8 Lessons I Learnt When My Business Lost Half A Million Dollars

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With John Polson, founder of Tropfest – aka the largest short-film festival in the world.

tropfest-atmos-5Sometimes, hitting an almighty brick wall can pave the way for the most triumphant of comebacks. Just ask John Polson, whose entrepreneurial journey has scaled dizzying heights – and one seriously dark low.

Since launching Tropfest to a crowd of 200 in 1993 at Sydney’s Tropicana Caffe, John’s annual event morphed into the largest festival of its kind in the world, putting up to a million bums on beanbags in its heyday and naming Rebel Wilson, Joel Edgerton and Cate Blanchett among the famous alumni who have taken part.

Fast-forward to November 2015, and John, who has since relocated to NYC, received the ultimate shock when he discovered that the company licensed to oversee the day-to-day operations of Tropfest had effectively lost around AU$500,000.

“[Tropfest 2015] was due to happen in December, so one month before the event… I was forced to go public and say, ‘Hey guys, I don’t know if there is going to be a Tropfest. I know there is not going to be a Tropfest in December, I don’t think there is ever going to be a Tropfest again,'” recalls John. “It was a terrible feeling… On a personal level, it felt like 24 years of hard work going down the drain, and in not a very glamorous fashion. It wasn’t like I got up and announced, ‘Hey, this has been fun but we’re going to let it go.’ It ran into a brick wall, is what happened.”

Cue the ultimate pivot. With some phenomenal business advisors, an impassioned social media campaign by fans, an angel sponsor, a shift from a licensed model to a not-for-profit model, the appointment of a board (including the likes of Mad Max director George Miller), a new location in Sydney’s Parramatta and a hefty dose of hindsight, he pulled off a phenomenal comeback.

So, on the eve of the 2017 Tropfest festival, due to be held in Parramatta on February 11, behold the eight most game-changing lessons John has picked up along the way.

1) Never lose sight of who your work is serving
“The real thing that kept me ticking and trying to get it back on the rails was all the filmmakers that [Tropfest] had helped over the years and will help in the future. When I got that email, all the films were already in; the filmmakers had spent their money, their time, their energy to create a great film, and now I’m being told we’re going to destroy them. I’ll never forget when I found out the news; we’d just selected the 16 finalists. I was like, ‘Oh my god, what do we do?’”

2) Don’t underestimate the power of community
“Everybody, to my surprise, was up in arms and got on social media and it became this huge story. Then fortunately for us, CGU Insurance heard about it, called us and said, ‘We would like to sponsor the event and make sure this Australian icon doesn’t die.’ In doing that, the event did go ahead in February [2016].”

3) Don’t be afraid to adopt a new business model
“That [license-based] model, to be fair, had worked pretty successfully for a lot of years – but when it broke, it really broke badly. So I enlisted the support of [business management consultants] Ernst & Young to come onboard and help me restructure the company and give me the advice on what the options were. They came up with the plan to become a not-for-profit Australian company called Tropfest Australia Limited. It’s got a board and I’m the chair of the board. We have a senior management team now and we run like a much bigger, much more professional business. There’s no license; Tropfest Australia Limited, the non-for-profit company, runs the event itself, it doesn’t hire anyone to run it.”

4) Ditch the ‘if only’s
“Hindsight is 20-20. Tropfest is 25 years old, not a lot of companies can say that, so we made a lot of right decisions along the way, too. But, for whatever reason, the company that was meant to be running it got into all sorts of trouble and that’s just the way it went down. None of this would’ve happened if I lived in Sydney, but I’m also trying to build trust there and I’m trying to make sure I have freedom on my own and this is where my career is meant [to be] for me. Do what’s in your heart.”

5) No one will care about your company like you do
“You can’t expect other people to take care of your baby in the way that you would. If you build something up and it supports you, you can’t just trust and be a bit naïve, frankly, and think, ‘Well, these guys have got it figured out, we’ve got an agreement in place.’ You really can’t do it. Moving forward with a new company, I’ve seen everything there is and there is full transparency.”

6) …But business doesn’t have to be a solo race
“You can’t do everything. What you can do is know your business as well as you possibly can and then you should have an expert or two explain to you what you don’t know, preferably someone independent. I mean look, I know a little bit about accounting but I’m not an accountant; I know a little bit about legals, but I’m not a lawyer. You can’t do everything, but you should do your homework and you should really be across everything as much as you physically, possibly can.”

7) Embracing change is everything
“I think there is nothing more important [than being adaptable in business]. Moving to Parramatta [in Western Sydney], I can’t tell you how many people were nervous about it, because [Tropfest has] been at a certain place for so long, but I think if you’re going to be a real leader and an entrepreneur, you actually have to be courageous and embrace changes in a way that celebrates the brand. You have to be, not just adaptable, but you have to embrace change and lead the change and be prepared to roll the dice.”

8) …But never lose sight of your roots
“You’ve always got to remember who you are… I do soul-searching literally every day on Tropfest and make sure that every decision, big and small, to as much extent as possible, is made with this one eye on what Tropfest has always been, which is the grass-roots, unique, rule-breaking platform for a young storyteller and filmmaker. If you can keep that in the back of your mind with every decision, then you can hopefully stay on track and stay on the brand and keep your integrity alive.”

 

Tropfest 2017 will be held in Parramatta, Sydney, on February 11.

To read the full interview with John Polson, check out the January issue of Collective Hub.

 

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