expert go to my worst investment ever.com slash deals before March 31 2021. to claim your 30% podcast listener discount. Fellow risk takers This is your worst podcast host Andrew Stotz, and I'm here with featured guests. Polina tener. Polina Are you ready to rock?
Paulina Tenner 00:50
I am totally ready, Andrew. And I'm so thank you.
Andrew Stotz 00:56
Yeah, well, I'm really happy to have you on. And as I said to you before, the before we came on, you're gonna win some little awards here, but I won't get to that yet. But let me introduce you to the audience. Polina is an entrepreneur and angel investor, a TEDx speaker and author, the company she started in 2010. Grant tree specializes in research and development, tax credits and grants. Interestingly, her business operates as a holacracy, full financial transparency and self set pay. She is passionate about burlesque, and she used to perform as a showgirl. Ladies and gentlemen, before I introduce you to Polina, I want to tell you that you win the prize is having two words in your bio, that I needed to go and look up to make sure that I really understood what they meant. And the first one is holacracy. And so if I didn't enjoy it, let me read out what I found on the internet, to the listeners. holacracy is a method of decentralized management and organizational governance, which claims to distribute authority and decision making to a whole whole hierarchy. A whole larkey of self organizing teams rather than being vested in a management hierarchy. That's the first word but the prize comes because she had two words that I just did not, wasn't confident, I truly understood it. And the other one is burlesque. And I have now learned that a burlesque is a literary, dramatic or musical work intended to cause a laughter by caricaturing the manner or spirit of serious works or by ludicrous treatment of their subjects. Let me take a minute and fill out further tidbits about your life.
Paulina Tenner 02:38
Oh, Andre. So it all started with me winning a scholarship to study in the UK. I was born in Poland. And I came over and I was super fascinated by. So when I started studying at University College London, I also started networking with startups. And I was like, these guys are proper, crazy. They think they can pick on the entire industry. They have this chutzpah and this belief that they can change the world. I want to be one of them.
Andrew Stotz 03:14
I didn't go with the crazy ones.
Paulina Tenner 03:16
I want to go the crazy ones. Yeah. And I was attending those meetups with bearded guys eating pizza and drinking beer and pieces of pizza were in the beards. And I was like, Oh, my God, my world, I want to be one of them. I don't want to have a beard. But I want to have a startup, I want to have a company that's mine. So I started my first one with a guy who was 30 years, my senior. And in that company was supporting entrepreneurs, we were matching them with investors with office space with grants. And that's when I realized, okay, this whole grants thing. There is a there is an opportunity there are a lot of people think they qualify for government grants, they don't know how to get about it. And they don't have time to fill in the forms, they find it over frustrating activity, why not get in there? So my second company is especially dedicated to research and development funding from the government. We do it? Well, we've raised over 200 million worth of equity free funding from the government for our clients. So it's all going really well. And here I am now.
Andrew Stotz 04:22
And what what type of is it companies that you helped to apply for these? Is it scholars? Is it academics? Who is it that
Paulina Tenner 04:30
you really have always companies so tech, mostly tech startups, scale ups and bigger companies?
Andrew Stotz 04:36
And if we just look at that for a moment and ask the question, like what type of companies could come to you that you you know, you could provide your service for if there's a listener here struggling with a problem?
Paulina Tenner 04:47
Andrew Stotz 04:49
What type of problem can you solve? Is it only about let's say, I don't know us, so UK government or is it just grants in general or certain types or So it's
Paulina Tenner 05:00
always always grants for research and development. So if you're listening and you are starting a tech startup, or you are in a slightly bigger company that invests some of its money into delivering technology related solutions, it couldn't be just in order to operate better. So you don't have to be selling technology. But maybe you are developing technologies that just for internal purposes, there's a good chance we can find a grant for you, or even a tax break that will allow you to reinvest some of the money into further tech developments.
Andrew Stotz 05:37
That's exciting. I mean, a lot of times people are kind of working on their own, and they're crunching it out and they miss the opportunity. Not only do they not have time to find it, or fill out all the forms and do all the things, but many of them may not even know that that's even available. Exactly. Yeah. So well, that's great. And so we will have all of your contact information on the show notes. So if listeners you are thinking, Hmm, I wonder if I could, you know, apply in some way, then you can reach out to Polina and see if there's something you could do. Also, I think what's critical is, you know, whenever I think of r&d research and development, I think of research, but you just said that it's not just research, it's also development, like developing, making yourself more efficient, or, you know, the way that you're doing what you're doing, and if that has some benefit that governments want to support? Well, you may be, you know, able to get it.
