4 successful founders explain how they overcame rejection – Business Insider
By Staff 5 years ago4 successful founders explain how they overcame rejection Business Insider
From getting rejected from 37 VCs to being turned down by the bank — twice — these four founders overcame the odds to become wildly successful.
Deja Leonard
3h
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- Rejection is inevitable when launching a business, and knowing how to bounce back better than ever is key.
- Business Insider spoke with four founders who have launched media companies, breweries, and digital marketing and fitness software services to learn how to overcome the toughest of obstacles.
- These founders have been rejected countless times by VCs, investors, and banks, and have struggled to get their initial ideas off the ground. Today, they’re all running thriving businesses.
- They emphasized doing your research, learning when to pivot, finding the right team, and — ultimately — reminding yourself that your idea will work as important steps to take when faced with failure.
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Getting rejected, whether in our personal lives or in business, isn’t fun. And if you’re an entrepreneur looking to attract investors, generate revenue, and scale your company, you know that the stakes are even higher — and rejection all the more terrifying.
Building a booming business is every entrepreneur’s dream, yet only one in 12 people actually makes it happen, according to a report conducted by Startup Genome. And while we hate to believe it, rejection along the way is practically inevitable.
Business Insider spoke with four inspiring founders about their stories of (countless) rejection and how they bounced back to become even more successful.
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The founder who turned 37 rejections and an unexpected pivot into a thriving business
Todd Saunders and his cofounder Dan Pratt had been on the AdWords team at Google for two years when they came up with the idea for their company AdHawk, which aggregates companies’ digital marketing data and offers advertisers one-click optimization solutions, in 2015.
When they were first starting out, “we had no product, no engineers, and no revenue,” Saunders recalled. But they knew there was a product-market fit.
In the same year, the two entrepreneurs joined the Techstars accelerator program, and AdHawk was the earliest-stage company there. Because ad tech was both a competitive space and an industry many investors had been burned by in the past, Saunders and Pratt faced rejection time and time again.
And the rejections didn’t stop after they completed the accelerator program — the duo was rejected by 37 more VCs.
“It was a pretty tough pill to swallow, but for us, we believed in what we were doing. We had talked to enough customers that we understood the problem, and we solved customers’ pain points,” Saunders said.
So they kept at it, and eventually they had their first commitment from an investor for $100,000 — until a week later when he dropped out because he wasn’t confident in the investment. Not only was this a blow to the company, but it meant the founders had to face the other people who had signed on as a result of this initial investor.
“It’s terrifying. It’s something that is humbling and a little bit humiliating,” Saunders said about the experience. But the duo knew what they had to do.
“When we found out the investor backed out, we went to our lead investor and were very honest about it. We had no other choice and it was honestly the best decision we made. Our lead investor ended up putting in more money to cover the rest of the round and was more than excited to do so,” Saunders said.
At this point, they had heard from multiple investors that they needed to focus on one industry because they didn’t think the business would survive in the competitive market if it focused on small businesses in general.
Their first customer, FloorForce, helped them do just that.
“Through working with them we saw a huge opportunity to offer a fully vertical SaaS solution to an underserved niche,” Saunders said.
After working with FloorForce as a customer, AdHawk acquired the business in early 2019 — something the two entrepreneurs had never predicted.
Once AdHawk had a niche (the flooring industry), things took off. Those 37 investors who rejected them were now looking to get in on their latest round of funding, which totaled $13 million. The company has now raised a total of $17.7 million in funding, generates $23 million in recurring revenue each year, and employs over 100 people.
“Don’t go out looking for a niche. Keep your head down and focus on building a great product and testing it with many different types of customers. Let the market and customers tell you they want it,” Saunders advised other founders.
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The founder who defied industry norms, got rejected from the bank twice, and bootstrapped his business to success
When Garrett Marrero (25 at the time) told his friends he wanted to move to Hawaii and start a brewery, they thought he was crazy. When he approached the bank with his idea, he was turned away for financing right out of the gate.
But Marrero believed in his idea, and bootstrapped the company with the help of his cofounder and now wife, Melanie Oxley, and their families.
The couple was able to round up about $500,000 to kick start Maui Brewing Co., but it wasn’t easy. Marrero’s mother contributed money from her retirement fund and his grandmother helped, too. Oxley had to refinance her house in Sacramento and use money from her 401(k), while her parents mortgaged their home.
The brewery was one of the first to can craft beer — an idea that didn’t sit well with many beer lovers. So, the couple spent a lot of their time early on in the business educating customers about their product.
They would hand out samples of their beer and explain to customers that by canning the beer, they were protecting it from light, ensuring it had a low oxygen content and ultimately keeping the beer fresher for longer. Plus, it was better for the environment. People eventually bought into the idea.
Four years after the initial rejection, Marrero went back to the bank and got rejected again. At the time, banks were coming out of the real estate bubble and were very risk averse.
“It was a really defining moment for me,” he said.
He realized that the banks were the only people who were making him feel bad about his business (now that customers were on board), and he knew he had to do something differently to get them on his side. So Marrero chose to go looking for a different bank that would support him. Soon, one replied to Marrero welcoming him to go through their typical application process — but he didn’t want to be just another candidate in the pile.
