How much money have you lost in a day? In this episode, I’m going to tell the story of how I lost $11 million in one day, and some secrets I learned that helped me become a digital monetizer.
How I Lost $11 Million in 1 Day
In just 5 years between 1995 and 2000, the Nasdaq had skyrocketed more than 500% from under 1,000 to more than 5,000. The Nasdaq peaked at 5,048 on March 10, 2000, and by October 4, 2002, had plummeted by 76% to only 1,139. By the end of 2001, most dotcom stocks had gone bust. (Source: Investopedia)
The Collateral Damage
When the dotcom bubble burst my company had not yet reached profitability and was dependent on investors who were funding our software development and marketing. I painfully remember losing $11 million in a single day on the stock market, all from my ownership in my company. When the dotcom bubble burst, investors stopped almost all of their investments in Internet companies. After all of our investments dried up, our investors and I lost the company. I feel horrible for the investors who trusted me and lost their investments, the great team members who lost their jobs, and the hardships that resulted for their families.
The next year, as I focused on growing a horribly unprofitable Internet business, I only earned about $11,000 total for the entire year or about 1% of what I had lost in a single day the previous year. My family survived in part because of the generosity of others, such as my sweet mother-in-law, Laree Ullery, who regularly brought us groceries and diapers for our new baby girl.
When our daughter was only a couple of weeks old, a key employee quit. This was understandable because of our tenuous financial situation, but we didn’t have the funds to hire a replacement. My wife Crystal stepped into that role and then another, and did an amazing job at everything she touched. She worked for more than 2 years, bringing our daughter with her to work each day, without being paid anything, to help us get back up on our feet.
Our oldest daughter spent the first two years of her life coming into the office. As soon as she learned to walk she began going from office to office, pushing the “off” buttons on everyone’s tower computers. She was delighted at how quickly this got our attention. We finally got smart and started taping business cards over the buttons.
Heat Seeking Missile Aimed at Monetization
The first secret that I learned from this catastrophic experience was to be insanely focused on monetization. During the time leading up to the dotcom bubble I was doing a lot of “good” things that an entrepreneur should do, such as working with press releases and the media, raising money and managing relationships with investors, finding and operating an office space, dealing with HR issues, etc. These are all important things. However, our unprofitable business was like an airplane on a runway. We were trying to get the acceleration we needed to take off but the sudden dotcom bubble burst instantly shortened our runway. I had been so focused on “good” things, that I didn’t spend enough time focused on the most important thing: Monetization… getting us to profitability as fast as humanly possible.
This experience seared into my soul the lesson that as an entrepreneur my top priority is to be a heat seeking missile aimed at monetization. When a business reaches sustainable profitability it is no longer dependent on investors and to a great degree becomes the master of its own destiny. When my business was not profitable I did not have the luxury of being distracted by anything other than the top priority of monetization. If I had it to do over again, I would have locked myself in a room with my developers and would not have come out until we had a software product that was completed, working great and that our customers loved.
This doesn’t mean that other things like HR issues are not important. However, the best thing that entrepreneurs can do to provide stability for its team members is focus on monetization and get their business to sustainable profitability.
The Tightrope Walked by Entrepreneurial Spouses
The second secret that I learned from losing this business is the irreplaceable role that a supportive spouse plays in the journey of every successful entrepreneur.
Russell Brunson has said “You can only be as successful as your spouse allows you to be.” That has definitely been true with me and my entrepreneurial journey. It would have been so easy after that failed business crisis for my wife Crystal to tell me we were done creating businesses and that she wanted me to take a stable job. However, she instead has always been incredibly supportive through our entrepreneurial adventures.
It has been a huge gift in our marriage, to feel Crystal there for me during the hard times and not just the good times. She didn’t turn on me during the crises and criticize me for my failures. Instead, she rolled up her sleeves and did everything she could to help us solve the problems, and demonstrated her faith in me.
In my favorite movie, the movie Greatest Showman, Charity Barnum sings the song
Tightrope, which is the anthem of the entrepreneurial spouse:
Some people long for a life
That is simple and bland
Tied with a ribbon
Some people won’t sail the sea
Cause they’re safer on land
To follow what’s written
But I’d follow you
To the great unknown
Off to a world we call our own
Hand in my hand
And we promise to never let go
We’re walking a tightrope
High in the sky
We can see the whole world down below
We’re walking the tightrope
Never knowing how far we could fall
But it’s all an adventure
That comes with a breathtaking view
Walking the tightrope with you
I’m so grateful for my dear Crystal, for always holding my hand, and catching me when I’ve started to fall off the entrepreneurial tightrope. She has sacrificed so much and paid a heavy price for our entrepreneurial successes. None of this would have been possible without her.
The third secret I learned from this situation was the immense power that tectonic shifts have to drive destruction and growth.
Through my entrepreneurial journey, I have seen first-hand “tectonic shifts” that have transformed the business landscape. The Earth’s crust is made of large tectonic plates. These plates sit against each other but they are constantly moving. Underneath them is molten rock that makes up the Earth’s mantle. It causes the tectonic plates to move and shift. These tectonic shifts are best known for causing massive destruction, such as earthquakes. However, tectonic shifts also cause massive growth, such as mountain formation. Likewise, tectonic shifts in business can cause massive destruction and growth.
At the start of my entrepreneurial journey, I had seen a huge tectonic shift from bricks and mortar businesses to internet businesses. I had been blessed with the opportunity to seize that tectonic shift, which resulted in the launch of my publicly-traded company. However, I didn’t focus on monetization enough and get us profitability fast enough to avoid the destructive power of the dotcom bubble burst. If I had focussed everything on monetization and been successful at reaching profitability before that dotcom bubble burst, then I might have mitigated the tectonic shift of the dotcom bubble bursting, and we may have been able to save the business.
The Journey to Become a Digital Monetizer
Over the past 23 years, I have gone through a journey to become a digital monetizer. I have been blessed to be part of many successful entrepreneurial ventures and have sold multiple digital ventures. During this time I have seen the business world go through numerous tectonic shifts and have extensively studied 8 of the major tectonic shifts we are in the middle of today.
I am writing a book titled Monetization Secrets to share some of the most important secrets and stories I have learned through this journey to become a digital monetizer. In addition to my personal secrets and stories, I will be regularly interviewing highly successful entrepreneurs and business leaders and sharing their stories and secrets as well. I invite you to join me in this journey and become a digital monetizer yourself by following my Monetization Secrets blog, YouTube Channel, and podcast.
Here are some of the key takeaways that stood out to me from today’s episode:
1. We should try to remove all distractions possible and focus on monetization, striving to get our companies to profitability as quickly as possible.
2. We should regularly express gratitude to our spouses, and to God for our spouses, for the sacrifices they make and the important roles they play in our entrepreneurial journeys. They are far more important than anything we are trying to do in our monetization journey. We are embarking on our monetization journey so that we can provide well for the people we love and make a great contribution for good in the world.
3. We need to quickly identify, leverage, and protect our businesses from the tectonic shifts that are changing the business landscapes around us.
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If we desire monetization we have never before achieved, we must leverage strategies we have never before implemented. I challenge each of us to pick one thing that resonated with us from today’s episode and schedule a time this week to implement it to help achieve our monetization goals.
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