Startup failure story

The first failures

At that time, friend A was married and had residency papers in Poland so he could open a company, the other 4 did not have papers. We discussed opening a restaurant and a kiosk in some shopping centers in Gdansk. Since only friend A had papers, he opened the company, the other 4 people on paper were employees of the company, and according to the agreement they were shareholders, about 20% each (there was a slight difference in the ratio but not significant).

Because we were close friends, we thought that starting a business was like continuing the fun of college, without clear division or written constraints. The whole group just worked from 6am to 12am, sometimes until 1am to finish work. We only slept 3-4 hours a day, but it was okay, counting money was fun. Friend A opened the company as the treasurer, kept the money and took care of all the books. I was closest to friend A, so after work, we went to his house for dinner. Many times friend A said: "I find counting money so much fun, I never get bored". I don't like counting money, I'm happy because the company is developing, everyone has income, and a stable life.

From a restaurant, the company developed several more stalls, selling clothes (mainly Indian and Turkish goods), handicrafts, stationery, etc., selling whatever was available. That was the opening period, Poland had just changed from Socialism to Capitalism, so people had a need to shop but the supply of goods was lacking. Many times we bought things from stores belonging to the old state system (they had a stable supply), bought all their goods and brought them to our company stall, sold them at 2 or 3 times the price but still sold like hot cakes, while their stores had few customers. Simply, our service was better, the sales people were all young and enthusiastic. The stalls were beautifully decorated and eye-catching. The old trading stores were ugly and had arrogant attitudes.

The company continued to grow, sales increased, money came in a lot, A and I often discussed business directions in the evenings. We discussed importing Vietnamese handicrafts to make more money. I was assigned to go to Vietnam to find sources of goods, simply because in Vietnam I had more acquaintances and friends. A took care of the Vietnamese side, the other three just carried out the work. I was determined to do it to the end and devote myself to the company. In Vietnam, I went to the craft village in Thai Binh to order lacquerware and silver inlays such as household items. In the South, I went to Dong Nai to order lacquer paintings, conical hats, etc.

However, business is another story, I don't want to go into detail here.

Starting a business with your best friend is not necessarily good.

Sales increased, money increased. A suggested that B leave the company, I did not object. Because B was only an employee on paper, everything was resolved quickly, with some compensation. Actually, at that time, only A kept the books and knew how much money the company had and how much profit it made. The shares of B who left were divided between A and me.

Then came friend C. This time the shares were also divided mainly between 2 people (A and me). Later, a big conflict broke out between me and A and I decided to leave (this was my decision). Friend A accounted that he still owed the company, gave me some goods, and kept the assets, brand, and distribution system.

The last friend, E, was not a match. A few years later, A proposed that E leave the company and compensate E with 500k USD. E agreed to accept the large sum of money. In fact, the company was already worth millions of USD at that time.

I just failed in my first startup, lost a friend. In addition, I also owed a lot of money to my partner in Vietnam (at that time, I borrowed money from my partner in Vietnam to make goods for a company in Poland).

The main reason for the failure, you must have seen clearly, the initial agreement was only verbal, the financial accounting was also unclear.

At that time, we gathered together to start a business not because our expertise could be used for business but because we were drinking and soccer friends. So, those who are starting a business should learn from this experience, from the beginning the paperwork should be clear, hire a proper notary lawyer. The clearer it is at the beginning, the easier it will be to break up later. And importantly, when starting a business, you need to choose your partner carefully, not just because you are close friends and start a business together.

Conclusion

The story I share is not to discourage young people who are dreaming of starting a business, but to serve as a small reminder: starting a business requires not only passion, but also alertness and professionalism. You can start with friends, but lay a clear foundation from the beginning - in writing, in law, in financial transparency - so that friendships are not eroded by money or interests. The first failure is not the end, but a valuable lesson for more solid steps later.

There are many failures, today I share that. Wish you start your business carefully and successfully.