Paulina Tenner 06:29
Yeah, you will maybe up for a treat. So exciting. Yeah. Technology getting in touch. I'm very happy to speak to people. Fantastic.
Andrew Stotz 06:37
Now, we can't we can't go on yet to the question until we go through a little bit about the holacracy. And burlesque.
Andrew Stotz 06:49
Tell us about this. I mean, this is very odd, I'd never heard of it before, I had to look it up for financial transparency and self set pay.
Paulina Tenner 06:59
Yes, so that means that in my company, people set their own salaries. So they are fully responsible for reviewing their salaries on an ongoing basis and making sure that they're fair, and they correspond to the fair rates on the market. So it's a hell of a hell of a lot of responsibility, but it really empowers people. And I find that if you give them that responsibility, and that freedom, they take much more ownership of their work, and they really bring their full selves to come to the office.
Andrew Stotz 07:31
So my question is, you know, I mean, because I've looked at it, we have a company in Thailand, one of my businesses is a factory. And we've talked about the idea of transparency in compensation, and using it as a way, you know, that every time we do it, and we haven't done it self set, right? We haven't thought about that. But now, now, you got me thinking about that. But every time we do it, we think of all the possible negative consequences that could come from this. And, you know, sometimes, you know, new ideas or different ideas, we just can't think about them. So just tell me, what is it that that? You know, that would be good? Is it is it applicable for every type of company? Or is it really only applicable for a small company? Or what would you say about that for other companies.
Paulina Tenner 08:16
So we got inspired first to do it by a guy called Ricardo Semler. He is a Brazilian, entrepreneur, multimillion a billion entrepreneur at this point, he wrote this book, Maverick. And he talks about how in the 1980s, in Brazil, and in the manufacturing industry, in a company that had many 1000s of employees, he introduced full financial transparency and self set pay. So the way he managed it, he divided the company in lots of smaller teams, and that will set that was self managing. And on those teams, there was full transparency. And we just thought, wow, if that's possible, in the manufacturing space in Brazil in 1980s, then we can probably do it in a small startup in the UK. So it's definitely applicable to all types of companies, but you need to be ready for it culturally speaking. So there needs to be strong values in the company, there needs to be trust, there needs to be just the sense of personal responsibility that people have. And if there's an enough cultural maturity in the company, then it might be right time to start thinking about putting transparent financials, it's got many benefits, because if you have transparent financials, then the pay gap, you know, erases the pay gap out of existence because everything self corrects. So I do think that it's possibly the future of work and where are we going towards more financial transparency?
Andrew Stotz 09:54
And what's the risk I'm sure listeners that are thinking, I wonder if I could do this that you just get this feeling like oh, Will selfishly bid up their PE against each other, when they see another person, well, I do more than them, I should be making more that type of thing. But what is it that prevents them?
Paulina Tenner 10:10
So, people, it's not as simple as it sounds that you from, you know, one day to the next you make a decision, you're going to up your pay, you need to be redoing your self assessment reviews monthly for at least six months in my company, you need to buddy up with someone who will give you feedback on your self assessment. And then you need to be in touch with the budget holder from your kind of team or departments to make sure that there is budget in the company for you to to up your pay. And there's a lot of kind of mechanisms put in place to make sure that people really take this decision seriously and really think about it and take into consideration that the past and present performance to it's interesting, and it makes it makes me think of two things at one time, I
Andrew Stotz 11:04
gave a seminar on something. And I decided I just say I'm going to this seminar will be pay as much as you got. And I made a little like a Kleenex box with a hole on top. And I made it and I tied it up so that nobody would see what was in or what anybody contributed. And I said, Yeah, the way you pay for this is you put in what you think you got from this event. Yeah, at the end of a full day with a full group of people I walked out with probably pretty much the same as I would have gotten if I had charged, you know, I, so I was, you know, felt like, Okay, put pressure on me to make sure I'm delivering value. But it also, you know, nobody wants to sit in there and think that they're getting this, you know, for free when they know all the time that you know I put into it. So it wasn't as scary once I did it. And I think it's it reminded me of that. The second thing I think about is that you know, living in Thailand, and you know, spending time across Asia. Corruption is a big thing. I mean, it is everywhere. And but here, sometimes it's built into the culture, if you even go back in history of some of these countries that were tax farmers that were basically allowed to get money from the farm farmers and from land. And then they just had to pay the royalty basically, back to the king. And then once you set up like that, then you are really naturally skimming money from the tax from the farmers that are growing the crops. So it's like men that culture carried on. And now it's not that strange in a lot of Asian cultures. And I've also often thought, you know, the way to deal with corruption in Asia, this is gonna sound really weird, but make it legal. We just require that when there's a contract that goes out, that the companies that are bidding for that contract, have to announce the whole amount of money that they paid. You know, and I know it just sounds weird. And then people would say, Well, you can't how are you going to implement that? But the point is, is that I don't think that there's a huge, I mean, although in the West, we say corruption is terrible. Corruption is terrible. But I think that there's a part of it, that's seen as just a cost. So if we just bring that cost out in the open, then you know, it's just a different idea. And you have sparked me to think different. So
Paulina Tenner 13:26
I love it. I love it. It's It's interesting, like legalizing drugs out or legalizing prostitution. I think only things cannot come out of it.
