The end of the year is a good time to reflect and learn. I’ve made many mistakes in my life. Some were more penalizing than others, and some may have cost me my company or set back years of my efforts.
Fortunately, because I also did a few things correctly, I ended up okay. But these mistakes are valuable lessons for me today, and likely for new entrepreneurs who want to maneuver the crazy startup/life jungle.
Interestingly, as I look through the list below, I realized one of the common themes in the mistakes below relate to caring too much about what other people think but not following what made sense to me. Good advice is golden, but following bad advice or mere pure pressure may be detrimental for an entrepreneur.
Here is list my top 10 mistakes in life as an entrepreneur.
10) Listen to MBA students from Anderson School to write a 60 page business plan
When I started my first technology startup as an undergrad at UCLA, I looked towards some students at the Anderson business school for some mentorship. To an undergrad student interested in business, MBA students were like masters of the universe, and we believed in everything they said. They advised that I create a very robust business plan that factored in all the MBA training they were receiving.
This whole process took more than 4 months of valuable startup execution time, especially when our plans keep changing. When the business plan was already 55 pages long, one of the MBA students said, “you still missed a section on listing out and describing the 5 Risk.” That was another one week.
At the end of the day, once I finally proudly displayed my 60 page bullet proof business plan to a Venture Capitalist, she annoying told me, “Oh we don’t look at anything beyond a presentation deck or a 1-page executive summary.” That crushed me.
Lesson Learned: just because someone is successful in their own rights doesn’t mean they are the expert at what you are doing. MBA students are generally smart individuals who worked mostly entry-level at big corporations like Consulting or Investment Banking Firms. Their achievements of being there is highly respectable, but often they don’t know a lot about how the startup world works.
Your divorce lawyer uncle is not a corporate lawyer. Don’t mistaken success to true relevant expertise.
9) Spent too much time making my first business “look legit”
Similar to the mistake above, when I started my very first business (not tech startup) first year in college, I was enthralled with the idea of having my own business.
I spent a lot of time figuring out legal options, website stuff, logos and business cards – basically the things that made me look like a “legitimate business.”
I did that for a couple months, and I felt great about it. However, I later realized I didn’t spend any time making my business actually more valuable. My ego probably got in the way (you know, like giving people a business card with a fancy logo that says you are CEO of your company), but since my business didn’t have true value or content, eventually all that was trashed as I moved on to other ideas, logos, websites and concepts.
Lesson Learned: many of the most successful companies came about as hobby projects that didn’t have any business structure before they got traction. Instead of making your business “look” legit, it is much better to focus on your product or talking to customers to ensure that they would actually buy your service once it is ready.
8) Trying too hard to fit into my business fraternity
In my second year of college, I was already a budding entrepreneur, and I was attracted by the Business Fraternity Delta Sigma Pi on my campus because I wanted to build relationships with other student entrepreneurs on campus.
I initially thought that everyone there would be running businesses too like I was, so I could learn from their advice and experiences. However, the group was mostly inspired and very intelligent college students who wanted to get into big corporate jobs like Investment Banking, Management Consulting, and Accounting.
I was the weird one out in the group, and for a long time I tried REALLY hard to fit in. Don’t get me wrong, joining Delta Sigma Pi was one of the best things I did in my life. The pledging for Delta Sigma Pi was difficult but superb training (I still muse about how good that training was a decade later), and I have met some of my closest friends in my life, including my past Co-founder Jun Loayza, through DSP.
However, my mistake was that, in the years after I joined, I worked too hard to do things that tried to fit in. I showed up at every single gathering and event, ready to help and create value. I worked to become an expert at case interviews for management consulting and even coached a few people into those careers. But ultimately, I was very bad at fitting in, and it seriously distracting to what I really wanted to do, which was to start new companies.
After a year or two of trying really hard to become more like those around me, one member of the fraternity mentioned in the group, “The one thing I really respect about Yu-kai is that he doesn’t give a crap about how others see him.” Clearly I failed miserably at becoming more like them.
Lessons Learned: sometimes when you feel like you don’t fit into a group, you feel compelled to alter your own plans to become better accepted. That often doesn’t work very well. Rather, it may be better to focus what you are passionate about, be the person you would respect yourself, and confidently live your life for who you are. Often, you will be respected and gain followers because of that.
