This last week has not been as eventful as the last few, which is unsurprising as my advisor has been out of town for the better part of the week. Regardless, I used the time I had to get some reading done. I continued my reading of the book I mentioned in my last post, The Business Plan Workbook, and began reading through a number of case studies detailing the growth patterns and trajectory of other startup businesses in the past. Reading these case studies has been intriguing purely because it's unnerving how many ways a fledgling business can fail. More often than not, people believe that business will fail when the business doesn't sell enough to cover their costs. That's not false of course but there are a number of factors which can contribute to such an unfortunate result.

One of the case studies which stood out to me the most was that of 99Dresses, a company which allowed women to trade fashion items with other users. The founder of the company, a woman by the name of Nikki Durkin, created the startup almost straight out of high school with little direction and essentially no experience. Her business expectedly failed as a result as she found out almost each and every way it could have folded. She wrote a case study of her own experience in an attempt to make other hopeful business owners aware of the always apparent risks.

One of the risks she writes about is having the wrong people around you. As a business owner, it is very easy to trust the wrong people and bring them on as cofounders or other important team members. These people may not have the same vision in mind for the company as you do, they may be invested in the company from a purely monetary standpoint, or they may simply be people whom you are unable to get along with. Regardless what the case may be, having a team in place which holds the same beliefs you do as a business owner is vital. One specific instance which Durkin writes about is an event which caused one of her cofounders to step down due to having a different set of opinions on the future of the business. This happened just after the business was able to secure over 1.2 million dollars in invested capital. Unfortunately, since many investors saw the cofounders resignation as a sign of weakness, that $1.2 million fell down to about $500,000 in a short time after which only proves that starting a business with your friends or close relatives may not be the best idea.

That was just one of the biggest takeaways for me. There are of course other risks to be aware of such as ineffective marketing campaigns which have the ability to suck you dry of any and all money as well as low customer loyalty which can leave you standing on a cliff of irrelevance. Regardless, starting a business is one of the scariest things you can do and a venture in which one has to always be vigilant about possible risks.