The history of the failure of the online store
Usually, studying the activities of others, you meet only success stories. However, you can often get great benefit by studying why one or another idea failed. Similar stories are periodically found on Habré, and this speaks in favor of Habr as a mega-useful resource, and in favor of the courage of the authors of these stories.
They will show a finger, spit and trample down. So, probably, thinks everyone who hesitates doubts about - to describe their failures or not. Yes, of course, it is easy to judge with hindsight. Making decisions while inside the situation is much harder.
I did not dare to do this for a very long time, but something persistently moved me. I think it was a natural desire to help other people - in this case at least advice on how to do it is not necessary.
2005, Moscow . For several years I have been working in a young and petty, but budding web company that managed to hook a couple of very large customers for constant service. A good team, tolerant attitude of the authorities, free schedule, etc.
Prior to that, together with a partner, I implemented a successful startup that was successfully sold. But soon after that, my interests changed, and since there were no ideas for my own project, I got a job as an employee. He knew how to write perl tolerably well, understood how the web works, more or less understood javascript.
')
And suddenly one person gave the idea to make a joint project - an online store. My project is always more interesting than hired work, so I agreed to try. In principle, it was decided to do everything from scratch and without investors. The argument of the partner: “work for an investor is no different from work for hire”.
For days I continued to work in the office, and in the evenings and weekends I wrote a perl store. At that time, probably, there already existed CMS on php and even, probably, ready-made stores - but it was decided to make one's own. Arguments:
- like to program, why not nakodit
- to study php, to dig into someone else's code, I do not want
- I’ll better deal with anything in my own than in someone else’s - if I need to do functionality that is not represented in the finished product (and probably will have to be done) and correct possible product errors (for sure there are such things everywhere)
- after each product update, you will have to test whether the functionality that has been changed and corrected by me works
The design was done on its own, believing that the main thing in the store is usability and attractive offers. Long or short, and in six months of this mode, the store was made in the first approximation. Showcase, order processing system, content editing system and reporting system. In the summer he worked in testing mode, in September he opened “officially”.
They decided to trade according to the system “under the order” - thus it was not necessary to invest in your warehouse.
I studied the Yandex.Direct and Runner advertising systems, and after the launch of advertising, such a decent amount of orders went that made me think. After all, then it will only get better, right? Therefore, I made a risky decision and quit my job.
It was decided to hire couriers - at that time, transport companies fattened and offered their services at a price three times higher than the price we paid the courier for each delivery (companies had couriers, as a rule, are road, ours could carry orders for the metro) .
So, the two partners had the following list of responsibilities:
- server administration
- programming
- filling the site with content
- search and work with suppliers
- recruitment and training of couriers
- work with couriers, planning delivery routes
- collection of products from suppliers
- assembly of orders
- calling customers and receiving calls
Surprisingly, two people coped with it.
Errors :
- Work from a complete zero is fraught with a very long and time-consuming rise. Of course, if you are lucky to make a product / service that suddenly becomes very popular - well, you are very lucky. 1 case out of 10,000. And if this is, for example, trade, then cash gaps begin, as well as sucking money into a product and other amenities. If the growth of orders exceeds the percentage of profit from sales, then there is not enough money. The situation seems to be paradoxical - sales are growing, but there is no income. In such cases, much needed recharge from the side. Yes, of course, first of all, the sponsor / investor must also be searched. Secondly, it is necessary to consult with him on all issues - as I understand it, in Russia, with investors like “angels”, stress (and 10 years ago they were not heard of at all). And usually a person with money wants to just buy at least 51% of the business and distribute commands, or just soon sell it at a higher price. Well, there is no ideal. In any choice there are pros and cons, they must be weighed in advance.
- the desire to do everything yourself and save money leads to the fact that you bury yourself in the work and a lot of things do not have time, and besides, the quality of the product suffers. Sometimes it is necessary to outsource specific things such as developing a design or creating an advertising campaign. Yes, you lose part of the profits, but you get something more valuable - personal time. Which can be spent on strategic planning, for example. For example, when we finally decided to turn to specialists in contextual advertising, their campaign was about one and a half times more effective than mine (counting on the final cost of the buyer). Well, there’s nothing to say about the difference between a design made by yourself and a design made by a good designer.
- Do not try to do everything yourself from scratch. At least in the first stage, it is easier to take a ready-made CMS system and adapt to it - this, again, frees up a lot of time for management activities.
- I had to learn php. Now, judging by the vacancies on the web-programmers market, more than php programmers, perhaps, only javascript specialists are required.