A while later, I went back to pursue my own startups. Perhaps because I was doing things within my own element (or simply because I had more seniority within the organization), I felt I was more accepted and respected in the organization. That was also when Jun Loayza, who was always the “cool kid” I wanted to be like, came to me and said, “Hey, what you’re doing is really interesting. Can I join?”
7) Not understand black hat motivation when raising funding
When I was running my startups, I spent a good amount of time raising funding. It appears that investors liked me, respected me as an entrepreneur, and was impressed by my business. However, they kept telling me to come back with more before they would fund me.
In summary: White Hat Motivation makes people feel powerful, good, and in control, but there is no sense of urgency. Black Hat Motivation makes people feel urgent, obsessed, even addicted, but it may leave a bad taste in their mouths because they don’t feel like they are in control of their own actions.
Since I didn’t understand these principles, I focused on White Hat Motivation, telling investors how smart it would be to invest in my business and how big of an impact the business would do in this world. However, the nature of White Hat is that there is no urgency. They liked the business, but as long as they felt the opportunity would still be there a week later, they felt no urgency to invest immediately. This went on for a VERY long time and also cost the business greatly.
Lesson Learned: instead of just focusing on “being nice” and presenting a good investment opportunity, it’s important to add some black hat motivation during fundraising. I had to add more scarcity, exclusivity, and fear of missing out in my presentations, even if it made the investors feel slightly uncomfortable.
Interestingly, for one of my startups, when I finally raised $650k, I wrote to potential investors that were “waiting to see more” that we were closing the round. Surprisingly, many of the investors that seemed rather indifferent for an entire year suddenly seemed offended and pushed for us taking their investment. It was like we were burning bridges if we didn’t take their money. At the end, I was only looking for $600,000, but ended up taking $1,050,000 while still rejecting some money. It’s important to have both White Hat and Black Hat in any type of transaction.
6) Not letting go of people face to face
Being a leader sometimes means you have to make the hard decisions while stomaching the consequences.
One of most difficult, or emotional draining, responsibilities in my career is firing people. I have hired lots of people before, but I have also had to fire over a dozen of them, many of them being my friends. I once had to fire a guy I went to college with, whom I relocated from LA to Silicon Valley. I have only been living with him in the same apartment for a few months, where I realized even though he was a great guy and a cultural fit, his skill set wasn’t what the business needed for its challenges.
Sometimes the mistake I make is not that I let people go, but how I did it. In this one case (which is a life long regret), I was out of town and couldn’t come back in time. His team wrote to me asking me when will I do it because it was awkward that everyone else in the office knew besides him (so they wouldn’t give him more things to work on).
In that urgency (also Black Hat), I wrote a very long email informing him that he has been let go. There was a long side story of exactly what happened that day, but ultimately I saw later it was the wrong thing to do. I should have waited to come back first and do it face to face, show my concern and appreciation, and give him an opportunity to ask questions.
Since I was still living with him at the time, I was a bit scared to go back home at night since meeting him would be a quite awkward. He of course quickly moved out and relocated back to Southern California.
Years later I wrote another very long apology letter to him, telling him I was immature and made a big mistake, but he never responded. It still hurts me to this day.
Lesson Learned: quite simply, if you are to tell people of any decision that would negatively impact their lives, it would be better to tell them in person. Another small example was when one of my companies failed due to an unexpected event, I called our four interns that were driving from Berkeley and told them to turn around and go back, simply because I didn’t want them to drive an hour to the office, just to learn that they should go home. They all sounded so sad and confused on the phone.
Looking back, I should have had them come, giving them proper closure on why we had to shut down face-to-face and also allow them to ask questions. Telling them to turn back made logical and efficiency sense but was not emotionally appropriate for the occasion.
5) Hanging on to “promising hope” while risking personal well being
When that same startup above failed, we should have shut down our servers and ceased all operations. However, when we informed this news to an investor that is a public company, they told us not to and said, “Hey, we now decided that your space is a huge focus for our company. We could start our own devision, but we thought it would be better if we just invested another $1 Million into your business. If it takes off, we can then acquire you.”
