From The $100 Startup · Part III, Chapter 14

But What If I Fail?

"Your time is limited, so don't waste it living someone else's life."
— Steve Jobs

John T. Unger's three best things

Almost everyone in the book has a failure-to-success story. Most are about a launch that flopped, a partnership gone wrong, or motivation lost on the wrong project. "I tried something and it didn't work out — but then I moved on to something else." The most compelling rise-from-the-ashes story I heard was John T. Unger's, a sculpture artist from a small town in Michigan.

As John tells it, the third-best thing that ever happened to him was having the roof of his studio collapse out from under him while he was standing on it shoveling snow. The building was destroyed. He spent the rest of that Michigan winter alternating between shivering and trying to warm himself with an illegal unvented kerosene heater. It was a nightmare. Then the bank came out to assess the damage and gave him a $10,000 commission. He used it as a down payment on two buildings he'd been trying to buy for a while. "I don't think the bank would have gone for the deal without the disaster. It forced them to take a real look at my business, instead of thinking of me as another broke artist."

The second-best thing was losing his last day job as a graphic designer in the dot-com crash. That loss took everything else with it — his income, his girlfriend, his apartment, and even a piece of his thumb in an accident he had while moving out. His friends told him to suck it up and find work somewhere, anywhere. In rural Michigan at the time, there wasn't much work to find. So he stayed with the art business.

After the studio and the day-job losses, John was depressed and thought hard about packing it in.

The best thing that ever happened to him, as he tells it, was a late-night disagreement with a cab driver, who pulled him into the back room of a diner and held a gun to his head for ten minutes, screaming and threatening to pull the trigger. John finally escaped and walked out into another cold Michigan night, sweating, glad to be alive.

"I get it!" he yelled at the sky as he hobbled away. "I'm just so lucky!"

"You don't really worry about the small things after that," he says now. "Everything takes on a whole other level of meaning."

Unwanted advice and unneeded permission

Much of this book contains advice. Don't confuse advice for permission. You don't need permission to pursue a dream. If you've been waiting to begin your own $100 startup (or anything else), stop waiting and begin.

Charlie Pabst, the Seattle designer who left corporate life to go it alone, said the best thing he did was learn to ignore advice, even from friends who meant well. "My business and the life I lead now would never have happened had I not been obnoxiously stubborn to my own will. The fact is that the majority of people don't own their own businesses. And a certain percentage of that majority will not be happy or supportive about your exiting the 9-to-5 world."

Chelly Vitry, who built the Denver food-tours business, framed it this way:

The biggest lesson I learned was to trust my own judgment. When I started my tour business, I got all sorts of advice from people around me, ranging from why it wouldn't work at all to how things should be run on a day-to-day basis. I had researched it and knew it was a viable idea, so I decided to keep my own counsel and quit asking people what they thought. People who know less about the business than me do not get to make decisions about it. I value input, but now I seek it out from people who have unique perspectives about how I can improve.

Sometimes the best advice is none at all. If you know what you need to do, do it.

What successful founders actually worry about

I asked nearly every founder profiled in the book the same question: what worries you? These were all people earning $50,000+ from their business (many much more). What kept them up at night?

Their answers split into two categories — external and internal.

External worries

Market shifts. Businesses built on Google rankings or App Store placements (one founder called it being "favored by the gods of Apple") can lose it all when fortunes change. Scott McMurren, who built the Alaska coupon books in Chapter 7, was closely watching the rise of online coupons and thinking about how to make TourSaver more digital-friendly.

Competition. Several founders said they didn't worry — they found it more productive to keep moving forward with original work. Others worried about being knocked off by a more established company. Marianne Cascone, who makes children's clothing with her cousin: "Our biggest fear is that our products will be 'knocked off' and our prices will be undercut. We are covered by patents and trademarks, but it still happens from time to time. I am a firm believer that if I focus 100% on creating a quality product, we will rise to the top every time."

Cash flow with employees. If you owe people a fixed amount on a fixed schedule, you can't easily tighten up when business tightens. One business produced over $2 million in annual revenue but earned only $60,000 in net income for the owner — most of it eaten by overhead.

Internal worries

"Faking it." Alyson Stanfield, in Colorado: "My biggest fear is that my consulting and writing becomes mediocre." Lee Williams-Demming, in Costa Rica: "Success seems to be the ability to keep going, to keep the doors open."

Identity. "I love my work — but what if I love only the work? Or what if the thing I love is no longer fun because now it's all work?" Statements like these were usually followed by a clarifying counterweight: "Starting this business, no matter the eventual outcome, has been worth the energy, effort and sacrifices it has taken thus far."

One Canadian manufacturer cut through everything: "I used to be afraid to fail. I wanted concrete numbers telling me we weren't going to lose before I took the leap. But if nobody was going to die, even in the absolute worst case scenario, then what the hell was I so afraid of? I've never looked back."

The moments they knew

I learned to ask founders if the decision to start the business had been worth it. Most said yes — and almost every yes had a story behind it. A particular day, event, or moment when they knew the business was going to work.

The lesson: when you have these moments, hold on to them. They provide encouragement and positive reinforcement when times are hard.

The $100 recap

Before we close, the key lessons of the book in one list.

