How I Failed in Business, Part One
Previous Entries in this Series:
The following is not a cautionary tale, or even an instructional one. It may be amusing, so here it is.
I was sitting in a cafe, sipping chai, staring at the letter in front of me. Outside the window, in the gathering evening darkness, the afternoon’s few snow flurries were definitely turning into a blizzard. A blast of cold winter wind blew in whenever someone opened the front door, ruffling the pages.
It was a notice of assessment from the federal government. My company owed the government $3,453 in back taxes. I was not the accountant. Owen was the accountant. I was supposed to be creative director. But Owen had fucked up. Money we had thought we did not have to pay, we did have to pay. The problem was that “we” had no money. Our business chequing account had $304.10 in it, all of which was owed back to our creditor, aside from the $24,000 we still owed him.
I had just come from our office, where we had what would become our last company meeting. Two hours of back of and forth discussion yielded nothing. No plan. No agreement. Just mutual acknowledgment that we were screwed.
Operation Smooth Landing, my name for our careful plan to unwind our business and go our separate ways, had become Operation Crash Landing. The question was whether we would be able to walk away unscathed.
It may not actually be the best idea to leverage your competitive advantage. Hear me out here.
Let’s say you like to draw. You’ve been cartooning and sketching since you were a young child but, unlike most people, you did not leave art behind when it was no longer a graded subject in school. Instead, you kept on drawing - getting books on drawing out of the library, stealing time away from homework and extracurriculars to draw things out of your imagination, and sketching on every piece of paper lying around. It’s your passion, and by the time you’re out of university - Bachelor of Arts (English) because while you’re not enough of an idiot to get a Fine Arts degree (nor would your parents cosign the student loans).
You get out of school and hit the job market, not sure what you want to do, but sure that money will be required whatever it is. You look at all those jobs saying 3-5 years office experience and despair, until you hit upon the solution: temping. You apply to an office temping agency, ace their skill check (turns out speed reading Excel for Dummies is something few applicants think to do), and rapidly get a series of boring placements. It’s not that the jobs are hard; it’s that they are not. Still, every manager you work under remarks at how much better you are at your work than the other temps they have had. You keep getting extensions, in one case doubling a six month stint into a year. The money, while not grand, is decent - $20-25 per hour take home after the agency’s commission (in early 2010 dollars). The agency, needless to say, is very happy with you.
But something nags about all this. At one point you are working in Human Resources for your city. Your job is to review sick times for a group of call center employees. Having become an Excel wizard in your previous jobs, you know how to program macros. This skill, which you acquired pretty easily and naturally, is apparently some kind of office superpower. Like a superhero, however, you need to keep a secret identity: mild-mannered, cheap but presentably dressed office drone in sight of the manager, super productive Excel hero when out of sight. This proves to be a mistake, as you turn two hours of work out of seven and a half per day, into ten minutes of work. Per week.
You’re still drawing in your free time, and increasingly in your ridiculous amounts of free time at the office. You haven’t sold anything, but you’ve given your pieces to a few online magazines. As one does, you’ve set up a website to display your work.
With your ridiculous free time you are also reading a lot: fantasy paperbacks, horror short story collections, essays on art, graphic novels, and blog - lots and lots of blogs. Including, fatally, a blog on how to make a career as a freelance graphic designer. Maybe you could do what every successful person you’ve ever met has told you and your generation to do - “do what you love and you’ll never work a day in your life.” It sounds so attractive, enjoyable, so much more dignified than simply making money.
Freelancing sounds ideal - make your own hours, choose your clients, and use your free time to work on your art. Maybe you’ll get good enough at drawing that you’ll be able to sell your art full time, and leave the freelancing behind.
So you walk up to the precipice and make the leap. At the end of your contract with the city, the temp agency calls you with a new assignment. You try to brush it off, but then claim, in a fit of hubris, that you have “clients” waiting for your work. The lady at the agency tries to insist, saying that you’ve been specially asked for because of your reputation, but you persist.
The bridge burns beautifully as you walk away, lighting up the night around it. You warm yourself on the flames, certain you’ll be able to light another fire soon enough on the trail.
The preceding is, in essential outline, my story up to my entry into business, with writing in place of art, Philosophy in place of English, and the addition of a Masters degree. Also being married.
My being married is a crucial part of this story. My wife had, just before I started freelancing, been able to turn her own temping into a permanent position with the provincial health authority. When we got married, as I was finishing my Master’s degree, she had said that if I wanted to pursue a doctorate she would be willing to support me. This had been the catalyst for my leaving grad studies - doubts about the future are one thing when you’re single, but how could I ask so wonderful a woman to support me pursuing something so ludicrously unlikely? Now I was calling in that offer, on the idea I could make more money more easily than I ever could in academia.
My first two years went okay. I made about $7,000 the first year, and $15,000 the next. Not an auspicious beginning, but something nonetheless. I found my clients primarily through networking, which I proved (to the surprise of everyone who knew me) to be quite good at. The secret I found out was to treat it as helping the person you are meeting. You don’t go into every interaction at a conference or business meetup with the intention of selling to everyone you meet. Rather you go in with the idea that you are there to help them. You are developing a network of contacts, and once you’ve collected the cards and said goodbye you’ll go home, look through your LinkedIn contacts, and connect everyone who can benefit from connecting. Many of these will come to nothing - a brief exchange of messages then radio silence - but a few will be fruitful for both people. When the connection is fruitful, both parties remember you - “oh, we met through this writer we both know.” Eventually, someone needs something written, doesn’t want or isn’t able to do it themselves. and they remember you.