From my own experience, I know most deals that sound great end up falling through, so I was skeptical. I also wanted the company to show that they will support us fully with their resources. In response to my skepticism, the CEO and the VP of the company were meeting me once to twice a week, and I thought, “Wow, that is very sincere of them!” How often do you meet a CEO of a public company more than once a week? So instead of shutting down our servers and other overhead costs (when we had no money), we kept it running in hopes we can revive the company.
After 2-3 months of back and forths, everything seemed ready to go. They just needed one last board meeting for the board to approve and then we were a go. We were optimistic and excited – we really needed the funding. Unfortunately, after a few days of not replying to our emails, they responded, “Sorry, there was one board member that really didn’t like the idea, so it’s probably not going to happen.”
Generally, this is fine, but because we kept our operational costs going, we got into debt that couldn’t be paid for when the investment deal fell through. Most people at that point have moved on to other opportunities, but as CEO of the company I ended up trying to make income elsewhere I paid $18,000 out of my own pocket to cover the debt that wouldn’t have been there if we just ceased operations. (Note: one of my Co-Founders came back to me two years later and wrote me a $1500 check, saying that he felt bad not taking responsibilities along with me because it was emotionally too much at the time, but now he wanted to make up a little bit for it. I REALLY appreciated it.)
Lesson Learned: Most deals fall through. Honestly. It doesn’t matter how good it looks nor how promising/sincere the other side seems to be. Chances are, the awesome deal would not happen. This isn’t to say that you should stop pursuing these great deals, but you should not put all your eggs in that basket to the point where you are devastated if it doesn’t go through.
Since 9 out of 10 amazing deals fall through, you need to make sure you can afford to pursue 10 of these instead of committing to one company savior. The nice thing is, as long as one of the deals really came true (or was at least half as good as how they pitched it), it would take your company to a whole new level and thrive. You just need to be able to withstand the setback if this one didn’t come true (oh yes, and ALL deals take much longer than you expect).
4) Focusing too much on customers, not investors (!!)
This is an odd lesson for me, because I still don’t like to believe this is a true principle to live by. When I was running that same startup from above, we determined that we shouldn’t focus our resources on “being cool” in Silicon Valley and impressing other entrepreneurs and investors. Those seem to be ego metrics that made us feel good. Rather, we should focus our resources on our customers.
We didn’t spend money creating presence at Tech Crunch and other startup conferences, nor tried to get press on startup media outlets. Rather, we sponsored conferences where our customers were at, such as the Multi-Unit Franchising Conference in Las Vegas and getting press in magazines our customers read. We figured, if customers loved us, investors would be logical to give us money later on.
Our strategy “looked” successful. We were really well known in our customer space, and many large franchise executives held meetings with us for national deployments. Our product was performing 11x better than our closet competitors, at least based on the press release they bragged about. We thought we were unstoppable.
Unfortunately, when it came to raise funding, as mentioned above, investors were impressed with our success but they lacked the emotional urge to invest. They carefully and logically invested in our track record and said they liked it a lot but would like to see more. Yes, this seems very natural for an investor, since investing should be a very logical trade. However, we had competitors that had less numbers but literally raised ten times more than we raised (so they did not need to worry about raising money before reaching new heights).
Lesson Learned: Besides taking up personal responsibility and saying I didn’t do the best job raising money, I believe it’s because the competitors were much more well known in the startup world and Silicon Valley. One of them came out of a famous incubator, and the other was closely related to another startup that also did something well-known. We realized that investors loved to invest into startups that they and their friends already knew about, so they could brag to their friends, “You know that company you keep seeing on Tech Crunch? I got in on that deal.”
Bragging rights! I learned later that instead of rationally looking at the numbers of a business, many investors decide to take that final jump for emotional reasons (which is actually true for all human beings). We may have looked good on paper, but the “Silicon Valley brand names” were emotionally more attractive. IF your startup relies on investor money to stay alive, THEY are your true customers. Your business customers are actually just a means to an end to raise more funding. As much as I hate this lesson, I will never forget it.
3) Trying to do something too far into the future
This is also an odd lesson for me, but apparently it would be “don’t be TOO visionary.”