Andrew Stotz 13:37
You know, when I recently a friend of mine that I grew up with, when I grew up in Ohio, came to see me in Thailand, we haven't seen each other for a long time. But we were very close friends when we were young, young, 16 mile mountain off about everything we thought we should, you know, what, what how the world should be. And then one day, I was talking with him here in Thailand, after 30 years of not really hanging out. And I was talking to him about how how terrible the drug laws are here in Thailand and in Asia, where they just lock people up for life practically, you know, and just crazy the criminalization and, and I just so against it. And he just said, What the heck are you talking about? When we were young? You were like, We got to get tough on drugs, we got to get tough on this. Gotta have a war on drugs, you know, and I just thought that I thought the harder you squeeze on something, the more chance you're going to solve it. But in fact, what I've learned is oftentimes the harder you squeeze, just the more awful it becomes. Mm hmm. And so yeah, so anyways, I think I'm really happy that we can talk about that. Because it also just I think it brings some interesting things to think about for the audience. And I teach a course called transform your business with Dr. demings, 14 points. And Dr. Deming talked about throwing out performance appraisals, at least the way that they're done and merit ratings, and the rankings of people and then attaching compensation to those rankings where you're creating this internal competition that really is destroying the joy of work. I agree. And, and so I've just had a seminar that I taught for two days with the management team to help them see that, you know, part of the obligation of management is to try to bring back the joy of work. And sometimes performance appraisals in companies are just misery.
Paulina Tenner 15:18
Oh, yes, absolutely. Absolutely. And when it comes to the joy and joy of work, you've asked me about burlesque.
Andrew Stotz 15:27
Let's go tell me.
Paulina Tenner 15:29
Hello, let's go there. Yeah, because I actually have a book coming out, which is called laid bare what the business leader learned from the stripper. Because in burlesque, you often take your clothes off for some kind of funny reason. So there would be a story line that you're following, you're dancing along. And maybe it's a little bit like a circus act a little bit like a stand up comedy act. And then at some point, you probably take your clothes off, and you kind of end up in your knickers and the little nipple pasty or something like that. And the reason I got involved in it was that maybe two or three years into running my business, I was so tired, and I was so caught up in my head, and I just thought, I need to do something. Ridiculous, I need to do something to really get me out of that headspace and to really unleash all of my creativity and all of my, you know, the best part of me really the juicy risks, kay unapologetic part of me. And when I fought that there was one day when I was going to be in London, Piccadilly Circus, and I was walking past this club that I think still exists, that's called cafe de pury. And where they put on burlesque shows, and I was like, I'm gonna find out how to become a burlesque show girl. And I sent a few emails to a few of my girlfriends. And one of them responded and said, you should totally do a course with this school called the cheek of it. It's amazing. And I went, and I've done a course then I've done another calls, and I started performing. And it was one of the most fun things in my life. And the book is based on what my business persona has learned from my burlesque persona, and vice versa. So how, you know what they learned about leadership while performing on stage and showing my naked ass to a big audience?
Yeah, yeah, exactly.
Andrew Stotz 17:32
For those who are listening, I just turned around and slap mine. Well, it wasn't naked eyes, but you know, well, hats off to you.
