2018 was a crazy year for Craft Wallet. It stopped being a side project of a group of university students and became a full-time job.
At Craft Wallet we design and make premium minimal wallets capable of carrying everything you need. All our products are designed and made by us in our factory in Portugal.
Here are some of the good and bad things that happened to us in the past 12 months:
- sold our wallets to over 110 countries;
- went from Production Hell to Logistics Hell;
- were close to going bankrupt;
- raised over $50K in a crowdfunding campaign;
- sold thousands of wallets through our website and other sales channels;
- accumulated almost 2000 orders in backlog;
- built a factory and vertically integrated production and logistics;
- hired our first employees;
If last year could be summed up in two words, those words would be failure and learning. Don’t take me wrong, it was a very successful year for us, but along the way, we had so many problems that it’s even hard for us to grasp the number of failures we had and lessons we learned in the last 12 months.
Nonetheless, there’s one mistake that stands out. It cost us over $50.000 (when you’re bootstrapping, losing this much money can be deadly) and led to the disrespect of the delivery deadline several times, disappointing thousands of customers eager to try the product.
Thinking that having a working prototype means that the product is ready for mass production and to be shipped to your customers.
This can be a mistake for several reasons. In our case, we had the “luck” of building a prototype which happened to work. The problem was that when mass production started, some design flaws we weren’t able to identify in the prototype started becoming apparent.
To make things more difficult, the design flaws could only be seen in some of the wallets. In the end, 50% of them were working perfectly and the other 50% didn’t work at all and we had no idea why. It was a huge conundrum and we couldn’t make any sense of it but we had to do something. Over 1000 customers had already pre-ordered and paid for the wallet.
We started working on the matter and doing everything we could to correct the flaws. We invested a lot of time and money looking for a solution and had to delay mass production for several months. We found ourselves stuck in Production Hell for 8 months.
Production Hell is industry jargon for a product that remains in development for an especially long time before it progresses to production, if it ever does. Projects in development/production hell are not officially cancelled, but work on them slows or stops.
When we thought we had solved all the problems and were ready for mass production we’d receive feedback from our customers that had already received their wallets saying that a new problem appeared. Every time this happened, we had to stop production, redesign the wallet and change the delivery deadline. It happened so many times that we literally lost count.
When in Production Hell, you solve a problem and another two appear. Our wallet has 11 different pieces and all of them had to be tweaked. All of them. This was a huge drain in terms of energy for the team and money for the startup.
As a consequence of the delay, we had thousands of angry customers whose wallets were taking too long to be shipped. This wasn’t easy to manage because no one is used to wait several months for a product our society takes for granted: a wallet. We asked them to understand and luckily, the vast majority did understand and preferred to wait for a product they knew was different and better than what they were used to.
Financially speaking, this situation affected us in two different ways:
- we had to do several production runs until we found and eliminated the sources of all the problems, burning a lot of cash along the way;
- we lost several thousands of dollars in refunds we had to give to customers who couldn’t wait any longer for their wallets.
This was harsh because, in a bootstrapped startup, cash is everything. We had to be very cautious about where our money was being invested. It was during this time we were the closest to going bankrupt. It was a really stressful and scary time.
Thanks to a lot of hard work and personal sacrifices, the design flaws no longer exist, the product works perfectly, we’re shipping everything and taking orders 💪.
Just because your prototype seems to be working, doesn’t mean that your product is market-ready. Perhaps you were just “lucky” and got that one working. Never rush a product.
When mass producing different pieces, these don’t always come with the same size, shape and quality. Those small differences can be key when you want to make something function well for a long time.
In the end, we couldn’t fulfil the orders until the product problems were all solved. At the same time, we couldn’t take more orders until we fulfilled the ones we already had or we’d be creating an even bigger problem.
This was the main roadblock to our growth.
2018 was a rollercoaster year with lots of mixed feelings. One day you’re the king of the world. The other day you’re feeling like garbage. Nothing new in the life of an entrepreneur. It might seem like a hard lifestyle for most people, but if we didn’t love what we do, Craft Wallet would have ceased to exist a long time ago.
The lessons aren’t only in the business field, but also on a personal level:
- Spending a lot of time doing customer service and managing the anger of thousands of people (some of them rude and making menaces) greatly improved our emotional intelligence and stress resistance.
- Always be humble. It’s worth it in the long term.
- Don’t isolate yourself. Being an entrepreneur is a solitary task. Socializing with friends and family will help you clear your head at the end of a rough day.
We’re here for the long run. The mistakes we make today teach us the lessons that are the fuel for the rockets of tomorrow.