After being an entrepreneur for a decade (with varying levels of success and way more failures), I realized that a big problem I had was that almost all my ideas were considered “too early.” Ever since my first business in college, I would talk to VCs (notice this theme of depending on VCs? Bad.) and they would tell me what I was doing was ridiculous and wouldn’t work. I then decide to give that up and pivot to something else (after all, of course these grownups were smarter than I was). 3-5 years later, all the VCs were suddenly fighting to fund other companies with that very model I did earlier, but unfortunately I had moved on.
When I approached them again with my new companies, they would say, “Yu-kai, your last business was actually right on! But your new thing here….that’s just ridiculous.” And of course, the same thing would happen again. Now keep in mind celebrity entrepreneurs who has had big exits in the past could raise a lot of money for crazy and audacious ideas. They then had the funding to truck through a few years until the market caught up. At the timing I wasn’t that celebrity entrepreneur, so I shouldn’t play by those same rules.
This is important for all those new aspiring entrepreneurs that often read how companies raise tens of millions of dollars before launching a product on Tech Crunch. In general, if you can’t raise money just on your past exit records, you generally need traction before you can raise significant money. Now how to get traction without the money you are raising is the difficult work of a resourceful entrepreneur.
Lesson Learned: Upon recognizing my tendency and problem, I realized I could adapt and adjust to that…no more crazy startups. Focus on what the world needs, not what it deserves (thanks Batman for bitter-sounding concepts haha). Sometimes your idea is brilliant and could really change the world (and every once in a while a lottery winner really does it), but if the world isn’t ready for it (investors or customers) and you don’t have the resources to stay alive until it does, you are only doing marketing work for new startups that will come out after your death.
LUCKILY, all my startup ideas and concepts surrounded this theme called Gamification (or Serious Games, or Gameful Design, Loyalty Programs etc.), so when gamification really became an industry that people KNEW they cared about, I was one of the very few people who have been doing it for close to a decade. I became a known pioneer in an industry that I had no idea was one. I wish that was a lesson regarding following your passion, but honestly I was just lucky that the world started to care about what I was passionate for a few years after.
2) Believing in a law firm even when it made no sense (a long one…)
(This one turned out to be an extremely long one. I was thinking about taking out the details here, but I ended up deciding that it’s specific experiences like these that can teach fellow entrepreneurs the most. You can skip straight to the Lesson Learned at the end if you want. It might actually make you laugh if you do it.)
When I was creating my earlier startups, I registered for an LLC. Then I learned that for a VC to invest in a business, I needed to be a C-Corp. At the time, a well known law firm in Silicon Valley (let’s just call it GD) reached out and offered their “startup friendly” program, which basically means they will do free work, mostly incorporation and fundraising, for us until we raised funding. These type of programs are quite popular in Silicon Valley and for any cash-strapped entrepreneur, it is a very attractive deal. We decided to bring them on to help us convert our LLC to a C-Corp.
The issue came when they appointed a very junior lawyer to work on our company, since we were’t a revenue generator and it’s a good opportunity for entry-level practice. They told us that it’s pretty complicated work to convert an LLC to a C-Corp and it would be “easier” to create a C-Corp from scratch and then transfer all the ownership and assets from the LLC to the new company. I was in my early 20’s and didn’t know any better, so I agreed with every proposal they gave.
Then afterwards, they said they created the new company, gave me an Articles of Incorporation from Delaware, and informed me that I should start doing transactions with the new C-Corp. They said, however, to do some final steps, they needed to charge regular legal fees. That came as a surprise to me, so I responded, “I totally understand you guys need to charge a fee for your services. But right now we’re really tight and I was wondering if we would be okay if we did this later when we get better funded?” They said yes.
The Bastard Bank Account
Since in my mind, I only had one company (I never wanted two) and all the business operations remained the same, I asked, “Yes I’ll do all transactions with the new company. But it’s a lot of work to setup a new bank account and transfer the money etc. Could I use the old bank account for now until I had time to make the transfer?”
This I still have email records of, but the junior lawyer replied “Yes.” This felt a little bit weird to me, because it felt weird to have two company structures using the same bank account, but again, I was just a kid who loved to innovate. What did I know about legal operations and business structures compared to actual prestigious lawyers? So I took his word and started doing all my paperwork with the C-Corp but sent and received money with the LLC.
