“Experience is simply the name we give our mistakes.”
Instead of starting off 2020 with a business resolution, I wanted to start off by sharing one of our biggest failures from the last few years. It feels a bit awkward sharing this, because social media tends to be a firehose of positivity and success… we all try to put a positive spin on everything and leave out all of the negative bits. It makes sense, we all want to put our best foot forward. However, it paints an unrealistic picture of just how hard it is to succeed, and hides the struggles we all go through.
Internally we try our hardest to promote and foster a learning culture which embraces failure as a fact of life and growth, and seeks to learn from it, rather than stigmatize it. I hope that by sharing one of our failures, you’ll be inspired to share one of your own.
On with the failure
We had a new client a couple years ago that came to us in a bind. We had just brought aboard our new Director of Business Development and we were ambitious to grow after a period of stasis. This new client needed some serious help, and fast. We were interested in working with them, and so we shuffled around some projects, asked a few people to put in extra hours, and moved mountains to deliver for them. And we did, we delivered some really good work and helped them out of a bind.
After a few months of working with them, we had an invoice become late. We didn’t think too much about it, the relationship was going great so far. When we reached out to the client, they said it was on the way. We waited another week and nothing showed up. We pinged the client again, and told them as nicely as possible that we needed to get payment within a week or we would need to stop working.
That week came and went, and so we stopped working. Unfortunately though, because of the normal terms of our invoices, we ended up with almost two months of unpaid time for multiple people. It was a huge portion of our revenue for that time period, and it really put a dent in our year.
We had put a lot of trust in this customer, and that trust was taken advantage of. We feel like we are a pretty good gauge of people, and we didn’t get any bad signals from this client. We didn’t get any of the usual signals that tell us when a project is going sideways, or when things might be in trouble.
That doesn’t sound so bad, right? We had a client who didn’t pay, who hasn’t? The thing that makes this situation so bad is that it was preventable. We had good feelings about the client, but we didn’t do any research into them. Had we done even a cursory amount of research into this client we would have declined to work with them (or at the very least protected ourselves better). They had a somewhat public history of financial issues and broken promises. We could have also easily asked for payment in escrow, shortened our payment terms, or asked for a down payment. All of these things would have greatly reduced the impact, but in our eagerness to get a new customer in the door, we neglected all of it.
Basically, I didn’t do my job, and the whole team paid for it.
Don’t let fear drive you
Fast forward to today, we are still a very trusting company. We don’t ever want to lose that. We aren’t going to let a single bad customer spoil the way we work with everyone else.
When you get burned by an experience, the obvious lesson is simply to not repeat your actions. However, you cannot let fear control your journey, or you will end up walking only the safest, most mundane and well-trod paths. In business – and in life – fear will make you miss great opportunities. It’s as if you get scalded while preparing dinner, and your takeaway is to never cook again. Of course that’s silly. Instead, you should learn how you can keep the good parts of an experience while being conscious of risk and negative impact, ideally through a repeatable process.
So when working with new customers, especially startups, we are much more careful about how we structure payments in those contracts, and how we make those protections and milestones transparent. Sometimes customers are surprised by it, but we openly and honestly explain the situations that we have been put in previously, and for the most part they are very understanding. We highly value transparency and honesty in the customers we work with, and good partners value transparency and honesty in us.
Share your story
We would love to hear your story! Everyone has a story of failure, and by sharing it publicly you can help create an environment where failure is viewed as an opportunity to learn, and not something to be swept under the rug.