We all have decisions we’d go back and fix if we could. I’ve got plenty. But in 2008 I made the worst business call of my life, and it had nothing to do with the financial crash.
Some choices barely leave a dent. Others knock your entire life onto a different track. This one did.
I don’t think it “wasn’t supposed to happen.” It just should have gone differently, and I wish I’d handled myself better. You’ll see why.
A little background first.
My dad was seventeen when my grandfather died. They lived in a small house next to the Reno airport. My grandfather built a “bedroom” onto the side of the house for my dad and his brother. It was basically plywood, two by fours, and wishes. No insulation. My dad says in the winter their breath froze onto the walls.
Money was always tight. Food was never abundant. But they had what they had, and my grandparents made it work.
A few months before he died of leukemia, my grandfather was still doing standing backflips in the yard with his kids. That was the kind of man he was.
When he passed, whatever money they had was gone. My dad grew up overnight. Being the oldest meant he didn’t get a choice about it.
He carved out a different path. Hard work. The military. The University of Utah in the 60s where he learned computer programming and met my mom.
We didn’t grow up wealthy, but he provided for us every single day of his life.
With that history sitting behind me, I grew up wanting to build on the foundation he’d laid. For me that meant entrepreneurship.
My first business was in high school. Printed t shirts for school clubs. Not exactly a gold mine, but I learned a lot.
I didn’t have a mentor until I was in my thirties. By then I had already founded, co founded, acquired, and run more businesses than I could count. And nothing teaches faster than getting hit in the mouth by real problems. Some of the things you learn in business classes vanish the moment they meet the real world.
But back to the mistake.
I had just finished an interim CEO role at a nutraceutical company and was hunting for my next thing. I was obsessed with hyper growth companies and convinced I could build one.
In 2008 I came across a sales model that didn’t make sense to me at first.
I’d been invited to help a fast growing marketing company in American Fork hire a CTO. Their model looked normal on the surface. Affiliate traffic. Optimized landing pages. Basic stuff.
Except it wasn’t basic. One of their clients was pushing thirty five thousand sales a day across four offers. They were grossing seven hundred and fifty thousand dollars by ten in the morning, every single day, and the company was under three years old.
It grabbed me. I’d studied Product Market Fit, but this was the first time I’d seen one company with four separate offers all hitting PMF at the same time.
The Turning Point to Doom
Like every ambitious early thirties entrepreneur trying to retire young, I decided to build my own version.
I brought on a partner already in the space and we started generating leads for other companies. I tried a bunch of digital product ideas. Messy starts. Messy stops.
Eventually we found one that looked promising and turned on sales.
In three days we passed fifty thousand dollars and had to stop everything to sort out merchant accounts.
This is where I learned what “scale” really means. I thought this was a marketing and fulfillment game. It wasn’t. It was a banking and credit card processing game with a marketing wrapper.
Once you get the engine running, it all comes down to those two things. Everything else is secondary.
I brought in a friend and we went credit card processing shopping. Within weeks we secured enough capacity to process over a million dollars a month. And that’s where I made the dumbest decision of my career. I raised capital in a volatile environment.
I didn’t know it was volatile. I should have. But I’d never seen growth like this. I thought I had everything lined up. I didn’t.
Most of us live without realizing what we don’t know. Usually that ignorance only slows us down. Sometimes it destroys us.
I raised money to pay for traffic.
Here’s how the model actually works:
You run traffic for seven days. You get an invoice with NET 7 terms. Your product has a seven day trial. Add the three to five day settlement period for the merchant processor and you’re ten to fourteen days out before you see your first dollar.
To bridge that gap at scale, companies use investors, lines of credit, or factoring. It’s normal.
Our gap hit two hundred thousand dollars per week on one to one point three million in monthly sales.
In nine months we went from running leads to exceeding a thousand sales per day, pulling in over a hundred and fifty thousand dollars a day in revenue.
I thought I’d finally cracked the code.
I hadn’t.
When you can’t see around corners, life handles the education for you.
New Year’s Eve 2009 at 8:38 pm I got a call from one of our merchant banks. We had lost our merchant accounts. Not just us. Everyone running affiliate offers lost theirs that night.
In a single moment I lost six hundred eighty three thousand dollars. And that was only the beginning.
We couldn’t deliver what we sold. We had to refund everything. The merchant bank kept those refunds to cover their own risk. We issued paper refunds. By the time everything settled, we had lost or returned over two million dollars.
By February 22, 2010 six weeks later we were out of business. I was broke. Everything I’d built was gone.
The hit came fast and hard. I curled up and disappeared for a bit. I was numb.
My entire world collapsed in front of me.
When you’re winning, everyone calls it a shared success. When it collapses, it’s yours alone.
That’s when you find out who your actual friends are.
My biggest mistake wasn’t the raise. Or the growth. Or the timing. It was not having someone who had already walked this road. Someone who could see the danger before I stepped into it. Someone who could say, “Stop, you’re missing something.”
I didn’t have that.
Since then I’ve made it my goal to be that person for others. To help them see the corners they can’t see yet.
Unless you’ve lived through a collapse like this, you can’t understand the fear, the loss, the shame, or the weight of not being able to meet every obligation.
Companies come and go.
Someday I still hope to finish cleaning up that mess with the people who trusted me.
A successful entrepreneur is someone who can afford to clean up their past mistakes.
Most collapses don’t come from bad ideas. They come from blind spots you never saw until it was too late. My work now is helping leaders see those corners before they cost them what they cost me.