Andrew Goetz | Crain's

In this ongoing series, we ask executives, entrepreneurs and business leaders about mistakes that have shaped their business philosophy.

Andrew Goetz

Background:  

Matthew Malin (left) and Andrew Goetz founded Malin + Goetz in New York City in 2004. The company sells gentle treatments for a variety of skin types as well as hair products, perfumes and other personal care items.

The Mistake:

For years, we’ve been approached by investors, and we always weren’t interested in taking investment. There was this one guy who said, "I really want to be part of your business."

We said no, and he said, "Well, how can I help you, in any way?"

We said, "We’re working on our global distribution and we feel like the Japanese market would be incredible. [The department store] Isetan is always calling us and we’d love to be there, but we just don’t have the bandwidth to support a business in Tokyo from New York."

He said, "I have the perfect person for you. He’s an amazing guy, he’s a great distributor, he’s going to build you a store" — all these wonderful things that seemed too good to be true. And he made the introduction.

It wasn’t that the distributor wasn’t a good person, but he was not a player in our industry. In fact, he was a distributor of housewares. I think Matthew and I got blinded by the prospect of being in Japan and not having to put down a financial commitment ourselves. This guy was going to build us a store in Tokyo and yada yada, and what happened was he found a better real estate deal in Osaka, so he built a store there.

That’s not the way we would have done it — it doesn’t make sense. Even though we’re not doyennes of Japan, we knew Tokyo’s where you want to put all your effort. I remember flying there and thinking, "We’ve made a mistake." It took a while for the business to wither, but it did and it’s too bad because Japan is such a great fit for Malin + Goetz.

There’s a saying I like, "Do what you know and know what you do." He didn’t know either. Ultimately, we’re to blame because we should have known.

If it’s too good to be true, it's too good to be true.

The Lesson:

The lesson to be learned with too good to be true is that if it’s too good to be true, it's too good to be true. I think we were just so punch-drunk on the prospect of having a business in Tokyo that we didn’t really evaluate it the way we should have.

We actually did learn something about not only Japan but also all international distribution — that it’s very complex, cultures are different and you can’t be arrogant to think that just because you have a great brand and a great product that it necessarily translates effortlessly from one region to another.

Now, we’re in a lot of places globally, but we handle it very strategically and we make sure that we don’t bite off more we can chew. We definitely are much more discerning of what kind of distributors or wholesale retailers we're going to take on.

Follow Andrew Goetz on Twitter at @malinandgoetz.

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