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2022 was wild. When I think back to this time last year, it feels like a lifetime and an entire economic cycle has passed. In December 2021, the economy was roaring, investments soared and revenue forecasts for 2022 were ambitious.
But at the end of this year, like many of you, I am taking stock of a year that ends very differently than it began. And because I’m running a start-up business, I’m thinking about year-end earnings. But I also think about how I measure success at the end of a very turbulent year and what it means to build a company for long-term growth and sustainability.
It’s an age-old practice to assess annual performance, dissect challenges and analyze lessons learned to inform growth areas for the year ahead. But at the end of 2022, it’s especially important to reflect on what success looks like. Is the short-term revenue at the expense of everything else? Or are there other ways to think about and measure success? 2022 has taught me a few lessons on this front, and I’d like to share three of them and challenge other entrepreneurs to reflect on their measures of success.
Related: The ukbusinessupdates.com’s Guide to Building a Successful Business
Lesson 1: Celebrate the wins
This year has been a rollercoaster for my business and I’ve heard the same from many other entrepreneurs. And while it’s easy to recognize the “downs” and be shaken by those disappointments, being on a rollercoaster also means there were “ups”. It’s critical to look for that when measuring your success so that you’re also looking for places in your business to double down and reinvest.
I entered 2022 with high expectations. By traditional measures of success, we had closed 2021 on a high: revenues for our first full year were up more than 400%, and it felt like we were going to hit that elusive hockey stick growth and never look back. We signed partnerships with major organizations and government agencies.
My co-founder and I also decided to sell stocks to raise capital to fund our continued growth. The exposure we gained through using a crowdfunding platform caught the attention of Daymond John and led him to recommend our company to his Angels + Entrepreneurs Network in March. We closed the investment round on April 30, just short of our target. Another great win in all respects!
With the funding in place, we are beginning to invest in three key areas: building technology, paying our team who have worked for little or no salary since launch, and expanding our e-commerce training program, HER-Commerce™ .
All the while, we gained visibility, increased our e-commerce sales, and attracted the attention of strategic partners who shared our mission to support women-owned businesses and promote economic equality. We’ve had a lot to celebrate, and one of our core values as a company is to notice and celebrate when we’ve achieved a win. Because building a business is difficult.
Related: A Roller Coaster Ride: The Ups and Downs of Building a Startup During Uncertain Times
Lesson 2: Know when to pivot and what to focus on
We’re a direct-to-consumer e-commerce company for women-owned businesses, and it’s true that the first quarter of the year is always slow for retail. You can think of it as a holiday hangover. E-commerce is not immune to that ailment, and The WMarketplace experienced a marked and seasonal slowdown in sales growth. But given the other activities in the company, this was not a major concern. Yet.
As spring turned into summer, demand for our HER-Commerce™ training program remained strong, but the COVID-19 stimulus money that previously funded many of the participating companies evaporated. This had a significant impact on our revenue projections for 2022.
Around the same time, it was becoming increasingly clear that the technology we so needed and planned had to be more stable to implement and that the process with our supplier had run into significant difficulties. Delays, more investments and time were needed.
Then came the increasingly dire economic news that scared the hell out of some of our most prominent investors. Less than two weeks after we closed our funding round, they started asking us to focus on getting profitable or getting their money back instead of continuing with the plan to invest in people and technology to build the business. The startup roller coaster felt very “down”.
To reduce costs and focus on every existing revenue stream, we’ve combed through every business detail. Every line item of spending and revenue-generating activities was scrutinized. We re-forecasted revenue, revised marketing plans, surveyed customers and adjusted partner expectations. We cut costs wherever possible.
Some of these decisions have been incredibly difficult, including a significant reduction in the salaries of our dedicated team that we were so excited to start paying only a few months ago. We discontinued initiatives and implementation of business processes we had identified to accelerate our growth, but moved away from team focus and limited resources. We have had many sleepless nights.
All signs pointed to the need to focus on our strengths, capitalize on where we had success, and not get distracted by things beyond our control. We developed detailed execution plans for our most profitable revenue streams and focused the team on a more limited number of products to deliver. This deep focus is already paying off with a solid pipeline of new revenues developing for 2023.
My conclusion at the end of the year is that while this process was excruciating at times and involved many difficult conversations and long hours of calculating and planning, it was well worth it. Our intense focus on our existing revenue streams has made us more efficient and aligned as a team. We enter 2023 with a solid, actionable plan.
Related: How to Know When to Give Up, When to Pivot, and When to Persevere
Lesson 3: Identify the real measures of success
Like most entrepreneurs, I am impatient. I want things to move fast and always forward and up. I always want to be on the “up” of the rollercoaster! But at the end of December, and I think about the past year, it’s not through the narrow lens of short-term earnings at all costs. Instead, my lens has broadened and deepened to include measuring success in measured steps towards building a sustainable business for the longer term.
The reality is that not every year is a “winning” year. Some are years of construction. At a time when many companies, big and small, are struggling (and some are going under), and the economic situation is unpredictable, we are solvent and have a list of successes that don’t normally show up on those famous hockey stick earnings graphic:
- Five of the six members of our founding team still work for next to nothing, seven days a week, to advance our company and our mission.
- We’ve attracted an incredible community of women businesses that collaborate, collaborate and depend on us to support their economic growth.
- Commercial and government organizations have publicly supported our mission and company with co-branding opportunities and sponsorships and by giving us a voice at events.
- We have built a foundation for a long-term, stable company that will support women’s economic empowerment.
- We develop a deep resilience to handle difficult situations with grace and stay focused on the important aspects of the business.
2022 was a challenge. We fell short on certain business performance metrics and failed to meet aggressive growth targets. But with a new lens that focuses intensively on efficiency, building a strong pipeline and a strong team and acknowledging the wins, the metrics we established last year may not be the best measure of our business success in the long-term. Because of the roller coaster of ups and downs we’ve had to navigate this year, our business is stronger than ever in many ways – even if you can’t easily see it on a chart.
How will you measure your success in 2022?