This became a COMPLETE disaster that kept coming back to bite me over a 5 year period. First of all, accounting was a nightmare every year. I had no idea what I was supposed to do with the C-Corp tax return vs the LLC tax return. Since we couldn’t afford real accountants, I just tried to get Turbo Tax Business and file for the “relatively simple taxes” ourselves (since we didn’t have much revenue or expenses as a new startup…). Oh, since the LLC wasn’t completely closed, we had to pay $800/mo franchising fee for that, so for a while we were double paying.
The Legal Brokenness
There were also a lot of issues too relating to things we had to file for our business that we didn’t know about.
When we were hiring people, payroll services asked for my company EIN. Huh? What’s that? Oh, this number that every company should have, just like a Society Security Number. I guess GD forgot to tell us we needed to get this after they formed our business. That delayed us by a few weeks when we wanted to bring people on board immediately (which is hugely costly for a startup since at any given moment we only have months to live).
Then when we wanted to submit something to the app store, they asked for our California Number. Hmm, we only have a Delaware Incorporation number. Oh, we were a “Delaware Corporation operating in California” and need a CA number. I guess GD didn’t inform us of that either. That took another few weeks to get through governmental bureaucracy and delayed our product lunch by that much time – which again was costly.
When I finally brought in another boutique law firm a couple years later to look at what is going on and help clean up our stuff, they asked for a few more documents. I said, “We only have an Articles of Incorporation.” The Partner at that law firm then told me, “Did you know your two-year old corporation has no board, no board members, and no shareholders?” I replied (paraphrasing), “Oops. That’s not good. I don’t think our investors or cofounders would like that.” She replied, “Yes, I’m amazed how a big law firm like GD didn’t set these basic things up for you!”
In all honesty, I didn’t mind them not doing the work since I wasn’t paying, but I felt they should at least tell me what they didn’t do and what I had to do myself. I felt completely confident that I was working with a huge startup-focused law firm, and so I just believed that they setup everything well and I didn’t have to worry about it.
The IRS Audit
A few years after being completely frustrated with this “two-company setup,” I finally completely resolved it and shut off the old LLC. I thought my nightmares were finally over, until I was raising funding for my new venture, close towards the end of our runway (or the funding we had). At that time I suddenly got a request from the IRS to do an audit on my former LLC.
The IRS noticed that, the money going in our “LLC Bank Account” was different from the taxes we reported for the LLC. A big chunk of that was because, in order to stay alive, we did some web development contracting work. We got business from clients, took a middle fee, and paid a contractor to do most of the work. However, the clients revenue went into the LLC’s bank account. Even though we paid the contractor from the same bank account, as instructed we gave him a 1099 (proof of paying him for the IRS) through the new C-Corp as instructed.
This meant that, even though in our own books we only made a very small profit from the transaction, to the IRS our LLC business took in a whole lot of revenue and was highly profitable, while our C-Corp business paid an expensive contract and was hugely in the loss. Being very concerned, I finally hired an accounting firm to help me handle this, even though we were already low on funding.
The accountants looked at the case, and said, “Well, based on the records and the mix-up of the bank accounts, the best case scenario is that you pay a penalty fee to the IRS. The worse case scenario is that you are seen as committing fraud and could see jail time.” That caused me to panic. Even if I didn’t end up going to jail, just news of the investigation would cause any pending investor to back off and would kill my company, now with over a dozen employees in it.
Not only did I pay the accountants quite a bit to retroactively go through the books of two companies for a few years (costly in itself), I spent almost full time gathering information, getting old statements of a company I already closed from the bank, and discussing how should we explain this to the IRS.
Don’t forget I was still trying to raise money for a startup that is near it’s runway! Needless to say, it was extremely emotionally draining and distracting for my fundraising efforts. I can’t say our company died because of this issue, but it certainly impacted us some.
At the end of the period, we gave the IRS everything, and they said they will come back to us with the results later.
