---
title: "The Story of a Marketing Executive's Failed Entrepreneurship"
description: "Lin Feng, born in 1967, left a government job in 1994 to enter the food machinery industry, rising to vice president of a group company. In 2003, he resigned to start his own barbecue grill manufacturing business with friends, but faced numerous challenges including product design issues, cash flow problems, and management difficulties, ultimately leading to bankruptcy in 2005. He then returned to a sales director position, reflecting on the 12 key reasons why professional managers often fail in entrepreneurship."
author: "景素奇"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2015-03-13"
language: "en"
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# The Story of a Marketing Executive's Failed Entrepreneurship

> Lin Feng, born in 1967, left a government job in 1994 to enter the food machinery industry, rising to vice president of a group company. In 2003, he resigned to start his own barbecue grill manufacturing business with friends, but faced numerous challenges including product design issues, cash flow problems, and management difficulties, ultimately leading to bankruptcy in 2005. He then returned to a sales director position, reflecting on the 12 key reasons why professional managers often fail in entrepreneurship.

Lin Feng, born in 1967, entered a government agency after graduating from university. Four years later, inspired by Deng Xiaoping's southern tour speeches, he resigned in early 1994 to start his second career as a sales representative at X Food Machinery Company. Through diligence and hard work, he achieved remarkable results and was promoted to sales supervisor within two years. Over three years as sales supervisor, he deepened his understanding of the food machinery industry, both domestically and internationally, and improved his management skills. His team consistently led the company in performance, leading to his promotion to sales manager. Under his leadership, sales continued to rise, and the company's scale and reputation grew, making Lin Feng well-known in the industry.

His career was smooth, staying at the top. After two years as sales manager, he was recruited by Y Food Machinery Company, a slightly lower-ranked competitor, with a 50% salary increase and the title of sales director, though the work was the same. Y Company was a state-owned enterprise that had been acquired and restructured. It had solid fundamentals but lacked market orientation and sales capability. The new private owner, Mr. Li, hired Lin Feng to open up the market. Lin Feng took office in early 2000 and, with the owner's support and his own experience, turned things around, doubling sales that year and continuing rapid growth the next. Y Company surpassed X Company and rose to the top three in the industry. By the end of 2001, Lin Feng was promoted to deputy general manager, overseeing R&D, marketing, and sales. He proposed expanding overseas, and by the end of 2002, products were exported to Japan and South Asia, with domestic products becoming serialized and branded. By early 2003, Y Company had grown significantly, with assets increasing fivefold and sales over twentyfold. The company became a group, and Lin Feng became vice president, with a reputation surpassing that of owner Mr. Li. People often said, "Without President Lin, Y Company wouldn't be where it is today."

After three years of rapid expansion, market conditions changed in 2003. Product transformation lagged, and rapid growth led to management issues, slowing growth. In the first half of 2003, sales grew only about 10%, a sharp decline. Mr. Li became anxious and sometimes spoke harshly, hurting even Lin Feng.

Reviewing his career, Lin Feng decided to become his own boss. He compiled a list of Mr. Li's eight "crimes" and his own grievances: Li was stingy, as sales had grown nearly 20 times but his income only doubled, with an annual salary of just 300,000-400,000 yuan compared to nearly 100 million in profits; Li broke promises, such as the 2001 talk of manager shareholding; Li was too greedy, dissatisfied with the company's success; Li was indecisive, hindering growth. Lin Feng decided to leave and, with friends, planned a new venture. They chose to make barbecue grills. Reasons: total capital was only about 3 million yuan, insufficient for the food machinery business; the barbecue restaurant market was booming due to rising living standards and Sino-Korean trade; 3 million yuan was enough for grill production; the production process was similar to food machinery, though customers differed (food processing plants vs. barbecue restaurants), but both were B2B. In September 2003, Lin Feng resigned despite Mr. Li's pleas, citing fatigue.

In the early days of entrepreneurship, Lin Feng was ambitious and methodical. He rented a factory, set up a company, and raised funds, aiming for product launch before New Year. He recruited staff and proceeded as planned. As the largest investor and full-time, he became the legal representative. They had detailed business plans, expecting to recoup investment by September 2004 and start profiting by year-end. However, things didn't go as expected. They encountered many problems due to unfamiliarity with the restaurant equipment industry, such as patent applications being delayed. Although a prototype was ready before Spring Festival, patents and product approvals weren't granted, dashing hopes of recouping funds by year-end.

Problems multiplied; it was like moving mountains. Lin Feng had never started a business before and found it much harder than expected. He had to handle countless trivial matters himself, dealing with government departments (industry, commerce, tax, labor, health, environment, city appearance, streets, fire safety) and internal chaos in R&D, design, production, management, procurement, marketing, sales training, factory renovation, warehouse management, administration, payroll, and employee conflicts. His management skills from textbooks and Y Company didn't work.

