DrinkSpot Founder lays bare the hard side of entrepreneurship
Many entrepreneurs shy away from revealing their failures, even if those failures proved to their stepping stones to success. Founder of DrinkSpot, Nick Crang, on the other hand, candidly shares why he was left with a burning hole in his pocket and what he learned from the frustrating experiences he was faced with throughout his startup journey.
Crang says, “a true entrepreneur is never put off by failures”. More often than not, particularly in the early days of founding his startup DrinkSpot, he was left facing the consequences of his mistakes.
He launched DrinkSpot – an online handy-book of licensed venues across Australia – in November 2012, after two years in the development phase. Aside from wanting to earn passive income, he was motivated by the simple fact that “there’s just too much crap on the internet”.
“There’s a lot of information on the Internet but none of it helps you expedite trying to find a licensed venue quickly and easily. It’s difficult going back and forth across multiple websites, even if you eventually do get the information you need,” says Crang.
“But the whole premise of what I designed was to be able to do that within a couple of clicks – to be able to get good up to date information quickly and easily.”
If you’re searching for a licensed venue in a particular region – nightclubs, cars, clubs, cocktail lounges, wine bars, absinthe bars, and even restaurants – DrinkSpot is your go-to site.
Venues that want to advertise themselves on the site pays a small annual fee of $250. While venues can list themselves on the site for free, the options for them are severely restricted.
“I wanted to remove the barriers to entry, so the risk of not subscribing is worse than subscribing. And I=in Queensland alone, there are over 7000 licensed venues – so there was a substantial market there for me to tap into for advertising opportunities,” says Crang.
It was all well and good – DrinkSpot was addressing a need, there was a large market for it, and a promising business model behind it – but the process of development didn’t quite go to plan.
Instead of the three-month timeframe that was forecasted from day one of development to launch, the site took two years to build. As a perfectionist, he was constantly delaying the launch until the site was perfect in his eyes – both in appearance and functionality. And the longer it took to build, the more he had to spend.
“I had a vivid concept of what the site should be in my mind. Design was important, simplicity was important. I sketched everything out as best as I could and then sat down with web developers and stressed the attributes that couldn’t be compromised – like being easy to use, quick access to information, clean layout, no advertising clutter,” says Crang.
Once Crang approved the design, the web developers started incrementally building the site.
“It was a huge challenge trying to keep on track with time; and it’s really easy to lose motivation when you’ve been developing something for so long. You’ve put so much time, effort and money into it, and you’re getting no reward,” says Crang.
“You really have to have conviction with what you’re doing because it’s just massively labour intensive and you don’t see the fruits of your labour for quite a while. Frankly, I think anyone who says they’ve been making money from the get go is completely full of shit.”
Delays also meant that Crang was spending significantly over his budget, and at a time when he could least afford it. Before embarking on the venture, Crang had walked away from a high paying job – trading stock indexes and foreign currency – to go back to university.
“It came to a point where I was unhappy at the job because it was a high stress environment. I had vowed to myself years before that I wouldn’t do something that I was unhappy doing just for the money and I found myself exactly in that trap. So I had to walk away from that, and I went back to university to study a subject I was more passionate about,” says Crang.
The idea behind DrinkSpot emerged when Crang was pursuing a business degree majoring in property economics at Sunshine Coast University; and as a student, it became “insanely” difficult to keep investing large sums of money when he wasn’t earning any.
“I was basically bankrolling off personal credit, and whatever savings I had left . It really made me question what I was doing,” says Crang.
“After I launched, I tried to recoup a lot of that cost by seeking investment. I was successful at doing so, as I sold of 25 percent of the site to a private equity investor. That made the whole development well and truly worth my while.
I was able to make more money than I lost, so I’m definitely in the green zone now – where before the whole process was nothing but a burning whole in my pocket.”
Crang’s initial plan was to generate passive income so he could leverage that into other projects; and now with an investor on board, he is open and receptive to the idea of selling the business.
Reflecting back, Crang says that his biggest mistake was identifying and focusing on the important elements of the product.
“I had a temptation of always wanting to improve my product so much so that my product was never really ready in my eyes for the market,” says Crang.
“Whereas you need to ability to say, ‘this is the core product, let’s get it out there’. You need to launch your product into market and start building revenue; and you can refine the product at a later stage. I see that now, whereas before I couldn’t and the only real way for me to learn was to make that mistake.”
His other advice to budding entrepreneurs is to pick something around their existing skill-sets that they have a passion for.
“Unless you’re enjoying what you’re doing, sticking to it will be very hard,” says Crang.
He adds the importance of having longevity in the startup phase, which means being well resourced.
“If you pick something that is beyond the scope of your funding capacity, of your knowledge and expertise, then you’re going to be struggling a lot. You need to be able to bring in additional funding or additional knowledge,” says Crang.
“I would say to anyone who’s in a similar meagrely funded situation to just to find a way. There are ways out there; you can get it done. The worst thing you can do is not even try.”
He believes many people stop trying because they don’t want to fail.
“I think people are afraid of failing because of what other people will perceive their failure to be, or because they overestimate the ramifications of the failure,” says Crang.
“For me, it’s just a risk-reward ratio; and the risk of me not pursuing my ideas is far worse than if I was to try and completely blow it. I don’t want to regret not trying.”
Has he ever been put off by the risks that come with pursuing a career in entrepreneurship? Not a single moment was spent thinking about switching careers.
“I think entrepreneurship is an inherent personality trait. I like the challenges that have been thrown at me; and despite the fact that I found it very hard, I can’t turn off my entrepreneurial way of thinking. I’m already pursuing other ideas, and I know I’ll do it better after experiencing those challenges,” says Crang.
Take a tour of DrinkSpot via www.drinkspot.com.au.