My parents invested in a company who had the Australia distribution rights to Polygiene in 2008. Their co investors were two other high profile Australians who were very successful but had no startup experience. Over the proceeding year things were not going well because while the other investors were successful they didn’t have much experience in any of the areas required to make the business a success. Because of my experience with startups and the infrastructure I already had in place, I offered to take over the administration and running of the day to day business in the hopes that I could stop the downward decline. Over the proceeding months things got better but one of the investors still pushed to be updated very regularly and manage many of the day to day decisions, which created a significant amount of administration and conflict with the core goals and plans of the business.
In an effort to quell the need to manage day to day decisions and reduce conflict with the business plans, we decided to have regular investor meetings to allow them to plan out many of the small decisions and to explain why things should be done a certain way. No matter what was tried, the conflict and micro management continued, even in the face of comprehensive planning and business reporting. Despite this, the product was selling and opportunities and business relationships were blossoming.
12 months after I took over management of the business, the conflict and micro management continued and relations between the investors had become untenable. The investors decided that the business could not continue the way it was and the business liquidated.
It was sad to see a business that could have been extremely successful, fail. Up until that point, I had seen businesses fail for many reasons but I had not experienced one fail because the investors were not aware of their own shortcomings and therefore couldn’t get along.
In saying the above, it was a great experience and one that taught me many lessons. After the failure, Jason and myself worked hard to make sure that everyone we worked with in the future understood the importance of culture and working together, upfront.