I had more customers than I knew what to do with. People were talking about me. Everyone knew my name. And they all were showing up—money in hand. They were ready to buy.
I wasn’t really selling. I can’t call it that. Because this was too easy. All I had to do was let people know about my product, and they just came.
We don’t like to believe the saying, “if you build it, they will come,” but in this case, I was living the dream.
Until it all came crashing down.
To be clear, I didn’t lose millions (that’s another story). But my first business came to a grinding halt. All because I was successful.
My success had brought me too many customers—and I was having trouble meeting needs. My success had brought me competitors—and I was having trouble differentiating. And in the end, in an effort to keep up with demand, I spent too much money on my supplies—and was left holding on to too much inventory.
Talk about failure.
My fourth startup built a code generator leveraging some IP out of Europe that was able to do things in a completely different way than how things had been progressing in the US.
Instead of generating stubs and class files, it could create the entire business logic—in several different languages, on several different architectures.
All the education in the world couldn’t get us the traction we needed. I spoke at conferences. I created demonstrations. And I worked with top tier consulting companies to demonstrate its power to their enterprise clients.
We didn’t get the traction outside of Europe and we closed it down.
At the time, I thought that was the worst way to go. Failure to gain traction, failure to generate a return on our investment. Failure on all fronts.
Success can hurt more.
The problem with success is that unlike failure, it’s deceiving. See, in our fourth startup, it was clear we weren’t getting traction. We could decide how much to invest. We could decide what conferences I should or shouldn’t attend. We could decide (and did) when to close things down.
Success doesn’t give you those options. At least not in the same way. Success teases and invites you to grow.
Now I’ll be honest. That first business, the one that success killed, was me selling Now and Laters at my elementary school. I bought the pack for a quarter and sold each individual candy for the same price.
And as demand grew, I invested more and more into resources and supplies. Until I got too much attention, the school shut me down, and I was left with more candy than I’d ever received on Halloween.
You think I’m the only one that fails at dealing with growth and demand? Not true.
In my masters program, we played the MIT management simulation, The Beer Game. Every single student (and these were all managers and executives from respected enterprises) screwed up.
And as you read about the simulation, which is a supply chain exercise where growth keeps happening, managers regularly overshoot in their decision-making.
How does this relate to WordPress businesses?
Every few days you hear about one company or another hiring more people and staffing up. And I’m not talking about a specific company. It’s not just one. Tweets, blog posts, and Facebook are filled with statements that everyone is hiring.
Presumably, these companies are facing so much success that they just have to grow (the similarities to the Beer game are frightening).
But what doesn’t get talked about is the long-term consequence of rapid growth. Because it’s easy to overshoot.
If a company grows rapidly, so does its monthly revenue requirement (unless you don’t plan to pay staff monthly). And as the revenue requirement becomes large, you have less and less choice about what projects you take on.
The result? You end up taking on the kinds of projects that weren’t part of the history of the company, and the staff you hired aren’t as excited (or skilled) for these new projects. And you suddenly face attrition issues.
And you didn’t see it coming, because you were having success.
I’m not talking about a WordPress company here. I’m talking about one of my other startups. Where we grew rapidly, hiring twenty a quarter. And then had to keep everyone employed.
We were excited about the large deals we were doing. Until our revenue requirements (and our need to keep driving organic growth up) meant we couldn’t just enjoy our product business, but instead had to really push our professional service business as well.
And the big deals took longer to close. So we started looking for any small ones. Just to fill the pipeline. And we lost alignment.
I then spent a year letting almost two hundred people go. And it was maybe the worst professional year of my life. Way worse than the two years of failure in my fourth startup.
Think about that. Success can kill you faster than failure.
So learn the lesson of the Beer Game—which is that time delays can mess with decision making. Hire slowly, because it takes time for feedback to bubble up. Gather analytics for better forecasting. And don’t make moves in fear or stress.
Are you watching Range?
The other night I spent a few minutes with Pete Mall, one of the partners, and we talked about the massive hiring going on in the WordPress community. I knew we shared several things in common (a passion for travel, enjoying fine restaurants, etc.) but I discovered we also shared this perspective in common.
It’s better to stay small and nimble—being particularly selective and slow about hiring—because it protects you from overshoot while giving you the most freedom to pick projects that are both interesting and profitable.
I suggest you keep an eye on them.
Anyone else have a story about too much success leading you astray?
Chris Lema is the VP of Software Engineering at Emphasys Software, where he manages high performers and oversees product development and innovation. He’s also a blogger, ebook author and runs a WordPress meetup in North County San Diego. His coaching focuses on helping WordPress businesses, or businesses wanting to leverage WordPress.