- the more you give to outsource, the better. Working with your couriers was a source of incessant headache. Hiring, training people, dismantling problems with delivery, developing routes ... Problems with seasonality, when the number of orders increased sharply. It was necessary to balance independently between when there are too many couriers and they are not interested in working, and between when there are too few and they do not have time to make deliveries. Many deliveries had to be done independently due to the lack of couriers or due to the large weight of orders. Well, incurring losses in the event of the disappearance of couriers with the goods. By the way, the native police in these cases showed me such specific refusal that I lost faith in this organization forever. In general, couriers are what first of all should be given to a third-party company. And let there be more shipping costs - this is a fee for a quiet service, when you place an order for delivery, and the company does everything else, including the one bearing financial responsibility.
- The first version of the store was made in a procedural style. And over the years, new features were added there, of course, that you could not even immediately envision. This turned into a nightmarish spaghetti code with a total volume of more than 500 kb, which was getting worse and worse each time. When creating a large project, pay special attention to good structuring (OOP, MVC).
- working for yourself is cool, it captures. But it is also very difficult, without any guarantees of success and very hard. And if it didn’t work out, it’s psychologically very difficult to return to hired work.
2006–2008 . Sales grow by 50% every year, new suppliers appear, everything is bundle, it blooms and smells. We continue to work with our couriers. In the clever head comes a brilliant idea. Why do we have to pay for the office-warehouse, if we can buy an apartment on the mortgage? This is an investment in real estate. When we pay for rent, this money goes nowhere. And when we pay the mortgage, we get an apartment in the final. It will always be possible in the event of what to sell more. We take odnushku, place an assembly point and a mini-warehouse there, we will receive couriers there.
I remind you that in the first half of 2008 real estate prices continued to grow, and the dollar continued to fall steadily. Of course, in early 2008, American banks began to collapse, but who knew that this would bring down everything else so much? Usually, everyone argued in the style of “this is the way the USA should.”
No sooner said than done. Credit taken in dollars.
Errors :
- The office is really rarely needed. But only because the majority of MI operations can and should be outsourced. Operators - call center. Couriers - transport company. Ideally - to remove a corner in a warehouse of a transport company and collect orders there.
- you can not take a mortgage
- In general, you can not take a mortgage!
- in general, loans are evil. The loan is taken because “I want something now, well, then I will pay later, because everything will only get better”. This is a dangerous delusion. You may not know what will happen tomorrow. The principle should be simple: accumulated - bought. There is the option of taking a business loan in a bank, but this is also not a sugar deal, and in many ways resembles the presence of a private investor. Only with the bank is it even harder to negotiate.
- Do not mix business and investment. It is better to invest business revenues directly into it.
- this is only the USSR did not depend on the financial collapse in the United States
2009 It got worse. For the first time since the beginning of work, the quantity and amount of orders went down. I had to tighten the belt. The dollar grew, and the loan was necessary to give. Well, nothing, the crisis will end sooner or later - we reasoned ...
Errors :
- the global financial crisis does not end quickly
2010 Against the background of the crisis, transport companies restrained their appetites, and began to lower prices. One of the beginning TCs came to us through cold calls and offered us the same shipping cost as we had at that time with our couriers. We, of course, agreed.
Sales continued to fall. Money was getting less and less, and the loan had to be given back. After trying to negotiate with the bank and borrow money, it became clear that there was nothing to do. I had to sell “investment in real estate”. And by that time prices fell so much that the apartment was able to be sold for an amount even lower than the debt to the bank. And we found ourselves in a situation where we owe a bank money for an apartment, which is no longer there.
Although our situation has drastically deteriorated - we didn’t want to give up the case to which so much power was given.
Errors :
- it seems to me, it is better to determine in advance the time after which you promise yourself to leave the suitcase without a handle and do something else. The more time you endure, the more offensive then you quit. And time is running out.
2011-2013 . In mid-2011, the first timid growth in sales went. Compared to 2008, the sales are 2 times less, but still there is growth. And when there is growth, throw the case even more insulting.
However, the growth was about 5% per year, which is incomparable with the pre-crisis growth, and in itself is too small. The growth in the number of orders was greater, but the average order amount was greatly reduced. But already developed such a strong habit and affection to work, that it was very difficult to leave him.
2014 Sales began to fall again. Many entrepreneurs are now celebrating a fall in both trade and services. I don’t know what it is connected with - analysts, as always, have a huge number of options to choose from. But most likely the market is close to chaos - minor changes lead to serious fluctuations, and it is impossible to calculate what exactly caused the decline or growth. Besides, it is not so important. It is important that I had to gather courage into a fist and admit to myself in the failure of the enterprise. Or, at least, that expectations were not met.
Errors in the whole project :
- define in advance your expectations from the project and the timing of these expectations. For different projects they will be different, but they must be reasonable. Promise yourself that you will leave the project if it has not reached the specified level in the specified period. Better do something else faster.
