Recognize the advantages and disadvantages of starting a business
Understand why some businesses fail
List important things to consider when deciding whether to start a business
The Entrepreneurial Roller Coaster
This Apply It continues using the Bombas case study video from earlier in this module. The video is included below in case you want to refresh your memory about specific details, but if you have already watched it, you don’t need to watch it again.
Recall how the Bombas founders describe their experience after Shark Tank, doing “a third of our business in two days” compared to their entire first year, creating both opportunities and challenges.
What specific advantages of starting their own business did the Bombas founders experience?
The Bombas founders experienced a number of advantages of entrepreneurship. First, they had the freedom to pursue a business model aligned with their personal values, combining profit with social impact through their buy-one-give-one model. They also had the opportunity to make a meaningful difference by addressing a specific community need they felt passionate about.
The founders experienced the advantage of controlling their own destiny by making strategic decisions about product development, spending two years perfecting their socks before launching. Additionally, they benefited from unlimited growth potential, scaling from $150,000 in initial crowdfunding to millions in revenue after Shark Tank. Finally, they gained recognition and visibility through their Shark Tank appearance, which they leveraged into significant business growth.
How does Bombas’ experience with website crashes and inventory challenges illustrate common reasons why some business ventures fail?
Bombas’ experience with website crashes and inventory shortages highlights some common reasons for business failure, even though they successfully navigated these challenges. Their situation illustrates the difficulty many businesses face in managing rapid growth when sales suddenly spiked after their Shark Tank appearance.
Their experience of “selling out of the product long before we were able to replenish it” demonstrates how inadequate inventory management and supply chain issues can threaten a business’s ability to meet customer demand. Many businesses fail because they lack the cash reserves, infrastructure, or systems to handle such rapid scaling. Bombas’ ability to overcome these challenges likely stemmed from their preparation and strategic decisions to secure funding before major growth events, allowing them to weather these common pitfalls that cause many startups to fail.