Paulina Tenner 17:39
You're close to us. Yeah,
Andrew Stotz 17:40
exactly. Hats off to you. I mean, that's, and I think for the listeners out there, also, I would say, what challenge Are you going to take to break free of some of the monotony of life or, you know, have you found yourself getting into a rut, where you think that life is just, you know, work and tough and boring, and all this stuff, you know, break your limits, it may not be burlesque, it may just be going to the park and may be going to laughter yoga, it may be going to you know, anything, you know, but just take this as a little primer to, to push yourself out there. So, well, you know, that was a long intro, but I think it was well worth it. listeners, wouldn't you agree? They said yes.
Paulina Tenner 18:27
Yes. Okay. Perfect.
Andrew Stotz 18:29
All right. Yeah. And now it's time to share your worst investment ever since? Yeah, since no one ever goes into their worst investment thinking of will be Tell us a bit. Tell us a bit about the circumstances leading up to it, and then tell us your story.
Paulina Tenner 18:43
Oh, okay. Okay, so here comes. And it was maybe five years ago or so that my company now it's 50 plus employees, but back then we were maybe 15, or 20. And we were coming out of our first office, first proper office space, because we started out subletting a few desks in our clients office, and then moving into a co working space, larger, yada, yada. And then we had our first office. And we were starting to get too big for that first office. And that's what we felt. We had this genius idea, right? Why don't we take over an entire building? Wouldn't it be great to have an entire building and we can sublet parts of it to our companies and we can maybe renovate it and make it ours and bring in companies that are going to have similar culture to ours. And we're going to have this fantastic environment to grow and innovate and chat and we're going to have meetups and we're going to do stuff for the entrepreneurial community, etc, etc. So There was one colleague in my company that's no longer with us that had like big ambitions and really kind of crisp, clear vision of what he wanted that building to be. So he found one. And I remember that day, like it was yesterday when we were voting. So there were two possibilities, we're either going to go into an office, that was a perfect fit for us, and maybe slightly bigger, so we could grow into it. But it was just more or less what we needed at the time. And there was the option to which was the building, which was way bigger than we needed. But we could have, we were able, we would have been able to implement all of those ideas, had meetups have a space for entrepreneurs to come and mingle and whatever. And I remember that I just had a little hunch, and I voted for the plan A so the office space that just about paypass. In the end, though, we had two or three boats more for the building. So okay, so we decided to go for the building. And we took over the building, we paid a really hefty deposit, it was maybe 300 K or so. And then we started renovating it. And the colleague with the big vision was in charge. And the money simply started disappearing out of the company account because there was more and more changes that we needed to implement the building. And we had to have glass doors and division into smaller offices. So we could bring in smaller companies to work with us. And by the time we put up my co founder and I put a hard stop to it, we'd spend maybe 600 k on rent on renovation of that building. It was it was really, really over the top and way more than we needed. But truth be told, and my co founder and I just weren't really close enough to the whole operation. We weren't paying enough attention to how much money was going out. And we just thought, Okay, this colleague is in charge, everything will be fine. And then we started advertising it and looking for companies to join us and to fill that building with us. And that's when we realized that we know next to nothing about the office rental space, it's not our speciality. Our specialty is grants and funding people and then finding finding government funding schemes to fit in with what they do, but not having a office space to rent. Anyway, it took many, many, many months more than we anticipated, to actually find companies to use the space with us by the time. At some point, we're getting truly desperate to get some of someone into the building to actually share their ongoing costs with us. So we decided to rent it out at cost. So not no profit whatsoever. And we just lost so much money on the entire operation. It's unbelievable. And guess what this is not the end of the story because right now we are just about to come out of that building. And the landlord decided to charge us enormous amounts of money for so called dilapidation. So when you come out of the building, and they want it want you to return it to its previous state, even though we know better, we made it so much better, we made it so much better. So it's that the expenses have not yet ended for us associated with that bloody building. And just to think we could have opted for this neat small office space there that we you know, Plan A that we had when we were deciding where to move into we would have avoided so much costs so much stress. Actually, it brought us to a point where we are wondering, is this going to really kill the company? entire office space operation because it was costing us so much and there was so much risk? We wouldn't even find anybody to share the building with us. Yep. Oh, so there is
Andrew Stotz 24:30
Yeah. So why don't you try to sum summarize for us the lessons that you learned. Imagine that person standing in front of a building somewhere right now going, we're gonna let's make this whole building amazing and you know, they're standing there. You know, let's talk about the lessons that you learn.