I charged $75 an hour because I read this was the going rate. Sometimes I made many multiples of this per hour, as for example one client whom I wrote biweekly email newsletters for at $800 a piece. Each piece took me an hour to research and write, and maybe thirty minutes to proofread. That’s $800/hour only if you discount how long it took me to find this client. I never had the heart to do that math and maybe self-protectively never kept track of how long I spent prospecting/networking/cold emailing.
Though honestly I wasn’t spending that long at the prospecting. Jim Collins wrote, in Good to Great1, that a business process setup is like turning a one ton flywheel: at first you can barely make any progress turning it. But little by little, by Newton's laws, each unit of effort expended starts to move the wheel, till eventually its moving so fast that you can't run quickly enough to add momentum to it. I was never willing to put in more than two hours per day, if that. The rest of my time bled away in watching YouTube, reading (often business or economics books, which I told myself would be helpful), or going for long walks.
Incidentally, the “art” I planned on doing while I was freelancing, essays and short stories, dropped completely out pretty soon after I began freelancing. Turns out “doing what you love” for work can kill the desire to do that that thing for anything but pay. See psychology research (replicated research, that is) on how extrinsic rewards displace internal rewards.
My networking skills were paying off, with clients both giving me work and referring me to other people to do more work. My primary contact through all this was Colin.2 Colin had been a managing partner with the management consulting division of one of the Big Four accounting firms. Before that he had been an Assistant Deputy Minister in the provincial government. The man was charismatic, persuasive, and had contacts galore. He took a shine to me, and became one of my mentors. I became his source of unpaid labor - contributing write ups, essays, and other things to publications of his Advocacy Group/Social Network, the Technology Council (henceforth TC). TC existed to advance technological diversification in our province, which was heavily reliant upon a volatile commodity sector. To promote this, TC maintained an email newsletter and held regular conferences bringing together business, government, finance, and academia to discuss ways the province could diversify and, in particular, take advantage of its decades long investment in its public universities. They were pushing their personal flywheel harder than I ever did, for longer, and had some things to show for it. Most notably a world leading advanced materials center at a leading provincial university.3
Colin held what he called “seances” every Friday at a posh hotel bar near the municipal airport. These were discussion and networking seminars. After I met Colin I had a standing invitation to attend these. Sometimes, contract work came out of them. Mostly I just met a wide array of colorful characters - entrepreneurs, scientists, bureaucrats, software developers, and one con artist. Out of these diverse gatherings Colin would put together teams for whatever scheme he had in mind.
This was the early 2010s, and interest in cloud computing was exploding. Several major blue chip companies had partnered with Colin’s TC and the provincial government to put on a cloud computing conference, and I was given the (unpaid) opportunity to be the shows A/V director. We would live stream the conference - in this part of the world, at that time, it was a novel idea - which would be held jointly in the province’s two major cities. In this way I met Paul and Owen.
Paul and Owen ran a small (i.e. just the two of them) media co-operative together. They made recordings of conferences, award shows, and other events, and produced short corporate films and documentaries. Owen was in love with the idea of co-operatives as an alternative to our “fascist, corporation-governed capitalist society.” He never actually said these words, but I pieced together his views from his t-shirts. Paul was on the same wavelength as Owen, but two decades older, with lots of audiovisual and event production experience. Together, we would realize the livestreaming of the event.
Cue a month of long hours, late nights, and endless walks (I had no vehicle, and was impatient with the city’s intermittent public transit, so I would walk everywhere). I neglected my own writing to help our on this great project, certain it would lead to recognition and future opportunities. I researched the history of cloud computing and wrote informational slides for the intermissions between panel discussions and keynotes. I helped edit together the loops of video that would play, and wrote content for the event’s website. And I helped write content for our social media marketing campaign to promote the event.
On the morning of the first day I got to the hotel conference center where the event would be held early to learn from Paul that all our efforts had produced a grand total of two live stream ticket sales. Disappointing, but we were going ahead - after all, that we had done it successfully mattered more than anything, not how many people had watched what we did.
The event went off with very few glitches. I managed communications between the two sites, informing Paul whenever there was a loss of audio or video connection. I had never done this job before, so I just pretended I knew what I was doing. This proved quite successful, as no one knew what I was supposed to be doing, and believed I was doing it well.
A few weeks after that event, Paul and Owen bought me dinner and asked me: did I want to go into business with them? This was a good time to ask me: I had been contemplating partnering with a graphic designer, certain we could get more work together than we could apart. And these guys had been in business together for two years, they had done a number of impressive things, and they wanted to work with me.
I said “Yes.”
More on this at a later date.
An interesting book full of what is probably good general advice on running a corporation, even after factoring in that most of the companies he features as outstanding performers proceeded to not substantially outperform the market (and indeed substantially under performed it) in the years following its publication.
Note: all names of real people have been changed.
Which ultimately proved to be a disappointment. What was intended as an industry-academia collaborative effort was captured by the academic interests (who, after all, were staffing the thing) and ended up pursuing non-commercial but publishable research. Technology transfer, as so often happened in the province, was stillborn yet again.
Excited to hear the end of this story... is quite instructive