The Law Firm Slaughter
I wished this was the end of my negative experience with the law firm, but unfortunately it was not. At this point, even though we were damaged badly by GD’s bad advice, I believed it all came out from an honest mistake from a junior lawyer who had no bad intentions. I didn’t want him to become penalized by this (since at the time I still regarded him as a friend and congratulated him on his new children), so as long I could survive through the turbulence, I would rather focus my energy on making my startup better.
However, for one reason or another, the IRS took two years to come back to us and said the LLC owners were personally penalized as a result of the audit. At the time, we just closed our startup and were in very poor financial situations. I also just got married. It was an amount that was very difficult for us. Finally, feeling that I had no options, I reached out to that corresponding lawyer (who is now more senior) and shared the conundrum I was in. I told him I still cared for him and didn’t want to affect his career, and asked for his advice on what I should do.
He didn’t respond to my email, but to my surprised, a Founding Partner of the large law firm reached out to me and wanted to talk on the phone. At the beginning, he sounded very personable and understanding, but he pretended to be dumb, saying things like, “Well I don’t know if I’m allowed to talk to you directly without you having an attorney. Usually our insurance takes care of that.” There were many other points where he said he doesn’t know the regular procedure and defers to insurance “being the strict bad guys” while he was my friend. My other lawyer friend called BS on that later because as a Founding Partner at one of the most prominent law firms, he would have to know these rules of engagement. And if not, why was he the one that reached out to me?
The Partner also pulled some “Core Drive 5: Relatedness” punches such as saying that he wife was an entrepreneur and he totally empathizes with how hard our jobs were). But at the end of the day, he said, “Well, this happened many years ago. And the Statues of Limitation says that if something is many years passed the event, you can’t come after us. I’m sorry.” So I responded, “So we were penalized because we were trying to be nice and not cause troubles until we absolutely had to.”
He said, “Well, that’s just the rules. I didn’t make it.” (Btw, I’m just paraphrasing what I heard, but he was very careful to not leave an email trail in any of our conversations). After a few more back and forths, he said, “What if we just paid you $5000 and called it quits. Also, from the books it looks like you owe us $4,621 in legal fees from years back. We can cancel that too as good will.” I thought “Oh I had no idea that I owed them this amount since I never got a bill – wonder how they came up with that, but ultimately it’s the bill they are charging us for the service that got us screwed…”
I responded, “I really appreciate your offer, and would feel better about things because you guys decided to take responsibility. Keep in mind that, since we like to be authentic and share our learnings with other entrepreneurs, we wouldn’t proactively talk about this, but if others specifically asked us about you guys, we would share what happened in a very fair manner, INCLUDING how you resolved it. I hope that’s fine.”
He said he can’t let that happen. If they’re doing anything at all, we need to shut up about it. He asked how much it would take for us to shut up. I wasn’t thinking about an amount, but finally said $25K. If you read what happened to the above (including disabling me from raising funding because of potential fraud penalties), you’ll see that $25K isn’t anything compared to the devastation that we went through because of them and is hardly a difficult amount for the company to pass out. Honestly, if I recount the 10 darkest days of my life, at least 4 of them was a result of their mistake. I don’t think I was being greedy nor unreasonable.
He said no.
Two More Years of Pain
After that came a TWO YEAR process that went back and forth where I believe he was playing mind games and switching between being avoiding, passive aggressive, and accusing.
He also said a lot of contradictory things. In one of the earlier calls, I said, “Well, I understand why you guys would have junior staff work with startups that aren’t paying and minimize your work on those projects. I just happened to be burnt really badly because of that.” And he would respond, “No. Our company provides the best professional service to all the startups. We only advised you certain ways to help save you money and lower your legal costs.” But ten minutes later he would then say, “Well you weren’t a paying company, so why would you think we would provide this to you?”
He also kept telling me how this is the first time they ever had a complaint like that, which turns out to be a lie because later I randomly met a mentor who said his daughter’s startup also had a terrible experience with the same law firm and they treated her badly when she complained too.
This I REALLY disliked, because whereas the initial issue I believe was a true honest mistake that happened to be costly, this was pure dishonest manipulation. That’s why when he eventually countered-proposed $10K, I said no. I wanted to hold firm on my number since I thought it was fair. It was a matter of principles and respect.