Paulina Tenner 24:48
God. First of all, focus, focus on what you're good at. Don't think you can easily diversify and Breaking into an entirely new industry, before you've got an properly good at what you actually do. And, and particularly as a relatively small startup company, don't take on ridiculous projects that cost a lot of money upfront. And that may or may not be profitable in the future. If you're used to like we were used to being mean and lean, and essentially, not spending much money on on officers on or overheads stick to that. And then again, I think every founder will, at some point, have made a costly mistake. It's part of the learning process. So if there is someone somewhere out there standing in front of the building and thinking, I'm going to take over that building. Can I stop you? I don't know. Maybe you need to learn that lesson for yourself. But we have definitely learned it. And yeah, and no future massive office spaces for us?
Andrew Stotz 26:05
Oh, well, let me summarize a few things that I take away from your story. I mean, I've written down a lot of stuff. Yeah. And, you know, ultimately, your story is about kind of the idea of what business are we in? Yeah, and not not really realizing that by getting into that building in the way that you're talking about. You know, you really are becoming a landlord business. Yeah, building management building business
Andrew Stotz 26:34
And I have a story about that, where I represented a company here in Thailand. And I helped them to stay, they developed some very innovative software that was so impressive, that they hired me to help them sell it to Microsoft, and we pulled it off. We sold it to Microsoft, and Microsoft paid a very, you know, great price for it. And, and then Microsoft ran this software for three years until they decided we don't want to run it anymore. And we had a chance to buy it back from Microsoft, you know, that, you know, a very small price. So we went back myself, and one of the other guys involved in the deal, went back to the company that originally wrote the software. And then they said they didn't want to do it, because they realized, you know, software is not the core of their business. It's not our business. Yeah, software was just an incidental thing that we built to help our business operate. Yeah, at the core of our business, but but what I said to them is, but you got to understand that you've built your competitive advantage around this software, you now are one of the most efficient companies in this space in the world, because of this software. But yeah, we're not in the software business. So it's, in the end, they walked away from what I believe was a massive competitive advantage that nobody would have been able to catch them on. But they came with the idea, then it was new management, actually, that was running him. And that person said, you know, we're focusing on a core business, and that's not our core. So here is a case in that case, where I feel like they made a big mistake by not buying a software bank. But yet in your case, it's it's another one where it's like it's the same type of decision except it probably would have been better to just say, No, let's just get the the office space at the top of that building rather than get the whole building. Knocked lay. But so that that challenge, you know, of, you know, and I guess it also comes down to another thing I wrote down is kind of over estimation, bias and overconfidence bias, where you think you can do anything, and you think you can do everything. And that is often not the case. Now, the other thing that it made me think about is that when we started my business many years ago, my best friend Dale runs that business and I run my my finance business, but it's a coffee business, and we imported a big coffee roasting machine from America. 25 years ago, we installed it in a factory that we set out. In Thailand, we spent a lot of money on that building out the factory and on that equipment. And when it came time to actually get sales. We thought Oh, we got to buy green coffee. And we had already spent most of our money on the fixed asset that we bought into the business. And then we call the fixed. We've called the coffee broker, and we said we want to buy some coffee. And they're like, Great, great. And we said, well, how many tons? And we said, well, we were just thinking kilos right now, you know, maybe 100 kilos to fill this or he says Nope, sorry, I only I only sell tons. So we thought oh man, okay, we don't really have that much cash. But okay, we've got to do this. And then we said but can you give us like 60 day credit terms or something? Because you know, we're just starting out he says Nope, for new customers. I give zero credit terms. It's cash up front. And we ended up having to buy this ton of coffee. You put it in the factory, put it in the corner and Dale and I remember like a year later, we finally roasted the last of that coffee and we just thought it almost killed us because the work is Capital aspect of business, we oftentimes don't think we think about the investment in the big, you know, you know, the big equipment and all that, but it's that working capital, but from that, I always say, the most important thing in starting up a business is not to make the wrong mistake. But the hard part is that you don't know what's the wrong mistake. But the wrong mistake is the one that knocks you out of business. So obviously, this didn't knock you out of business, but it was just a very, very painful missing. And that's, that's the way go, you know, you just got to make those mistakes. So
Paulina Tenner 30:32
I also happy in the end, I'm dying to know, we sold
Andrew Stotz 30:35
all that coffee, and now we roast, you know, 20 tons a month, you know, and, you know, I type. So we, we definitely, you know, grew that business, and we managed to survive it, but we almost, it almost became our wrong mistake. But the point is, you're gonna make a ton of mistakes, just don't make the wrong one. So that's the kind of working capital aspect of it or just that, that that part of it that we oftentimes just don't think about. So those are some of the things that I took away from your story, anything you'd add to that.
