Learning from Failure
Epic Fails as Learning Experiences
I would never wish failure on anyone but the Prayer of Thanksgiving we read at my Tuesday morning mens’ group yesterday included this line:
“We thank you also for those disappointments and failures that lead us to acknowledge our dependence on you alone.”
Then I read this WSJ article on the demise of Pets.com and thought that while we learn best from our own failures, it is far less painful to learn from the failures of others.
If you don’t remember Pets.com and their sock puppet, here is quick YouTube on the history of their rise and fall. The rise from a simple idea in 1998 to $185mil value during its February 2000 IPO to shutting down as a worthless company just 10 months later in November of 2000 was a truly spectacular failure.
So what can the poster child of the .com boom and bust of the year 2000 teach us about being a dental entrepreneur:
Do you know what your patients want? Pets.com was one of the many companies in the late 1990s that went public based on not much more than an idea and dream of striking it rich. They failed to do any market research to determine if people really wanted to use their dial-up modem to connect to the internet and order pet supplies that they could just as easily get at the grocery store. While dental health is not dog food, it is important to understand if the majority of your patients are looking for a holistic health solution or just want a specific tooth pain to go away.
Are you in a crowded marketplace? Pets.com was in an incredibly crowded market with Petopia.com, PetStore.com, AllPets.com, Petco.com, PetWarehouse.com, PetPlanet.com and Petsmart.com. The Pets.com marketing, including their 2000 Super Bowl ad, promoted pet supply delivery brilliantly but did a poor job of promoting Pets.com as the solution. As a dental practice, ensure that your marketing focuses on your specific message and why your practice is the only place a new patient will be satisfied.
Do you know your costs? Pets.com purchased $46mil in pet supply inventory and sold that inventory for only $32mil. So before any marketing or administrative costs, they lost $18mil by not understanding the cost structure of the pet supply business. Additionally, they offered flat rate shipping of $4.95 to the customer, but often paid triple that to ship dog food across the country. In your practice, there are lots of costs (big and small) so it is important that you understand the costs you need to cover on a daily basis to be profitable.
Is the market ready for your idea? In the early days of the internet when Amazon was struggling just to sell books online, shoppers were just not ready to order dog food online. Fast forward to 2024 and Chewy is essentially Pets.com but generating almost $300mil in quarterly profit.
The likelihood of complete practice failure is very low, but you can still learn from the epic failure of Pets.com and be aware of potential small failures in your practice to avoid the big one.
Since each practice is different, please schedule a consultation with JNG Advisors today to see what business plans and costs structures would work best for your practice.