- follow the new trends in the industry, and try all the time to learn new things. Plan your employment so that you have time to master the spare tool.
I wish you success and successful learning from the mistakes of others.
They will show a finger, spit and trample down. So, probably, thinks everyone who hesitates doubts about - to describe their failures or not. Yes, of course, it is easy to judge with hindsight. Making decisions while inside the situation is much harder.
I did not dare to do this for a very long time, but something persistently moved me. I think it was a natural desire to help other people - in this case at least advice on how to do it is not necessary.
2005, Moscow . For several years I have been working in a young and petty, but budding web company that managed to hook a couple of very large customers for constant service. A good team, tolerant attitude of the authorities, free schedule, etc.
Prior to that, together with a partner, I implemented a successful startup that was successfully sold. But soon after that, my interests changed, and since there were no ideas for my own project, I got a job as an employee. He knew how to write perl tolerably well, understood how the web works, more or less understood javascript.
')
And suddenly one person gave the idea to make a joint project - an online store. My project is always more interesting than hired work, so I agreed to try. In principle, it was decided to do everything from scratch and without investors. The argument of the partner: “work for an investor is no different from work for hire”.
For days I continued to work in the office, and in the evenings and weekends I wrote a perl store. At that time, probably, there already existed CMS on php and even, probably, ready-made stores - but it was decided to make one's own. Arguments:
- like to program, why not nakodit
- to study php, to dig into someone else's code, I do not want
- I’ll better deal with anything in my own than in someone else’s - if I need to do functionality that is not represented in the finished product (and probably will have to be done) and correct possible product errors (for sure there are such things everywhere)
- after each product update, you will have to test whether the functionality that has been changed and corrected by me works
The design was done on its own, believing that the main thing in the store is usability and attractive offers. Long or short, and in six months of this mode, the store was made in the first approximation. Showcase, order processing system, content editing system and reporting system. In the summer he worked in testing mode, in September he opened “officially”.
They decided to trade according to the system “under the order” - thus it was not necessary to invest in your warehouse.
I studied the Yandex.Direct and Runner advertising systems, and after the launch of advertising, such a decent amount of orders went that made me think. After all, then it will only get better, right? Therefore, I made a risky decision and quit my job.
It was decided to hire couriers - at that time, transport companies fattened and offered their services at a price three times higher than the price we paid the courier for each delivery (companies had couriers, as a rule, are road, ours could carry orders for the metro) .
So, the two partners had the following list of responsibilities:
- server administration
- programming
- filling the site with content
- search and work with suppliers
- recruitment and training of couriers
- work with couriers, planning delivery routes
- collection of products from suppliers
- assembly of orders
- calling customers and receiving calls
Surprisingly, two people coped with it.
Errors :
- Work from a complete zero is fraught with a very long and time-consuming rise. Of course, if you are lucky to make a product / service that suddenly becomes very popular - well, you are very lucky. 1 case out of 10,000. And if this is, for example, trade, then cash gaps begin, as well as sucking money into a product and other amenities. If the growth of orders exceeds the percentage of profit from sales, then there is not enough money. The situation seems to be paradoxical - sales are growing, but there is no income. In such cases, much needed recharge from the side. Yes, of course, first of all, the sponsor / investor must also be searched. Secondly, it is necessary to consult with him on all issues - as I understand it, in Russia, with investors like “angels”, stress (and 10 years ago they were not heard of at all). And usually a person with money wants to just buy at least 51% of the business and distribute commands, or just soon sell it at a higher price. Well, there is no ideal. In any choice there are pros and cons, they must be weighed in advance.
- the desire to do everything yourself and save money leads to the fact that you bury yourself in the work and a lot of things do not have time, and besides, the quality of the product suffers. Sometimes it is necessary to outsource specific things such as developing a design or creating an advertising campaign. Yes, you lose part of the profits, but you get something more valuable - personal time. Which can be spent on strategic planning, for example. For example, when we finally decided to turn to specialists in contextual advertising, their campaign was about one and a half times more effective than mine (counting on the final cost of the buyer). Well, there’s nothing to say about the difference between a design made by yourself and a design made by a good designer.
- Do not try to do everything yourself from scratch. At least in the first stage, it is easier to take a ready-made CMS system and adapt to it - this, again, frees up a lot of time for management activities.
- I had to learn php. Now, judging by the vacancies on the web-programmers market, more than php programmers, perhaps, only javascript specialists are required.
- the more you give to outsource, the better. Working with your couriers was a source of incessant headache. Hiring, training people, dismantling problems with delivery, developing routes ... Problems with seasonality, when the number of orders increased sharply. It was necessary to balance independently between when there are too many couriers and they are not interested in working, and between when there are too few and they do not have time to make deliveries. Many deliveries had to be done independently due to the lack of couriers or due to the large weight of orders. Well, incurring losses in the event of the disappearance of couriers with the goods. By the way, the native police in these cases showed me such specific refusal that I lost faith in this organization forever. In general, couriers are what first of all should be given to a third-party company. And let there be more shipping costs - this is a fee for a quiet service, when you place an order for delivery, and the company does everything else, including the one bearing financial responsibility.
