DO YOU HAVE A BUSINESS DISASTER STORY YOU’D LIKE TO SHARE?
James Tuckerman, Editor-In-Chief, Anthill Magazine
Around this time last year, I dedicated my editor’s note (in the print edition of Anthill Magazine) to the re-telling of one of Anthill’s many business blunders.
It was the sort of forehead-slapping, groan-inducing error that you think (at the time) you’ll laugh about later. It was such a simple mistake that you could almost call it an oversight.
So what did we do? What was our mistake?
In short, we forgot to renew our domain name.
The reminder arrived, along with a small pile of fraudulent renewal letters (the way that it is with respect to most publicly available snippets of private information these days). The legitimate letter was tossed away with the junk letters and the matter was overlooked.
‘But what about the email reminder?’ you might reasonably ask. Anthill was set-up while I was working for another company and I can only assume that the reminder was sent to a now defunct email address at my place of previous employment (but that’s a story for another day).
It was a simple mistake, a head-slapping, groan-inducing, something-to-laugh-about-later, insignificant error, right? Right!?
Well… no.
Within days our website disappeared, only to be replaced by a message stating quite bluntly that our domain had expired and was now available for purchase. And this was the message that greeted Anthill web-visitors for the next five days (an entire working week).
So, what was the fallout from this mini business disaster?
Firstly, we lost a chunk of subscription revenue (many Anthill subscriptions are purchased online). Secondly, we raised the ire of our web advertisers for not fulfilling our obligations. And thirdly, I can only assume that we disappointed the spectrum of people who frequent our website.
But the real damage was done to our credibility.
Many visitors assumed that we had gone belly-up. Magazine publishing is a precarious game at the best of times. The burden of feasibility is on publishers, particular within advertising circles, because most people know that the mortality rate among new magazines is extremely high.
However, like all hard-working business operators, we pressed on, fuelled by the scepticism of the doubting Thomas’s, dogmatically determined to prove our critics wrong. We also caught a glimpse of the goodwill Anthill has fostered since its inception, and became energised by the phone calls and emails of concern from our more enthusiastic readers.
Ultimately, of course, we came out stronger, with better systems, better reader relationships and the knowledge that most ‘business disasters’ can be overcome.
Making mistakes is all part of business. We never like to admit it. But it is often the fallout from mistakes that initiate growth and help us to excel.
We’ll be exploring this oft neglected area of business in our Aug/Sep edition.
This is our invitation to you. Why not regale us with your groan-inducing business follies? The best will be published in our Aug/Sep edition. Your disaster can be simple (”I forgot to put ink in the fax and lost a massive purchase order.”) to the complex (”We tried to launch bottled water into Alaska using a refrigerated truck, instead of a heated one, and discovered that it is, in fact, very hard to sell ice to the Eskimos.”).
We have but one simple request… Please, no PR agents allowed. We only want to hear from genuine business owners with genuine business disaster stories.
Remember, what doesn’t kill you will only make you stronger.
April 29th, 2008 at 3:20 pm
Very early in my career I approved publication of a book only to realise after it was printed that there was a highly embarassing mistake… on the cover! I rang my wife to say I thought it could be my last day at the publishing company. I couldn’t have been more wrong. My managing Publisher was interstate at the time but had been advised by phone. She rang me directly, told me that this expensive mistake (we had to reprint) was an expensive company investment in my professional development and just to make sure that I learnt from it and carefully assessed where processes had broken down to avoid it happening again in future. That would have been learning enough, but she also did something else that I’ve never forgotten. She then rang a string of senior colleagues and asked them to stop by my office and each share their ‘disaster’ stories. One by one people appeared over the course of the day to tell me about their worst disaster, how it happened, and what they learned. It was a pivotal day in my career and as I’ve gone on to manage others and build my own business I’ve never forgotten it.
April 29th, 2008 at 3:25 pm
Hello,
Are you interested in investing blunders as well in dodgy or incompetent companies? It actually directly correlates to my own ‘blunders’ in investing.
regards
Jon
April 29th, 2008 at 3:52 pm
E Ball builds sports simulators.