After Spring Festival, employees returned late February or early March. They rushed patents and approvals, which weren't complete until July 2004. Some new employees left, and even old subordinates considered leaving, hurting Lin Feng. Investors, not involved in operations, offered encouragement.

When the first batch of 300 grills was produced in September 2004, Lin Feng held a launch event, but media coverage was minimal. Sales were slow; customers didn't trust new products. The investor familiar with restaurants recommended them, but friends politely declined, some offering to try free. Sales staff became demoralized, and despite increased commissions, the company lost money. Finally, in late October, they sold 12 units to a new barbecue restaurant, with 60% payment upfront and the rest later.

On November 8, the restaurant opened, and Lin Feng and the sales manager attended. The next day, the owner complained about four major problems with the grills, affecting business. Lin Feng sent people to inspect; some issues were fixable, but design flaws couldn't be repaired, posing safety risks. After apologies, the restaurant waived the remaining payment. The incident was settled, but Lin Feng hesitated whether to sell the remaining 200+ units while design improvements continued.

Cash flow problems emerged. The initial 3 million yuan was nearly exhausted, including the 300,000 reserve. They owed money for steel plates. The steel company's sales manager, a friend, came to collect. Lin Feng explained his situation, but the friend said, "You must pay soon, or I'll lose my job." Lin Feng couldn't ask for more credit, having already defaulted. He was upset, as he despised people who broke promises.

Cash flow issues led to more problems: employee wages were delayed, and promised allowances for sales staff were cut. Salespeople couldn't cover expenses and began taking leave. The sales manager faced the same issues. Other staff also went unpaid. Additionally, rent of about 160,000 yuan for the first half of 2005 was due, plus utilities and fees for various departments. Year-end also required gifts for officials. Management rules broke down, and Lin Feng was sleepless with worry.

Lin Feng called a shareholder meeting. They decided to invest an additional 500,000 yuan proportionally, with Lin Feng contributing almost all his savings. After paying rent and other essentials, only about 300,000 remained. Before Spring Festival, he paid 60% of back wages, leaving about 150,000-160,000. The steel friend came and pressured him, eventually getting a check for over 20,000 yuan, a fraction of the 200,000 debt. Lin Feng experienced being chased for payment for the first time.

He knew the remaining funds wouldn't last a month after the holiday. During Spring Festival, he met with shareholders; two refused to invest more. They decided to seek external financing. Lin Feng had a miserable, poor Spring Festival, facing family criticism.

After the holiday, less than half the staff returned. Lin Feng tried to get employees to invest, but most declined. By March, many had left for other jobs, leaving only finance, office, and warehouse staff. He cut costs, paying only basic living expenses. He spent days seeking financing, but talks yielded nothing. He considered selling products as a distributor but lacked funds, and as a sales rep, he couldn't bear the loss of face and the income wouldn't cover expenses.

With no financing prospects, he discussed selling the company with shareholders. Opinions varied on price, from 5 million to just recovering costs. Eventually, they agreed to let Lin Feng handle it. But finding a buyer was hard. Initial interest at 1.5 million fell through. Later, offers were as low as 100,000-200,000, and deals fell through. Finally, they decided to dissolve the company. Lin Feng held a meeting, settled accounts, sold office supplies and the 200+ grills for about 20,000 yuan, paid off utilities and final wages, and had a farewell dinner before the May Day holiday.

After May Day, Lin Feng returned to work as a sales director at another company, with an annual salary of 300,000 yuan and monthly base of 15,000 yuan. Sitting in the office, he reflected on his 18 months as a boss, feeling it was like a dream. He had used up his savings and had to start over. He was grateful his wife was understanding.

The main reasons why professional managers often fail in entrepreneurship include:
1) Fixed value orientation: long-term professional habits are hard to break, hindering entrepreneurship.
2) Different motivation: professional managers start businesses for career rather than survival, lacking the drive of necessity.
3) Too many fallback options: they have many alternatives, weakening commitment.
4) Too many opportunities and temptations: with broad social networks, they get distracted.
5) Divided time and energy: spreading efforts leads to failure.
6) Strong management but weak business skills.
7) Too many social constraints, making them hesitant.
8) Seeing too much, they can't find a starting point, unwilling to do small things.
9) Low risk tolerance: they can win but not lose, and their resources are based on corporate platforms, not capital chains.
10) High cost of trial and error: age and confidence issues, and failure damages reputation.
11) Role positioning leads to organizational imbalance: long-term balancing between boss and employees, conflicting with investor interests.
12) Lack of entrepreneurial education in China, leading to insufficient knowledge and skills.

Statistics: In developed countries, 35% of new businesses fail within the first year, only 30% survive five years, and 10% survive ten years. Top causes: market (27%), management (24%), technology (12%). In China, the failure rate is over 70%, with college students' success rate only 2-3%. 70% of businesses fail within a year, and average lifespan is less than three years.

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