• The quest for personal freedom lies in the pursuit of value for others. Always ask: "How can I help people more?"
• Borrowing money is now optional. Many founders start for $100 or less.
• Focus on convergence. The overlap between what you love and what other people will pay for. Lead with benefits, not features.
• Use skill transformation. You're probably good at more than one thing.
• Give them the fish. Find out what people want, and find a way to give it to them.
• There is no consulting school. Pick something specific, set up shop, charge for it.
• Action beats planning. Use the one-page business plan to get underway without waiting.
• Craft an offer, hustle, and produce a launch. All three beat "release and hope."
• The first $1.26 is the hardest. Find a way to get your first sale as quickly as possible.
• Franchise yourself. Through partnerships, outsourcing, or a related second business, you can be in more than one place at once.
• Decide for yourself what kind of business you want to build. Stay small, go medium, build for sale — your call. Just decide.
• The first sale is the hardest. The skill compounds. The audience grows. Most of the work gets easier from there.

Where they are now

The Jamestown Coffee Shop in Lexington, South Carolina took a while to find its footing — a community not familiar with specialty coffee, growing one customer at a time. A man stopped in with a coupon from a local golf tournament, said it was the best cup of coffee he'd ever had, and came back the next day. A morning group of regulars formed — a lawyer, a clergyman, an IT guy, a mechanic. James Kirk thought back to all the well-meaning friends who'd told him you can't start a business during a recession, you can't move across the country without a job. Every time, he'd added it to his "non-planning" folder.

Jen and Omar's map company expanded to wholesale accounts and was recently featured in an Expedia commercial. Karol and Adam ran two more mega-sales, each producing a six-figure payday for themselves and their affiliates. Brandon Pearce's family was planning a move to Malaysia; Music Teacher's Helper was bringing in more than $50,000 a month. Benny Lewis was language-hacking his way through Istanbul. Mondo Beyondo had served more than 5,000 participants and produced $500,000 in revenue for Andrea and Jen. Brett Kelly's $120,000 ebook had become a $160,000 ebook.

Emily Cavalier, who'd left a high-paying Manhattan job to start Mouth of the Border, was asked how often she still felt motivated to go it alone. Her answer: "Every single day. The greatest benefit has been going to bed just as excited, if not more excited, than when I woke up."

Coda: Rhett the tuk-tuk driver

The story about freedom and value doesn't end in the Western world. In Phnom Penh, Cambodia, I met a tuk-tuk driver named Rhett. Most tuk-tuk drivers in Cambodia make $2–$5 a day. Rhett earns up to $50.

The difference is hard work plus careful strategy. The hard work: not sleeping or gambling the afternoon away as many of his colleagues do. The strategy: serving regular clients instead of constantly roaming for one-time fares. He handed me his phone number and told me to call him day or night.

Once his core model was established — serving regulars — he created multiple streams of income by adding a sign for a popular bakery on the back of his tuk-tuk. The bakery pays him monthly plus commission on any business he brings in. He regularly asks customers for referrals and testimonials. If a customer needs to get somewhere outside Phnom Penh, Rhett finds them an honest taxi or bus driver and follows up after the trip to confirm all went well.

He does this with limited English ("I practice every day, but my tongue becomes tired") and no formal education. Some of his extra money goes into a savings fund. His daughter is now in university — the first of her family to finish high school.

The principles in this book apply at every scale and in every part of the world. As you work to improve your own circumstances, consider how the same principles might apply to people whose starting point is much further away than yours. I invest at least 10% of all revenue (including the royalties on this book) with organizations that improve lives in places I never could on my own. It's not charity — it's a natural response to the fact that I've been more fortunate than others.

Key takeaways

• Advice is not permission. You don't need permission. Stop waiting.
• The biggest battle is internal. Fear and inertia beat competition and market forces as obstacles to most startups. The good news: those obstacles are in your control.
• When you have a "moment you knew" story, hold on to it. Those moments will carry you through the hard parts later.
• The most important lesson: Don't waste your time living someone else's life.

Where this fits in the book

"But What If I Fail?" is the closing chapter of The $100 Startup, followed by the Coda. The whole arc — from Renaissance through the practical mechanics of Part II to the long-term questions of Part III — ends with the simple recognition that the only thing in the way is your own decision to begin.

Frequently asked questions

What if my microbusiness fails?

You'll probably have at least one false start. Almost every founder in the study has a failure-to-success story. The honest reframe one founder gave me: "If nobody was going to die, even in the absolute worst case, what the hell was I so afraid of?" Failure is overrated.

What do successful entrepreneurs actually worry about?

External: market shifts, competition, cash-flow pressure if you have employees. Internal: faking it, identity ("what if I love only the work?"). The fears are real. They're also not reasons to stop.

What's the moment when founders "know" the business is going to work?

Almost always small, almost always early. The first check. The first call from a corporate client. The email at an Italian hotel saying a bride had paid for the biggest package. Hold on to those moments — they carry you through the harder times that come later.

Should I take advice from people about starting a business?

Selectively. Charlie Pabst said his current life would never have happened if he hadn't been "obnoxiously stubborn." Chelly Vitry's rule: "People who know less about the business than me do not get to make decisions about it." Don't confuse advice for permission. You don't need permission.

Where does this fit in The $100 Startup?

Chapter 14, the closing chapter. Opens with John T. Unger's three best things (a collapsed roof, a lost job, a gun to the head), contains the "moments they knew" from several founders, includes the full book recap, and closes with the Coda about Rhett the tuk-tuk driver in Phnom Penh.