Andrew Bryant – Sunk Cost Does Not Account for the Learning
BIO: Andrew Bryant, CSP is a Global expert on Self Leadership, a C-Suite Advisor, an Award-Winning Coach, and a Best-Selling Author.
STORY: Andrew invested heavily in a gym with the plan to offer service-based health and wellness. Low-cost gyms came up and swallowed his business.
LEARNING: Understand how to get in and out of a business, test your market first and know what your customers want, not what they need.
“Sunk cost does not account for the learning.”
Andrew Bryant, CSP is a Global expert on Self Leadership, a C-Suite Advisor, an Award-Winning Coach, and a Best-Selling Author. English by birth, Australian by passport, Singapore by PR, and Brazilian by wife, Andrew is adept at moving across cultures.
Andrew is on a mission to ‘wake people up’ to their best possible selves, which he does through his Conference Keynotes, Leadership Team Facilitation, and Coaching.
He is Leadership Faculty for Singapore Management University, where he also contributes to the Women in Leadership Program and is most proud of the work he has done building self-esteem and confidence for at-risk teenagers.
Worst investment ever
Andrew’s first degree is in physiotherapy. He worked in hospitals for a couple of years and later with sports teams.
Bringing his strengths together to build a business
Andrew decided to bring together his medical and sports experience to create a wellness center. So he bought a gym. Andrew had always been critical of gyms because they were poorly managed, and there were many myths about fitness. He planned to bring science to fitness as a physiotherapist.
Investing too heavily
Andrew overly invested in the gym without realizing that he was paying for things he didn’t need to pay for. Then he hired the best human resource graduates from the local university to be personal trainers and paid them a lot. He believed that would make the difference. Andrew invested in equipment, real estate, and staff.
Too much competition
Andrew focused on offering service-based health and wellness, and it worked for just a little while. Then the fitness craze hit Australia, and low-cost gyms sprouted everywhere. These gyms weren’t selling service; they were selling hope. While Andrew was charging $49 a month for a subscription, the new gyms would charge $49 a year. The low charge obviously attracted people, and this drove his customers away.
A flawed business model
The biggest mistake Andrew made was not realizing that his business model was flawed. Instead, he continued investing more and more money until he ran out.
Test your market first
Test your market first with a minimum viable product to see if things are going to work out before putting all your money into the product.
Have somebody to argue against your proposition
Look for someone that you trust and spend time arguing against your idea and pick holes. This will help you see if your idea is viable.
Understand how to get in and out of a business
When creating your business plan, remember to include an exit plan should the business fail. If you don’t have an exit plan, you don’t have a business; you’ve just bought yourself a job.
Look at the dynamics of an industry and exit when necessary
Before you enter a market, look at the dynamics in that industry. Consider how the competition is. Sometimes you can’t swim against the tide, especially when there is a significant change in that industry. It may make sense to exit when this happens.
What the customer wants versus what they need
Get to understand what the customer wants and deliver that to them. It is not your business to determine what the customer needs; give them what they want.
If you are in the stuck phase, know that this too shall pass. Just don’t allow the sunk cost fallacy to keep you in a bad investment. It is ok to walk away. You may not have money in the bank, but as long as you have been able to articulate your failed venture as a lesson, and you can share that lesson, then you haven’t lost the value.
No. 1 goal for the next 12 months
Andrew’s number one goal for the next 12 months is to settle in Portugal. He is in the process of moving from Singapore to Portugal and is busy packing right now.
“Never seek validation, but it’s always nice to get validation.”