5 Successful Entrepreneurs Whose First Business Failed

“It doesn’t matter how many times you mess up. You only gotta be right once. Then everybody tells you how lucky you are.” Mark Cuban

I love reading articles about successful businesses — case studies on billionaires, unicorns, record IPOs, and Series funding. There is a lot to learn from such success stories, and they can be pretty inspiring.

Too often, however, we focus on only the successes and gloss over the failures. Headlines like How I Lost My Business or 3 Startup Failures I’ve Launched don’t pack the same punch or attract the same amount of views.

It’s a shame as it can paint an unrealistic picture for aspiring entrepreneurs. That success comes at the first attempt or not at all. This isn’t true, and I think it’s just as important to show the failures and how people learned from their mistakes and moved on.

So let’s look at five very successful entrepreneurs who all failed at their first business venture. As well as their second. Sometimes even their third.

Three strikes — not out

When you think of Hershey, you think of printers, right? Obviously, that’s not the case. But it could have been.

Milton Hershey started his career as an intern in a printing company but was fired and decided to try his hand at making candy.

He borrowed money from his family and launched his candy business in Philadelphia in 1876 — the time of the Great Centennial Exposition celebrating the 100th anniversary of the Declaration of Independence. He was hoping the influx of visitors would boost his candy sales.

It did not, and his business failed.

Hershey decided to improve his candy-making skills, learn more about the industry, and get a job working in someone else’s candy business. After a few years, feeling more confidant and with increased knowledge, Hershey opened his second candy business — this time in Chicago.

It also failed.

Like many others, Hershey decided to move to the Big Apple in the hope of better luck. In 1883 he started his third candy-making business in New York City. This time due to climbing sugar prices, the costs of his product became prohibitive, and Hershey couldn’t afford to keep his business running.

Three strikes.

Luckily business isn’t baseball, and there are no limits to the number of chances an entrepreneur has. Hershey was persistent and never gave up on his dream.

This time, he moved to Lancaster, Pennsylvania, and partnered with William Henry Lebkicher to start the Lancaster Caramel Company. This time it was a success, and in 1900 he sold the business for $ 1 million.

He used the proceeds of that sale to start the Hershey Chocolate Company delighting children — and dentists worldwide.

Traffic jam

Bill Gates is responsible for a lot of internet traffic, but his first business monitored traffic of a different kind.

In the early 1970’s Gates, along with Paul Allen and Paul Gilbert, founded the poorly named Traf O Data. Seriously, it sounds like a name a high school kid would make up. Which it was — the three founders were all still at high school.

At the time, when local governments in Seattle wanted to measure traffic on roads, they would lay down pneumatic road tube traffic counters. These were rubbers hoses that would count the number of vehicles that passed over them.

Gates and Allen devised a program that could process the traffic data cheaper and faster than the systems that were being used. Gilbert joined the business in order to produce a machine to capture the data.

The trio planned to sell these machines but according to Gates, “When the guy from the County that Seattle’s in came to see it, it didn’t work.”

While the hardware was a flop, Traf O Data did continue to capture data until the State of Washington offered free traffic processing services to cities, ending their business. It’s hard to compete with free.

Although the business failed, it did assist Gates and Allen with their next venture — Microsoft.

Even though Traf-O-Data wasn’t a roaring success, it was seminal in preparing us to make Microsoft’s first product a couple of years later. We taught ourselves to simulate how microprocessors work, using DEC computers, so we could develop software even before our machine was built.” Paul Allen

Jumping the shark

Mark Cuban is a serial entrepreneur with a net worth of $4.5 billion. As one of the investors on Shark Tank, he decides whether a business is a viable idea or not.

But when he was first starting his entrepreneurial journey, he wasn’t such a good judge.

His first business was a bar called Motley’s Pub — which is ironic given Cuban wasn’t even legal drinking age at the time. Unfortunately for Cuban, his bar was shut down for allowing underage patrons on the premises.

The next business he started was selling powdered milk.

Cuban reasoned that everyone drank milk, and powdered milk was far cheaper by the gallon than regular milk— offering the opportunity of significant profit margins. “I honestly thought it would make a killer business, and it lasted minutes.” he later said.

Despite these two business flops, Cuban wasn’t deterred and has since become one of the United States’ most successful entrepreneurs.

“It doesn’t matter how many times you strikeout. To be a success, you only have to be right once. One single time and you are set for life.”

From oh no to Go Pro

I recently wrote about Nick Woodman.

He failed twice — the second time so badly his company was listed on a website of companies that have failed, royally so, a shrine to Silicon Valley failures.

Woodman’s first business was a website called mempowerall.com, which resold electronic goods for a $2 markup. His second venture — Funbug, received $3.9 million in capital. Unfortunately, the money and the business were gone within 18 months.

Woodman decided to take some time out to think of his next idea. So he spent five months surfing in Australia and Indonesia, where he conceived the idea of the GoPro.

This idea made him a billionaire and, in 2014, the highest-paid CEO in the United States.

From dry goods to department store king

Persistence should have been the middle name of Rowland Hussey Macy.

Firstly — it is a better name than Hussey. And secondly, he had four failed businesses before finally succeeding.

The name Macy is now synonymous with retail, but it could have been far different. If LinkedIn were around in the 1800s, Macy’s LinkedIn profile would have read like this.

1843 Open dry good retail store in Boston, Massachusetts

1846 Founded a store offering dry retail goods in Boston, Massachusetts

1850 Dry good retail store opened in Marysville, California.

1851 Opened retail store selling dry goods in Haverhill, Massachusetts.

All four of these stores failed. But, of course, being LinkedIn, it may not have stated they failed.

With such a depressing LinkedIn bio, Macy could be forgiven for quitting retail forever. But, instead, in 1858, he moved to New York City and opened R.H Macy Dry Goods at Sixth Avenue on the corner of 14th Street. Selling — you guessed it, dry goods.

This time he found success, and Macy’s quickly expanded, taking up more real estate and opening new departments. Perhaps it was finally offering products other than dry goods, or maybe it was just building on past learnings, but persistence paid off for Macy.

And his name will live forever in retail history.

I did find one interesting non-business fact when researching Macy, which I wanted to share.

Macy and his wife both died on the Titanic. He refused to get in a lifeboat before women and children, and his wife refused to leave without her husband. She reportedly said, “I will not be separated from my husband. As we have lived, so will we die, together.”

Hershey’s. Microsoft. Macy’s. Iconic businesses that may never have eventuated if their founders had quit after their first failed business.

It provides hope and inspiration for anyone who has tried and failed to try once more. So often, the groundwork for success lies in previous failures.

My first two attempts at a startup failed, and it took 15 years for me to launch a successful startup. The key is to learn from them and keep going.

And then you may become the next Bill Gates.

Picture Credit- Photo by David Suarez on Unsplash