It is almost a cliche that every entrepreneur has to often go through tough times. Irrespective of how much money s\he started with, the entrepreneur is always short of money, often running just on fumes and the business is often on the verge of going belly up. Today, I wanted to write about one such moment in my journey as an entrepreneur and in the life of Mishmi Takin as a company.
Since I was short of money to begin with, I decided to go the crowdfunding route to raise the money to bring our products to market. Team Mishmi Takin conducted a successful Kickstarter + Indiegogo crowdfunding campaign in Summer of 2016 and raised $80,000. However, I made a critical mistake in our crowdfunding campaign; I had offered far too many products to our backers. As a result, at the end of the campaign, we found that even though we had raised a healthy total, we were obligated to produce too many products and we did not have enough money to produce all of them. This was a potentially business ending mistake.
But, both me and my wife were not ready to throw in the towel and we bravely soldiered on. Both of us maxed out all our credit cards, wiped out our retirement accounts and took as much personal loans as we could get from anywhere. A couple of family and friends also pitched in and over a period of 6 months, we somehow managed to pool together the money to pay for the production costs. We got the production done; but, there was the small matter of customs duties. We still needed to pay the customs duties and there was no where else left to turn to. On the very last day when the customs duty just had to be paid, we were saved by a kind friend who could not say no even though she wanted to.
We got the product, yay, but now it had to be shipped to all the backers and the cost of shipping turned out to be a killer. I had saved a credit card just to cover shipping costs but it maxed out in no time. I had no money left even to ship!! I was forced to wait for sales to happen on our website to get some money to ship.
Matters came to a head in middle of July, 2017. My wife doesn’t get salary over the summer. From May to July, we watched as the cash from her last salary payment gradually inched towards zero. I think it was July 17th, 2017. I made a loan payment from my personal account and realized that my balance was now less than $1. My wife’s bank account had already dropped to less than $1 and our business account too was below $1. Earlier in the day, Citibank had called and suspended my last functioning credit card because I was late in making my payment. Essentially, we were completely out of cash and had no credit left.
As this realization was dawning on me, my wife called from the kitchen to say that we were out of milk for our 3 year old daughter. As I sat contemplating the zero balances, she came over, saw my face and realized what was going on. She gave a short laugh and said, ‘I guess it is what it is’ and went back to her work.
The next day, my 3 year old daughter, who obviously did not know anything, kept asking for milk. So, I had to go around house, rummaging through things hoping to find some loose change. Eventually, I found $7 in loose change. I got my daughter the milk and we managed the next 4 days on the loose change. Finally, on Saturday, July 22nd, we got our next payment from Amazon and we breathed a sigh of relief.
We eventually got through the summer, shipped to all our backers and fulfilled all our obligations (except to the kind friend mentioned above). Mishmi Takin has come a long way since then, winning awards and great appreciation from our customers. We still are not completely out of the woods. But, I learnt my lesson – to bite what I can chew and not to take obligations I can not fulfill. I also learnt that some things you can read about but you don’t really understand till you go through them. Some victories just have to be ground out. Finally, I learned that the things you buy when you don’t have money taste much sweeter than the same thing bought when you have lot more money.
To all budding and fellow entrepreneurs, carry on.
P:S – If you have stories of how you faced adversity, do write back. I would love to hear them.