Technology Destroyed My Company

A few weeks ago I wrote about the human tendency to be excessively seduced by technology. To the point where our brain flies out the window. Click here if you have yet to read it.

This is a really sour spot for me. You see, years ago, technology destroyed my company. I will explain. At the end of my college days, I had an automotive tuner shop, which I was building with a couple partners, and things were looking pretty promising.

In Orange County, California, lots of people like to drive fast cars. So, the market was there. Unfortunately, the company ultimately failed. And, the main reason for the failure was one word; technology.

I had one partner who was the main financial backer. And, without being too rude, this individual had delusions of grandeur. He thought he was he smartest guy around.

In an attempt to create an electronic network of distributors, he purchased Oracle software. If you are not aware, Oracle is not like Quickbooks or whatever. In addition to purchasing the product, we also had to employ a team of 4-5 engineers just to implement the software.

All told, that decision ended up costing north of a million dollars. Worse yet, it never really worked! But, the dream of a seamless electronic network was too much for my partner to resist. In simple terms, he was seduced by technology.

The other enormous financial mistake my partner made was he purchased these things called dynamometers. A "dyno" is a device used to tune cars. An excessive and unnecessary device, to be sure.

Total cost for the dyno mistake (again) more than a million dollars. In fact, when we sold our building, we sold it to a friend who owns a body shop. And, to this day, a million dollars worth of technology lays in the ground, unused.

Businesses usually fail when they run out of money. And, by throwing away more than two million dollars, we were led to a situation where we could no longer meet payroll.

As you might imagine, this was a very painful experience. Like all budding entrepreneurs, I had been very optimistic about the future. To have those dreams shattered was an enormously difficult pill to swallow.

The failure of that company taught me two extremely important lessons. First, as the title of this post says, technology can flat destroy a company. And, it can do it quite easily.

Humans are excessively seduced by technology, and this problem happens more often than we care to admit. To this day, I am very circumspect of any, and all, money spent on technology.

The other big lesson is how being an entrepreneur is synonymous with being a salesperson. Meaning, sales is the lifeblood of a business. If you do not make enough sales, you go out of business.

My formal education was in chemistry. And, unfortunately, my little 21-year-old pea-brain thought the following, "If I can get a degree in chemistry, from the #1 chemistry school in the world, figuring out business will be easy." Ouch! For years it was hard to admit those words.

These sorts of experiences are the reason I spend so much time harping on the importance of sales and selling. If you want to succeed, as an entrepreneur, you need to be a salesperson. And, it ain't easy!

Thus, in a sense, I share in the blame. Had I gotten the company to sell enough, we might still be in business. That said, a two million dollar hole was virtually impossible to overcome.

Had we not wasted so much money, we might have been able to buy the time to figure out a successful sales and marketing strategy. I think we could have bootstrapped our way to success.

All-in-all, as it stands, technology destroyed my company 😞