- The first version of the store was made in a procedural style. And over the years, new features were added there, of course, that you could not even immediately envision. This turned into a nightmarish spaghetti code with a total volume of more than 500 kb, which was getting worse and worse each time. When creating a large project, pay special attention to good structuring (OOP, MVC).
- working for yourself is cool, it captures. But it is also very difficult, without any guarantees of success and very hard. And if it didn’t work out, it’s psychologically very difficult to return to hired work.
2006–2008 . Sales grow by 50% every year, new suppliers appear, everything is bundle, it blooms and smells. We continue to work with our couriers. In the clever head comes a brilliant idea. Why do we have to pay for the office-warehouse, if we can buy an apartment on the mortgage? This is an investment in real estate. When we pay for rent, this money goes nowhere. And when we pay the mortgage, we get an apartment in the final. It will always be possible in the event of what to sell more. We take odnushku, place an assembly point and a mini-warehouse there, we will receive couriers there.
I remind you that in the first half of 2008 real estate prices continued to grow, and the dollar continued to fall steadily. Of course, in early 2008, American banks began to collapse, but who knew that this would bring down everything else so much? Usually, everyone argued in the style of “this is the way the USA should.”
No sooner said than done. Credit taken in dollars.
Errors :
- The office is really rarely needed. But only because the majority of MI operations can and should be outsourced. Operators - call center. Couriers - transport company. Ideally - to remove a corner in a warehouse of a transport company and collect orders there.
- you can not take a mortgage
- In general, you can not take a mortgage!
- in general, loans are evil. The loan is taken because “I want something now, well, then I will pay later, because everything will only get better”. This is a dangerous delusion. You may not know what will happen tomorrow. The principle should be simple: accumulated - bought. There is the option of taking a business loan in a bank, but this is also not a sugar deal, and in many ways resembles the presence of a private investor. Only with the bank is it even harder to negotiate.
- Do not mix business and investment. It is better to invest business revenues directly into it.
- this is only the USSR did not depend on the financial collapse in the United States
2009 It got worse. For the first time since the beginning of work, the quantity and amount of orders went down. I had to tighten the belt. The dollar grew, and the loan was necessary to give. Well, nothing, the crisis will end sooner or later - we reasoned ...
Errors :
- the global financial crisis does not end quickly
2010 Against the background of the crisis, transport companies restrained their appetites, and began to lower prices. One of the beginning TCs came to us through cold calls and offered us the same shipping cost as we had at that time with our couriers. We, of course, agreed.
Sales continued to fall. Money was getting less and less, and the loan had to be given back. After trying to negotiate with the bank and borrow money, it became clear that there was nothing to do. I had to sell “investment in real estate”. And by that time prices fell so much that the apartment was able to be sold for an amount even lower than the debt to the bank. And we found ourselves in a situation where we owe a bank money for an apartment, which is no longer there.
Although our situation has drastically deteriorated - we didn’t want to give up the case to which so much power was given.
Errors :
- it seems to me, it is better to determine in advance the time after which you promise yourself to leave the suitcase without a handle and do something else. The more time you endure, the more offensive then you quit. And time is running out.
2011-2013 . In mid-2011, the first timid growth in sales went. Compared to 2008, the sales are 2 times less, but still there is growth. And when there is growth, throw the case even more insulting.
However, the growth was about 5% per year, which is incomparable with the pre-crisis growth, and in itself is too small. The growth in the number of orders was greater, but the average order amount was greatly reduced. But already developed such a strong habit and affection to work, that it was very difficult to leave him.
2014 Sales began to fall again. Many entrepreneurs are now celebrating a fall in both trade and services. I don’t know what it is connected with - analysts, as always, have a huge number of options to choose from. But most likely the market is close to chaos - minor changes lead to serious fluctuations, and it is impossible to calculate what exactly caused the decline or growth. Besides, it is not so important. It is important that I had to gather courage into a fist and admit to myself in the failure of the enterprise. Or, at least, that expectations were not met.
Errors in the whole project :
- define in advance your expectations from the project and the timing of these expectations. For different projects they will be different, but they must be reasonable. Promise yourself that you will leave the project if it has not reached the specified level in the specified period. Better do something else faster.
- follow the new trends in the industry, and try all the time to learn new things. Plan your employment so that you have time to master the spare tool.
I wish you success and successful learning from the mistakes of others.
Source: https://habr.com/ru/post/229839/
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