We had built our first prototype. The first public testing was in a hotel in Calton. It was 2.0 metres high - carefully planned to fit through a normal doorway. The only problem was that the first site was not a normal doorway. We spent the next 2 hours on a pavement just off Lygon Street, cutting the simulator in half, with the aid of a jigsaw so we could do our first test - with hundreds of interested bystanders asking what we were doing.
This had unexpected consequences - because the two halves were not as strong as the whole.
We were moving the simulator to a Toyota Dealer’s meeting - with Toyota exeutives from all round the globe. We dropped one half and watched as the wooden structure fell apart. Instead of an enclosed simulator we now had bits of wood in a pile on the floor with two hours before 120 Toyota Dealers came to see the simulator. Somehow we managed to get it together and ready for operation with 5 minutes to spare. During the Toyota demonstration we had to make sure that noone lent against or touched the simulator - because it was highly likely that it would end up crashing down.
The learnings - no matter how well planned. Allow lots of time, because your first operational tests of a new product or service will identify issues that you never envisaged.
April 29th, 2008 at 3:52 pm
even though I am a dastardly PR person, I thought you might like to hear of my own, very stupid mistake! That old chestnut ‘Don’t put all your eggs in one basket’ comes to mind as the moral of this story.
When I set up the business I had about three clients. That was plenty I thought, as I worked from home and didn’t want the business to be too frantic. Well, suffice to say that over the next year or so a couple of the other clients fell away due to natuaral attrition and I was left with the one client who financed my lifestyle very nicely. Why complicate things and get more…it would just be greedy I thought.
Then, horror of horrors, the client decided that they really didn’t need as much PR for one of their products and, quite rightly, suggested that the following month they would have a small break. Nothing that would last, just a month’s breather while they regrouped and worked on their strategy for the rest of the year. Neddless to say, it was an absolute disaster for me.
The lesson I (very quickly) learned from that was that you should NEVER rely on just one or two clients for your income. You should spread your income across a number of businesses to reduce the risk. You can always employ someone to come and help but if you have no income you are stuffed!
That pivotal moment was the beginning of huge growth for my business and since then I have never looked back. I am always on the lookout for new business and will never forget the lesson I had to learn the hard way!
April 29th, 2008 at 4:00 pm
I designed a range of luggage, with no experience in manufacture, design, sales, importing, exporting, or working with family & friends. What was I thinking?
I began smart - I thought. Twelve months of research by myself and two friends. We found an overseas manufacturer after my search for an Australian manufacturer fell through. I found them online after “googling” my requirements. (I also had no idea about Austrade, overseas agents etc…). We ordered two sample sets of luggage, one in each color I planned to offer and set up a stall at the Melbourne travel expo for pre sales. So far, so good. Friend number one pulled out of the business. That’s ok, I had only outlayed $10,000 of my own money for all set up costs and samples. I could live with that. At the expo, orders were rampant, the buzz was amazing, my family offered to invest. I had drawn up an extensive business plan, including investor options and how much was required. One family member offered a huge investment, after seeing the sample product and the Expo frenzy. I placed that first huge order, a 40 foot container load of luggage, booked storage and processed all the pre sale payments. Then it happened. My big investor family member pulled out of the investment, no money coming our way, and intead, with $4000 they did invest, they later insisted was a loan (as another family member), even though it clearly stated in contracts it was an investment. Not enough? I couldn’t get a loan in time and so had to contribute my entire life savings to cover the shipment. My remaining business partner didn’t have any savings, so contributed her time. Did I say ‘remaining?’ A week after the container load arrived, she pulled out, then I found my life partner in bed with someone else, and I was alone in business with a huge personal outlay, a heap of luggage (only 2/3rds any good) and my key sales and admin business partners gone.
What did I learn? I learnt about life (I chose to move states), I learnt about sales, importing, exporting, logistics, banking & finance, publicity, web development, and how to do it all on my own as a single mother. I learnt how to ask for help when and where I needed it, I learnt that “investors” will help in all sorts of ways when they decide its a loan and they want their money back. I learnt the ins, the outs, how to do it slowly, how to develop key relationships, the benefits and pitfalls of networking, mentors, nay sayers and how to run a successful business. I still have this business but have found my passion elsewhere and operate another business too. I learnt to love business and most importantly, I learnt to ‘learn’.