He told the bank: “You need to come to me because I need to show you what we’re doing. I need you to see who we are, what we do, and what we’ve built.”
The chief credit officer flew over and Marrero shared his vision and exactly how they were going to get there. His uncommon approach worked: After the meeting, he was approved for a loan of approximately $2 million for equipment and working capital.
By stepping outside of the norm, Marrero was able to fuel growth for the company and help get it to where it is now.
“Be clear and concise on the papers, but grab [investors] and bring them to your space. Show them who you are, share your passion, and always keep financing options open,” he said about pitching your business and finding the right bank to partner with. Today, Maui Brewing Co. is recognized worldwide for quality and innovation and employs over 800 people.
“You have to be laser-focused on where you want to go, but how you get there is absolutely going to change.” he added.
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The founder who saw potential when investors didn’t and waited patiently for the tides to turn
Jon Werner started working on Bones in Motion — an app that pioneered using GPS in mobile phones to deliver real-time fitness experiences — in 2003. At a time before all cell phones were sold with built-in GPS systems, this idea was extremely innovative, but it also left many VCs wary.
When Werner approached investors, he kept hearing the same thing: “We love the idea, but nobody is going to run with a phone.”
That isn’t exactly something you want to hear when you’ve drained your 401(k) and sold your home to support your dreams, but Werner dug deeper. He knew in-phone GPS was on the way.
“We stuck to our guns, we talked to our customers, we did our research, and we kept going,” he said.
Werner and his wife (a runner in the family who helped spot the need for the app) continued to meet with runners to understand how they were tracking the distance and pace of their runs, if they listened to music while running, what carrier they used, and how much they would pay for an app that could record their speed, distance, and calorie burn. They would also go to popular running trails and collect data on how many people were running with devices to further validate their idea.
While VCs weren’t sold on the idea yet, customers were. The app continued to gain traction and was attracting customers in Europe, Asia, and Japan. Werner had created partnerships with many carriers, and had to work directly with them to get the app onto their customers’ phones since there was no such thing as an app store yet.
While Werner was hard at work, the tides began to change. In 2008, shortly after the birth of smartphones, he started receiving more interest in Bones in Motion from investors.
“Adidas was the third company that we had mergers and acquisitions discussions with. At this point of our funding, [with] the crash of September 2008 and the advent of the iPhone opening up to developers, we were in a very accommodating posture,” Werner said.
In 2009, the app was acquired by adidas and became the foundation for the adidas miCoach app, which provides expert tips, personal training plans, and performance tracking to customers. Werner joined the adidas team for over nine years, and is now focusing on his newest venture, KOYA Innovations.
“We were totally committed to the fact that we believed this was something that was going to take off — and thankfully it did,” he reflected. “VCs — while they’re smart and they’ve got money — they don’t always know everything.”
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The founder whose first startup tanked before he found the right team and the right strategy
Do you ever have an idea you just know will stick? Brian Weiss created his first startup, TickHive, with that exact mentality.
The app, when he launched the idea in 2015, was supposed to be the world’s largest sports and music ticket archive with features that engaged and excited fans to compete and win prizes. The team was confident in the idea, but when they approached multiple investors they came out of meetings empty handed. They kept hearing that the team they had was not strong enough to bring the business to the next level.
“Investors want to invest in a company where that company comes first to all founders,” Weiss said. His business partners all had other full-time jobs and TickHive was a side project for them. This brought to light something Weiss had intuitively known for a while — he didn’t have the right team, and he couldn’t keep trying to connect with investors while shouldering most of the work. Weiss decided to put TickHive on hold and went back to working as a consultant.
But the failure to get his project off the ground the first time didn’t hold him back. With the introduction of legal cannabis, he had another idea and knew exactly how he wanted to run his business this time around.
“The failure of my previous startup has allowed me to surround myself with the right people — a good cofounder and a good team,” Weiss said.
He started off the venture as the sole founder, and took his time bringing on the right cofounder. He also began to create relationships with freelancers and content creators who could support his business while not being hired on full time.
In his last venture, he had spent too much time trying to figure out how to get things just right, instead of taking action. This time, he immediately built a website to get L.A. Cannabis News off the ground. By early 2018, he was accepted into the CanopyBoulder cannabis accelerator, and that is when he brought on his cofounder, Talia Rubin, who was just as committed to the success of the business as he was.
The website, which features news, policies, and content around cannabis culture, now garners over 30,000 visits per month, has nearly 70,000 newsletter subscribers, and just recently started to bring in revenue through advertising, paid content, and jobs boards.
“Most founders think they can do everything themselves, but they can’t. I realized that with building a company and having the right tools, I was able to start to hire the right people I needed to not only execute my idea but then be able to scale that idea to the next phase. Founders should be able to delegate — it’s okay to ask for help,” he explained.
Deja Leonard is a freelance writer and founder of The Good Report. She writes about business, technology, and women’s issues. You can find more of her work at www.dejaleonard.com or say hello on Twitter @dejaleonard3.
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