There are rarely any flawless companies in the world. There are even fewer companies that are honest with themselves and their stakeholders.
Sourceasy started in March 2013 as a sourcing solution for customers who are fed up with opaque procedures, problematic quality, high prices and inconsistent delivery performances.
We’ve done close to 45-50 orders so far this year. Although we’ve had some spectacular successes, we’ve also had a number of sobering failures.
Unfortunately, We have not been model citizens ourselves. We too have been guilty of breaching our clients’ trust, making excessively optimistic commitments, not setting customer expectations, and letting trusted friends down.
Until I can set up my blog on the Sourceasy website, I felt I should write about what has *NOT* worked for Sourceasy in 2013, before, like all inconvenient truths, this too gets brushed under the carpet.
While its easy to commend successes and write about them with your chest puffed out, humiliating yourself and calling out your failures in public is traditionally frowned down on.
What if your prospective investors are reading this?
What if your potential clients are reading this?
What if your possible employees / partners are reading this?
To Them I say:
We are awesome because we learn from our failures. And because we accept that we have been inadequate, miserable and have failed at retaining some of our clients.
We have made significant strides forward in terms of orders booked, orders completed, infrastructure developed, supply chain capabilities created and new territories explored.
We have created strong new competencies, have perfected our business logic and have eliminated issues from our client servicing.
That we are still learning how to say NO to customers.
That we shall grow nevertheless and still make mistakes in 2014.
That we shall not be arrogant or aggressive about our errors. But we shall be repentant and humble.
That our team shall grow, and be awesome in 2014. And we shall deliver some world-changing services and products in 2014 that will change the way private label sourcing is done globally.
In a way, this post is also about resolving what went wrong so we can learn from those mistakes in 2014.
eCommerce Company: Ladies Underwear
We got a personal reference to meet in May with one of the fastest growing private label underwear websites in USA to manufacture ladies underwear for them. It was not a simple product but we were confident of delivering a quality product at a strongly competitive price.
We got the order in August. Delivery was promised in October. We have finally shipped Product in December.
We grossly underestimated the time it would take to set up the fabric quality; the time it would take to find a suitable vendor; the learning curve it would take to set up manufacturing in a new country; the ability of a local partner to find solutions to logistical issues; the cost of solving all these problems. And worst of all, we over committed to the client and failed consistently.
In the end, our referrer is upset because we were unable to deliver on time; Our client is upset and thinks we are incompetent / novices; Our budget spiralled out of control; We lost a lot of credibility.
Personal Friend: Custom Corporate Polo Tees
A friend of mine runs a mobile services company and was launching a branded product of his own to complement his services. As a friend and a fellow founder he asked me to make Tees for his team and his clients. We met in July to discuss concepts, ideas.
The plan was to make a small batch of Polos and then make some exclusive apparel for his team and clients.We agreed on artworks, sample quality, and received a deposit in July. Plan was to deliver a sample in August and production by end August. We were unable to ship a sample till September, it was rejected, we changed vendors thrice, we ordered fabric that lay in our warehouse for 5 weeks till we found the right factory to sew the goods. And above all, we lost the faith of my friend.
So much so that when we did make and deliver the goods, despite how good they looked, he was so upset with us that he called them “Tees for Drivers”
We messed up by taking a custom manufactured Tee order which we did not fulfill on time. We lost a friend, a supporter. We lost some money also.
Website Referral: Custom Printed Tees:
We received an email enquiry in October from a new client who wanted to switch from his existing supplier for custom Tees.
We worked out pricing and I went to meet him. We promised samples in 5 days. We failed. We got a new Tee vendor and thought we could save the client. We couldnt get both colors he needed in time. We got an email asking for a status update. We said we would deliver immediately. We couldn’t
Chances are we’ve lost this client. It was not too tough, an easy win with our existing T-Shirt fulfillment infrastructure. But we still goofed up badly and lost a valuable client.
Hiring Errors, Mistakes and Setbacks
As Mark Suster wrote in this blog post, Startups must hire A players who punch above their weight class, have the right attitude, are always ready to learn, without defining specific roles.
As an experienced Journeyman Entrepreneur Founder, I was supposed to “Always be Recruiting”, “Not Over-Selling” and consistently be motivating the team with the right news, and give performers whatever they need to get the job done.
Well, I did almost all of these wrong in 2013.
I’ve almost never had good fortune with Co-Founders. I quit my father’s business, I got cheated by my next 2 junior partners, I shut down a business I started with another friend, and the last partner I had, made me sign over my half of the company when the 1st transaction showed a loss of $5,000.00.
Not really inspiring. However, I’ve always been optimistic and positive about working with Co-Founders, Core Team Hires, Employees and Partners. I try to be easy going yet be diligent about deadlines. I try and be supportive but not intrusive. But, even then almost all the team decisions I made in 2013 sucked.
I started Sourceasy with 1 customer in March 2013. I did $40,000 in sales before I realised it could be a strong scalable business using software to lower entry barriers.
I then scouted for partners but the operations end of the business got me bogged down for almost 6 months before I was ready to find a tech partner. In the interim, partners lost interest, monetary considerations took precedence and while business chugged along, it became tough to raise money without a tech co-founder.
So I concentrated on getting business. By August, I had found Samudra, who had just quit his Startup, and agreed to be my tech CTO to build the product. I promised him a modest salary and hoped that our product would be out by mid-November.
We felt that with his information architecture, and product design, we could hire a junior dev to get us over the line. I parallely hired an Ops exec to work part time to understand the business before we brought him on fulltime.
But along the way, family health issues forced Samudra to find a job for purely financial issues. My decision not to apply to 500Startups and not being ready for UnPluggd took a toll on the morale of our young Execs.
By early December, we were back to Square 1, with 1 dev having left and 1 Ops exec not willing to join full time. What I learnt is that inexperienced team members need a constant supply of good news, good money and high octane achievements to keep them productive.
We went back to contractors and with Samudra now part time, we are building our 1st cut of the product with a friend / supporter who is experienced, freelance and extremely entrepreneurial.
The task in 2014 will be to launch at the earliest, find a full time Dev to maintain the product and scale our team front end and back end.
And to afford great salaries.
I hope this was not too much of a rant and could be of help in identifying issues early stage startups experience in their 1st year of operations.
We’ve been lucky in that we’ve had steady sales and revenue to support us. I shudder to think what we’d have done if we didnt have any revenues to shore up our problems.