April 29th, 2008 at 4:20 pm
We design, manufacture and install virtual reality systems for oil & gas, mining, defence and government organisations.
We won a job in Melbourne for a government department to fitout a room with our technology. The installation was to occur the week before Christmas, and the job had run so well, that we sent all of the freight out of our WA office nearly three weeks earlier, to ensure it got there on time. (From WA to Victoria takes at most a week)
Well…. the freight company (will remain nameless, but they are big and orange) managed to lose a 4.8m long 200kg box, which contained the entire framework for constructing our system. We had sent three staff to Melbourne who could only do the preworks, and then put in enquiry after enquiry with the freight company, with no luck. We had sent three other boxes (including one on the same shipment as the large one) which arrived with no problems, and on time.
We then had to remanufacture the entire thing and revisit for installation in February, nearly two months over deadline. While our customer was very understanding, the freight company was not. I am still waiting today on the funds from our insurance company.
What this taught us is …. well that sometimes things are out of your control, totally out of your control.
Did the box turn up the week after installation? No! Its still missing!
April 29th, 2008 at 5:28 pm
Wow! Where do I start? One of the biggest lessons I’ve learned is to price things! When I first started I had a $50 membership and was offering a welcome kit - that cost half the membership fee to send!!! Obviously I didn’t think that through… Now I work out how much something will cost me before I offer it free with membership or as a gift with purchase, so I’m not going out backwards.
There are other disasters, including times when the kids have answered the phone (now it’s permanantly on answering machine on a VERY high shelf), replied to emails on my behalf (thankfully I deal with Mums, so they understood), or run an event with kids running wild! It’s all part of the day when dealing with a business mum! hehehe
April 30th, 2008 at 1:22 pm
I was at LookSmart right from the start and it is rightly seen as an Australian Internet success story. Despite its later problems, LookSmart was a medium sized player (and really the only Australian one of much note) during the original dotcom boom.
But it was a company which certainly made many mistakes. One of the biggest was that we loved (because the markets loved) doing BIG deals. Our biggest deal, other than one with Microsoft, was with a certain American publishing and Internet Company. Given their size and apparent value to us, we had to bend every which way they asked. I was leading the product development team at the time and would just refer to it as “Our Vietnam” - a war we had started but could never get out of. The costs to the company to try and meet the demands of this “headline” grabbing deal were phenomenal. And the benefits to the company where almost entirely in the press release itself.
Since then I have become much tougher in evaluating so-called “strategic opportunities” or partnerships. In my experience most of the value will be captured by the big player and most of the pain by the small. The deals always sound much better than they really are, in my experience.
April 30th, 2008 at 6:57 pm
I have one product that I manufacture and sell on a “drop ship basis”. Basically a 3rd party person sells them and I send direct to their customer.
When orders get over 20kg I have no option but to use a courier if I want them to go in one box. So I frantically manufacture this order and ship to the address provided by courier. Because of where I live I am limited to one - yes one - courier company. This courier company doesn’t accept adhoc work so I have to put it through the local depot’s account - no big deal we have done it before.
Then the customer complains parcel is missing. Lots of forwards and backwards with the courier company and the parcel was left on the doorstep! No signature just dumped. The delivery guy decided that he would give himself the authority to just dump it on the doorstep.
When questioning this practice I was told it was against company policy to do so. Here was me thinking courier company all will be ok they will just reimburse. Nope, they delivered and the fine print says at their discretion they can just leave a parcel without a signature. No refund, no reimbursement, nothing!
They did say that the would be happy to deliver the replacement products free of charge, and refund the cost that I have already been paid. But alas no refund and no chance that I will risk my items again with them. Now it is back to breaking down large shipments into under 20kg lots, paying a lot more via Australia Post because at least I know that when I pay for a signature I get one!!
What did I learn? That I can’t use a courier company from the middle of nowhere and Australia Post is more expensive but more reliable.