My biggest mistake: Tim Duggan, co-founder of Junkee
It was the pressure to grow — more revenue, more clients, more staff — that led Junkee co-founder Tim Duggan to make a big mistake… twice.
It was the pressure to grow — more revenue, more clients, more staff — that lead to Junkee co-founder Tim Duggan to make his two biggest business mistakes.
Today Duggan is a successful entrepreneur who has co-founded several digital media ventures, including Junkee, has published two books about entrepreneurship and innovation, and sits on several boards. But before all that, in his mid-20s, Duggan was living in Sydney and working on a events business events in the LGBTIQ+ space, which had grown from hobby to profitable venture.
His story offers a cautionary tale for all those founders and entrepreneurs feeling the pressure to grow at all costs.
The mistake(s)
With a host of successful events under his belt, and growing in confidence, Duggan set his sights on an ambitious goal — to host one of the first parties at the Sydney Entertainment Centre.
“I was under this misguided belief in my mid-20s that my business needed to get bigger and bigger,” Duggan recalls.
“So I borrowed lots of money, and tried to sell lots of tickets.”
To those partying long into the night at the Sydney Entertainment Centre, the event felt like a success, but Duggan was having a more difficult time enjoying the party. He’d sold plenty of tickets… but not enough. It fell well short of what was needed to break even, and Duggan had lost $80,000 in a single night.
Years later, when Duggan was helping build Junkee Media, he found himself in a similar situation — enjoying success, but looking for more.
Duggan and the rest of the Junkee Media team decided that expanding to the United States was the best avenue for that growth. Unfortunately, it proved to be a difficult market to break into. What resulted was not more success, but wasted time, money and resources.
“We lost complete focus on what we were trying to do and ended up wasting a couple of million dollars.”
The context
Duggan says getting a taste of success can be intoxicating. His events business started out as free events with 50 or so people. But soon became 100, then 200, then 400. Pretty soon he had events with 1000 people in attendance that were turning a profit.
“You still think ‘I want more.’ You end up getting drunk on excel spreadsheets,” he says with a laugh.
“You wonder, how much profit can I make from these things if I just add an extra zero on the end.
“Before you know it, you’ve got budgets of hundreds of thousands of dollars. You’ve borrowed a lot of money, and you start to believe a lot of your own bullshit a little bit.”
Junkee Media’s unsuccessful expansion to the United States was fueled not by spreadsheets, but by the thought of its potential.
“I’m all for having a big vision and big goals,” Duggan says.
“But the bigger the scale, the bigger the problems.”
The fix
The nature of the two businesses means Duggan’s two mistakes revealed themselves in different ways. The prospect of the dance party at the Sydney Entertainment Centre turning a loss-making exercise began as a gnawing in the back of Duggan’s mind.
“We sold tickets through TicketTek, which had an automated system that would send an email with the previous day’s ticket sales at three in the morning. And at the time this was my only way of seeing the live ticket sales,” Duggan says.
“I would go to bed, and try whatever I could to not wake up at 3AM, but of course I did, and I’d check the sales. It would either be a good number of tickets and I’d go back to sleep, or a terrible number and I’d spend the rest of the night worrying.”
When the stats started to make it clear that the event would make a loss, Duggan sought to cut costs where he could at the last minute. Duggan was fortunate in some ways that the money lost came predominantly from family and friends, although this presented its own challenges, guilt among them. Thankfully he was able to agree on plan to pay the money back over time.
“I recognise not everyone is fortunate enough to be able to do that,” he says.
“I dusted myself off, kept putting on more events, and within 12 months I had made enough money to make up for what was lost that night.”
Making a profit on an event is easily measured. Launching a media brand in an overseas market, less so. Duggan says it took a lot of time to recognise that it wasn’t working.
“You start to sense that you’re wasting time, money and focus. But ego, greed, all of those things get in the way of truly letting you realise it,” he says.
Eventually, but not before Junkee Media had lost a few million that it could ill-afford, and with the Australian part of the business starting to suffer, Duggan, the founding team and the board came together and decided that ending the US expansion was the right thing to do. The solution was to cut their losses.
“It’s a really hard thing to do,” Duggan says.
“Because you’re literally throwing away all of this time and money you’ve spent.”
The lesson
When Duggan reflects on these mistakes, he recognises they were driven by that desire for more.
“It’s OK to have a really good business that doesn’t completely stress you out, that doesn’t completely burn out all of your employees,” he says.
“It’s OK to stop and be happy with where you’re at, instead of always wanting more and more and more.”
That insight informs the advice he gives as a consultant, and to entrepreneurs and founders who are early on in their own businesses journeys.
“Set your expectations at the beginning,” he says.
“I think most people, at the very start, don’t think about what success looks like to them. So they don’t know if they ever reach it. So they just keep going and going and going.
“I learnt the hard way, that just trying to grow at all costs, can have a really detrimental effect on you personally, and the business around you.”
