CEO of Sherman’s Travel Media, Jim Sherman reflects on one major shortcoming when launching his company.
Question: What mistakes have you made as an entrepreneur?
James Sherman: There are many mistakes, and I think every entrepreneur would say that they've had a lot of mistakes to manage through. And hopefully you dodge the big mistakes, and the big ones don't sink the ship, and hopefully it's just a bunch of small ones that you're able to learn from. And there's no doubt in my mind that you learn more from your mistakes than from all the things that you do right. In terms of mistakes in our case, I would say -- I think I alluded to this earlier -- I think raising a larger round would have made sense at the time. We did a round of financing in 2007, Series B, and we did have the opportunity to bump that round up. And I wish we had done it for a couple million dollars more. So -- but you know, I don't think anyone was anticipating some of the other hurdles we would face coming up. But -- so that, I think, is one mistake that I would have done things a little bit differently.
Another is, certainly in the case of our magazine we are an online business; 90 percent of our business is online. We did something very unusual in launching a print product, both because we believe it will be profitable -- it has a great opportunity to be a solid, profitable business -- but it also reinforces our overall brand and the positioning of our brand. However, if I were to do things differently, I would not have launched in the middle of 2006. I would have had us do a prototype for it rather than actual printing of the magazine. We ended up burning through some cash with actual manufacturing and production of that magazine, and I think we should have done a prototype first and then launched a little bit later. Which brings me to a general lesson, which is: think very hard about where you're investing your money, and if you can figure out ways to take smaller steps that are lest costly to prove a concept, do it. Definitely, you know, consider -- even if you have a large amount of money on hand, treat it as if you didn't have a large amount of money on hand, and see about ways in which to minimize your risk exposure and the use of cash, because if you're going to make a bad -- if you're going to take a bad turn, then it's better to lose a little bit of money on that rather than a lot.
Recorded on October 30, 2009