The Business Failed. The Lesson Didn’t.
Every time I get a notification that I’m out of storage space on iCloud, I cringe a little.
Not because of the $2.99 monthly fee—but because, 20 years ago, I had a backup company of my own.
We were early. Too early. And definitely not ready.
Back in the early aughts, I had a little IT consulting business. In those days we handled a mix of personal and professional accounts so on any given day it could be a mix of installing home wifi routers, setting up new user laptops for a small business, or walking around and installing printer drivers for hundreds of desktops in a larger company.
It didn’t take long for me to get fed up with the way I was charging and how every penny we made was based on time spent. We didn’t mark up the products we installed and we didn’t carry any inventory because we couldn’t afford it.
One day, and I have no idea where the idea came from, but I had the idea that we should start a business of backing up people’s data online. There was almost zero competition back then. Apple had a product called Time Machine but it sucked and no one could figure out how to back-up or restore lost files. Windows had nothing.
Anyway, I found an investor (friend with a credit card) and we bought some NAS (network attached storage) devices, licensed a white label backup client and server-side app, and rented some space at the local data center in downtown Nashville.
Thus, AOI Data Hosting was born. We sold to all our IT clients, found some fast food franchises that needed backups done, and we were making a little money - it was also my first attempt at generating recurring revenue which felt great!
After all this nerdiness, you might be wondering if there’s a point.
The point is that this business was built from a genuine customer need. Everyday we saw people losing files and having to rewrite large documents because they’d forgotten to manually backup to a floppy or a zip disk.
Remember, this is before AWS, Google Drive, or iCloud. There were a couple of shitty hardware options, but almost nothing online and nothing automated.
The problem: we had no idea how to sell this thing. The only network we knew to sell to was our existing client base and that dried up fairly fast. So we had a tiny growth spurt in the beginning and then sales leveled off quickly.
A few months into this new venture, my biggest client offered me the job of IT Director for the small startup we’d been servicing for the last 2 years. It was good money and came in the form of a consistent paycheck and benefits which isn’t what I had with my little consultancy.
I took the job. It was the right move for me at the time because it allowed my wife and me to buy a house, and I didn’t spend all day-every day worrying about my measly little checking account.
But it wasn’t a great move for AOI Data Hosting. I was no longer taking clients which was the only real funnel for new backup sales we had. And eventually, new online backup products started entering the market.
I was also busy with my new gig which meant that any customer service issues for existing backup clients had to be handled in the off-hours.
Not surprisingly, the business died slowly.
These days, every time I get a notification that I’m out of storage space for my photos or music or documents I cringe thinking that I had been on the forefront of this business and I dropped the ball.
iCloud storage was officially launched in 2011. It’s estimated that Apple earns around $4.7B with it’s iCould service. Now, I’m not saying we could’ve competed with them when they finally launched that product, but it does prove that there was huge demand in the market.
Look, I can think of several reasons that business didn’t work long term. My partners and I weren’t very aligned, I clearly wasn’t committed to staying broke until we made it, and unfortunately new sales would’ve mostly depended on me alone. The name and branding sucked, and I knew nothing about outbound sales or marketing or strategic partnerships back then.
Hell, there were probably 100 other file backup services that went the way of the Dodo, and for similar reasons.
But I love that we launched that business. Even though I missed out on a (potentially) giant payday, I would make the exact same moves again if I was in the same position.
Why? Because the lessons I get from failed ventures serve me exponentially longer than my successes. This might be hard for you to wrap your head around. Especially if you’re not in business for yourself.
But all those reasons we likely failed that I mentioned above? You can be sure that I’m much more adept in those areas than I used to be. Or at least I know how to hire for my areas of weakness.
When you’re in the midst of failure, it can feel like life is over and you’ll never come back from that point. Your mind will give you, what feels like, very real and logical reasons why you should hang it up and go get a job where someone tells you what to do and when to do it.
It’s a lie. Your mind is lying to you and I know that because my mind has lied to me more times than I could ever count. Fear, embarrassment, lost confidence - these feelings will almost certainly show up if you “fail” at some business objective.
Let them show up. And then realize that while those emotions are real, they are impermanent. They will 100% pass and you will go back to feeling like yourself. And when you do, you will be armed with a whole new understanding and lessons that you can apply in your next endeavor.
This is not my only business failure.
And (dare I say) I hope it’s not my last.
Everytime a business of mine explodes, I get a little bit better.
And I’m starting to realize that’s the whole point of this life.