Biggest Mistakes I Made in My 20’s

About this video

Dan Martell recounts his 20s, from working his only job at OAO Technologies for nine months at about $60,000 a year around 1999-2000 while working for free at a startup, to being a multimillionaire by 30 who had sold his third company. He says his first two companies were complete failures, his third, Spheric Technologies, was exited when he was 28, and he started Flowtown at 29. He lists five expensive mistakes. First, being slow to build a team: he worked as a lone developer from 17 to 24 and estimates the delay cost about $10,000,000 in opportunity cost; now he hires from day one. Second, ‘hire and ignore’: he sent a senior hire to run a major Procter & Gamble project — where P&G paid for the build while Spheric retained the intellectual property — and did not check in; four months in, P&G complained the person was embarrassing the company, a mistake he puts at about $250,000, teaching him to spot-check with weekly touchpoints. Third, being everyone’s friend with his young team, which meant no accountability; an employee’s on-site talk about drugs, a strip club and badmouthing the client was picked up by the client’s security team and almost killed the company, after which he led by example, wearing a suit and tie daily, referencing Todd Herman’s ‘The Alter Ego Effect.’ Fourth, selling too early: he sold Spheric in May 2008 (the acquirer laid off 60% of staff in the crash that fall) and believes he should have hired a CEO and kept the profitable, cash-flowing asset, estimating he lost about four times its potential value, a view shaped by Greg Crabtree’s ‘Simple Numbers.’ Fifth, investing to save: as an angel investor from age 26 he says he lost $1,000,000 backing companies he thought he could rescue, until mentor Naval Ravikant taught him to invest only in companies that will succeed regardless of his money, an approach he later applied to deals such as Pela Case, Intercom, Hootsuite, Udemy and Unbounce.

Key takeaways

• Build a team from day one: working alone from 17 to 24 cost Martell an estimated $10,000,000 in opportunity cost; even one other committed person who complements your weaknesses changes the trajectory.
• Never hire and ignore: delegate with verification — regular, even 15-minute weekly touchpoints with the hire and the customer would have caught the failing P&G project lead in near real-time instead of after four months and about $250,000.
• Do not try to be everyone’s friend as a leader: failing to hold a young team accountable for professionalism almost cost Martell his company; set the example yourself first.
• Before selling a profitable business, consider hiring a CEO and keeping the asset: Martell says selling Spheric in May 2008, rather than keeping its cash flow through the downturn, cost about four times its potential value.
• Do not angel invest to save companies: invest only in companies that will succeed whether or not you fund them, and fight to get into those deals — Martell says the ‘save them’ approach cost him $1,000,000.

Episode details: published August 17, 2020 · 16:16 long. Summary written by Self Growth Videos from the episode itself. Business results and any income figures mentioned are Dan Martell’s own claims, shared for education — they are not typical or guaranteed.

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