Paulina Tenner 31:11
If there is a big project that's important for you don't delegate it to just one person with no controls in place of how much money is being spent, how the whole thing is managed, probably as a founder, you need to get involved in that project, if it's significant for your company, or at least have oversight of of it.
Andrew Stotz 31:29
You know, I, I knew you're gonna say that. Now, I'm going to counter that. But I'm so busy trying to run the business, how can I do it? All right, that's the way the typical entrepreneur feels is I'm so overloaded. Why can't I just delegate it to this guy. But I know what you're saying. And it's true. Right? If you don't do it, if you delegate it completely to someone, it's very likely that it could really mess up. And if it messes up, it could mean the end of your business.
Paulina Tenner 32:01
And it doesn't mean you know, being a control freak, it means maybe having controls in place. Okay, we're spending two 300 k on the building. And that's the absolute most and not like we spending and spending and seeing what happens and what else? What else do we need and how else to make it better? It's, and there is an ongoing line of credit for that, no, we simply set a budget, we have a plan, we following that plan. And we checking in, in between the different phases of the project to see how it's progressing. So it's also a story about trust, because trust broke down, broke broke down between me and my co founder and the colleague who was managing the process, we should have had regular catch ups, we should have had insight into what how the project is progressing. And we kind of delegated it all and didn't think about it.
Andrew Stotz 32:53
So you know, after all of these interviews I've done I've classified six common mistakes that people make. And these two mistakes you've just mentioned are Mistake number four, and number five, and that is they're not that common. The most common mistakes is that people say, Well, I didn't do my research, I just put my money into something and didn't think about it. But this the number four is misplaced trust, you've just stated that. And number five is failure to monitor the investment. Yeah. And so I think this is a great lesson on misplaced trust, and failed to monitor the investment. So Wow. Exciting. All right. So based upon what you learn from this story, and what you continue to learn what what action would you recommend our listeners take to avoid suffering the same fate?
Paulina Tenner 33:41
Well, as they say, all mistakes cost, all mistakes cost. The good ones cost the most. So the the really good good old lessons cost, the good lessons cost the most. So I would say the one lesson would be put controls in place.
Great, perfect when
Paulina Tenner 34:13
you're spending money, particularly when you spending money when you investing in a new project, put controls in place monitoring or investment.
Andrew Stotz 34:20
Yep, it's great advice. And there's nothing wrong with that, you know, just it's not like you said, You're not a control freak. You're just saying I need to make sure that we're stewarding this money as best that we can. So yeah, last question. What's your number one goal for the next 12 months?
Paulina Tenner 34:39
I would like to for my for my upcoming book to be gaming success. So in the show notes, we're going to hopefully if we can put in the link to my book waiting list. I would love to keep you listeners updated on how my book is coming along. It's going to launch this July and it's It's a lot of fun. So I hope you can enjoy it and you can learn some more lessons about my backups from the book.
Andrew Stotz 35:05
Absolutely. So we will have that in the show notes. So ladies and gentlemen, just come to the show notes. Click that link and get on the waiting list so that you can know as soon as it comes out. All right, listeners. There you have it another story of loss to keep you winning. Remember to go to my worst investment ever.com slash deals to claim your 30% podcast listener discount on the valuation masterclass. As we conclude, Polina, I want to thank you again, for coming on the show. And on behalf of a stats Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?
Paulina Tenner 35:45
Fabulous? Well, if you're thinking about renting a building, think think think twice. But if you're thinking about starting a burlesque course, don't think twice just bloody do it.
Andrew Stotz 35:59
Beautiful advice. And that's a wrap on another great story to help us create, grow, and most importantly, protect our well fellow risk takers. This is your worst podcast host Andrew Stotz saying. I'll see you on the upside.
Connect with Paulina Tenner
- 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