Throwback: Five Mistakes That Almost Cost Me My Business

In this Throwback episode, Josh, a seasoned entrepreneur, is interviewed by Chad Franzen of Rise 25. Josh shares five costly mistakes he made scaling his Amazon-based business, including over-diversifying sales channels, hiring without clear roles, delaying process documentation, underinvesting in talent, and launching unoriginal products. Their candid discussion offers actionable lessons for 6-7 figure business owners aiming for 8 figures: focus on your best channels, hire strategically, document processes early, invest in quality talent, and prioritize innovation. Listeners gain practical insights to avoid common pitfalls and accelerate their path to greater scale and profitability.

Chapters:

Introduction & Overview of 5 Mistakes (00:00:00)
Josh introduces the five major mistakes he made in his entrepreneurial journey.

Mistake 1: Over-Diversifying Sales Channels (00:01:09)
Josh discusses spreading efforts too thin by moving from Amazon to Shopify and Etsy, and the resulting lack of success.

Mistake 2: Hiring Without Clearly Defined Roles (00:04:01)
Josh explains hiring people without clear roles, leading to ineffective hires and wasted resources.

Mistake 3: Waiting Too Long to Document Processes (00:06:13)
Josh talks about delaying documentation of business processes, which hindered scalability and efficiency.

Mistake 4: Hiring at the Cheapest Rate Possible (00:08:05)
Josh describes the pitfalls of trying to hire the cheapest talent, and the benefits of investing in quality hires.

Mistake 5: Launching "Me-Too" Products (00:10:46)
Josh shares lessons from launching unoriginal products and the importance of unique, differentiated offerings.

Key Takeaways & Ideal Process (00:12:48)
Josh summarizes the main lessons learned and outlines the ideal process he wishes he had followed.

Closing Remarks (00:15:37)
Chad and Josh wrap up the episode and thank each other.

Links and Mentions:

Tools and Websites
Amazon
Shopify
Etsy

Transcript:

Josh 00:00:00  For everybody listening. You're able to avoid these mistakes that I made and help you move faster in your own journey as an entrepreneur. So let's talk about mistake number one is thinking that I have to be diversified in every sales channel, possibly or possible out there. Okay. Number two is going to be hiring people without having like clearly defined roles and probably hiring people to just solve a problem without me actually understanding the problem and very clearly defining that role. Number three is going to be waiting too long to document the processes in my business. And then number four is hiring trying to hire people at the cheapest rate possible. And then number five is launching or creating me two products that aren't 100% original or unique. So those are going to be like the five big mistakes that I'd love to share with the audience today. Today I am excited. I have Chad Franzen in here of rise 25, who has done hundreds of interviews with successful entrepreneurs and CEOs. We have flipped the script and he will be interviewing me today.

Chad 00:01:09  Yeah. You know, when I hear you list those mistakes, I think, like, I think most people would probably think along the same lines, that you were thinking maybe when you first started making those mistakes. So I think it'll be very, interesting and informative to hear some kind of your journey regarding these mistakes. Why don't we start with the first one? Having you felt like you had to diversify the business and communicate through all channels. Tell me, maybe what your thought process was going in and why. That seemed like a good idea at the time.

Josh 00:01:36  With Amazon, we were selling physical products, right? And we had this great idea that's like, hey, let's diversify ourselves. Let's go create a Shopify site. And then, hey, there's also this good opportunity on on Etsy where people are selling these digital files. And so we had this genius idea at the time that was like, okay, so many people talk about how, you know, physical products, brands, you know, so much crap gets tied up in inventory that cash flow becomes a problem.

Josh 00:02:08  So, yeah, I think it would be great if we did just digital products. Let's go dominate that on Etsy. And then let's open up our own Shopify site. We can maybe sell some of our physical products there, but let's really sell these digital products. And again, we did this all out of fear and running away from Amazon, which was which was working great for us. So we end up going in and we spend literally we spent the last those next three years from 2017 until 2020, we spent building out our our Shopify site, which honestly like I think the best day we had was like maybe like 1 or $200, which is just like laughable. as we looked at Amazon, we're making, you know, thousands of dollars a day there. so we spent three years working on Shopify. Then we're like, oh, we just need to figure out this external traffic thing and drive more traffic to our own Shopify site. So then we build a blog, and I have no experience building a blog.

Josh 00:03:07  So we spend an entire year working on a blog, hiring people for this blog that's making no money. And for this website, our Shopify site that's making absolutely no money for us. And we just continue to double down in the wrong place. All of our time and energy is focused on Shopify building a blog, growing our Instagram account so that we can feed traffic. We believed our problem was just that we weren't getting enough traffic and man, we just spent thousands of dollars, thousands of hours, with not only Becca and I, but our entire team trying to build this thing that really never took got off the ground. And but Amazon continued to churn out more and more revenue for us because we would we would continue to dip our toe in there. It's like, all right, it's maybe time to launch a new product. We would do it, but we could have been much more aggressive.

Chad 00:04:01  Another mistake that you mentioned that you made was you felt like you you hired people, but you didn't give them clearly defined roles.

Chad 00:04:08  Kind of take me back and tell me what that looked like at the time.

Josh 00:04:11  Yeah. So again, it's it's the whole mistake that we made with trying to diversify our income. Right. So this was 2019 okay. And in 2019 we had we were working with a business coach. and she was like, yeah, if you guys want to run faster, like you should probably if you want to grow more, you should go hire people. Well, here's the mistake. Just saying you should go hire people is not necessarily the right answer. You need to clearly know who should I hire? Why should I hire them? And how is this going to free up my time so that I can go do more revenue generating activities? But we didn't have like, clearly defined roles? That said, this is what needs to happen. These this is your day to day responsibilities, and this is what success looks like for you and your role. So instead, what we did is we obviously needed help finding external traffic to grow our Shopify site.

Josh 00:05:06  Right? So what I did is I tried to hire away this problem that we had. And so we paid close to six figure salary for somebody to come in. That was our marketing manager, and ideas were just bouncing all over the place and nothing was ever, like really sticking. It's like, hey, we want to grow our revenue here on Shopify. And anything that we really tested out, like nothing really got the ball rolling there. And so we ended up letting that marketing manager go. You know, less than a y...