Of course, after two years of this crap I got drained. I no longer had the emotional energy to deal with it. Everything else in my life turned out to be very positive, but this was still an issue that made me cringe every time I dealt with it. I heard this was their tactic, drain you out so you give in. I was ready to give in.
So I finally let go of principles and I compromised. On a new call, he said, “I’ll meet you in the middle. $15K.” And I finally said okay. I was relieved that I didn’t have to deal with this crap anymore. He said he’ll give me paperwork in a few days.
Then suddenly, he disappeared again for weeks. I didn’t know what he was doing but he ignored my follow-ups too. Some mentors said he’s still playing mind games – he’ll probably do something unexpected again. After multiple follow-ups, he finally returned and said they were really busy so didn’t have the bandwidth to draft this up (which I found hard to believe since they had a firm full of lawyers). I looked at the contract, and it said they will pay us the $15K we agreed on, BUT every time we shared what happened to us to someone else we would have to pay $50,000.
I didn’t feel comfortable with this kind of imbalance, but again, I was really drained so I just wanted to get it over with. I agreed with the terms and was ready to get my past co-owners to sign it.
This is when the Law Firm Partner suddenly wrote to me, “Oh I didn’t realize that you owed us legal money. How about this, we will deduct half of that from the $15K so it would become $12,689.50 instead. If you can agree with that I can sign now.”
Honestly this was the last straw. He CLEARLY knew about the “unpaid legal fees” because he was the one that introduced it to me in the first place and even used it as a negotiation device. Now that we have finally agreed with everything, he pretends that he did not know it exists and tries to negotiate just a little bit more. Again, it’s not about the money but about the principle and about being disrespected after they accidentally put us in a bad position.
A few things happened after that, but at the end of the day, I decided to fully let go of the whole thing. I was able to pay the IRS penalty on my own (with my wife’s help), and I decided I no longer wanted to be censored for my entire life in fear of being penalized $50K every time I slip. Plus, this is honestly a cautionary tale for all young entrepreneurs who just want to change the world but don’t know anything about dealing with legal service providers. And this is why I can happily share this experience here – it cost me $12,689.50 to do it.
Lesson Learned: Don’t fully trust lawyer BS if it doesn’t make logical sense to you. (And be careful of “startup friendly” packages from law firms).
1) Not caring about my health when being a workaholic
Okay, the last one was way long so I’ll try to make this a straight forward one. When I was a young entrepreneur, I worked over 100 hours a week (40 hours to sleep, 28 hours to eat, restroom, shower, no social life, and the rest of the 100 hours working). I was young and felt invincible. My work was my game and I loved it. I ate microwave food and worked in bad postures. I did not smoke (at all) or drink much, but didn’t exercise much either.
Unfortunately, it later all caught up to me. Even though to most peoples’ standards, I’m quite successful, especially for someone who’s not even 30 yet, I also have a lot of problems with my health. I have chronic spinal pain that feels like electrical shocks on my spine. Occasionally my right shoulder would hurt as it if was burning. My knees have pain too and sometimes they would fail me when I’m just walking randomly. I have migraines that come on and off. And there’s other stuff.
The reason why I’m not sugarcoating the severity of my conditions is that I want people that are younger to know that THIS IS SERIOUS! My dad used to tell me that, “With your posture right now, you’ll later regret it when the pain comes in.” I didn’t believe him. Working with a laptop on my legs felt very comfortable – how can it be bad for my health when it’s so comfortable? I now SERIOUSLY regret that I don’t listen to him.
Of course, every time I see an acupuncturist, chiropractor, or some other doctors, I would feel better. But after a few weeks either it would come back, or some other pain would creep up. Honestly, if it stayed like this my entire life, I would be okay about it. However, most people get these types of problems when they are in their 40s. If I start getting these pains when I’m 30, I can’t imagine how bad it would be when I’m 45. So for 2016 my goal is to seriously focus on improving my health and pay back the “debt” I accumulated over the past 10 years.
Lesson Learned: Your health is truly your greatest asset. If you gain the world and lose your health, it becomes meaningless. Please, as much as you love your work, take care of your health.
It’s your turn to share:
Now that I have shared all my vulnerable mistakes, what are some of the biggest mistakes you made that others can learn from? Please share in the comments below!