Make Big Money Mistakes Early

It's just a cafe, how hard can it be?

The best money I ever lost was building our cafe. 

In 2018, my wife and I decided we wanted to open a tea cafe in Austin. In 2019 we found and leased a space and commenced our renovations. After a year of planning, permitting, demo-ing, installing, and fussing, we finally opened our doors in January 2020, and then had to close them 2 months later.

If there was a “worst kind of business you could start going into COVID” list, a sit-in tea cafe would be up there. Maybe behind massage parlors and kissing booths, but it’d be up there nonetheless. We debated trying to figure out to-go orders or some way to make the business work, but there was no end to small business restrictions or quarantine in sight. Ultimately we decided to shut it down and move on to other things. 

We sold the website and inventory and recouped some of our losses. But we’d still lost a good chunk of money on it, not to mention a year and a half of our time and some degree of sanity. Among the more memorable moments was six months into construction when the first plumber we talked to said it was physically impossible to put in our drainage pipe without demoing part of the concrete slab under the building, a $20,000 job. 

We truly had no idea what we were getting ourselves into. It’s hilarious to look back at everything we didn’t know and had to learn along the way. The landlord laughed at us when we initially thought we could get the cafe operational in three months. Now I’d laugh at us too. We weren’t even done with permitting in three months.

But whenever I talk about the cafe, I always mention how glad I am that we did it. I learned more about plumbing, electrical, real estate, commercial property, negotiation, and physical business than I could have in almost any other setting. It got Cosette out of a job she hated. For that brief two-month period, we had a space we loved where our friends could come to hang out and work throughout the week and always know they’d have a small community to meet up with. 

And most importantly: we learned we never, ever, ever want to open a cafe again. 

Maybe you have entertained a similar idea at some point: “Wouldn’t it be great to open a little spot of your own, where your friends could all hang out, where you’d have great coffee and wine and vibes?” 

I had that romantic notion in my head for years. I mean, it’s a coffee shop. How hard can it be, right? Well, it turns out pretty damn hard, and way more expensive than you expect. 

But I’m glad we tried when we tried because we had limited resources to try with. We had to build the cafe as leanly as possible. We couldn’t throw a massive lump of our savings at it.

If we had waited until later in life, until “the right time,” we probably would have gotten the same lesson for 10x the cost. We would have had the same hubris and delusions of simplicity and thrown many more resources at it that would have set us back much further. By running the experiment early, we protected ourselves from future losses. 

You have certainly seen or heard of stories of people who wait until later in life to start their first entrepreneurial endeavor. And while that’s still admirable, if you’re young and have the opportunity to try your “someday” dream earlier, you absolutely should. Not just because you’ll get better over time but because the cost of failure will be much lower. Losing your life savings in your 20s will barely impact you. Losing your life savings in your 50s, on the other hand… 

I feel that the whole importance of starting a career in your 20s is overrated. You have through your 60s, even 70s, to build a career. Whether you start at 25 or 30 isn’t going to make much difference. It’s worth it to delay the compounding interest of a career by 5 or 7 years so you can make sure you have picked the right one. 

The same could be said for savings and investing. Yes, the compounding interest of starting saving in your 20s can be great. But what’s the point of being rich if you’re stuck in a job you hate? It would be much better to save nothing, try a few different careers, and decide on one you love by 30 than to commit your life to management consulting at 22 and end up a hollow shell of a person at 50 (though all the airline points totally make up for it). 

If there’s some big life challenge or experience that you know risks wiping you out or setting you back financially, just go for it sooner than later. There’s never going to be “the right time,” and the longer you wait, the more you’ll have to lose.

But trust me on this. You really don’t want to open a cafe.