I’ve literally lost over a million dollars on bad decisions in my career. But I’ve probably lost the opportunity to earn potentially millions as well due to a complete lack of decision making. However, for the most part I don’t regret any of the decisions that I’ve made, it’s the ones that I haven’t made that still bug me. Frankly, in the world of business I’d rather have gone through the process of making a very poor decision than none at all. And that’s exactly what I’d like to talk about today. Let’s start with one of the worst decisions I ever made in my business: one that cost me over $60,000.
Around 7 years ago my partner and I decided that we wanted to step up our game when it came to getting advertisers to come to our sites. At the time we were running display ads on the sites but felt that we could do better. We wanted to get direct advertising deals and we wanted to get deals that were paying considerably more than the ones we had running. For example, instead of just running Google Adsense on our sites that may have displayed an ad for a movie, we wanted to get a direct deal with the movie studio and run a series of ads that could pay 5 times as much. We knew we didn’t have the time to do this. It required building our credibility through having a company website, media kits, and doing constant outreach to the right contacts to even have a chance to secure these deals. At the time we were way too busy with our own sites, content, and operations to undergo this kind of “expansion.” Naturally, the best direction to go was to hire someone to do this for us. Like I’ve been saying all along, if a solution isn’t immediate simple for me, the next best thing is to hire someone who can make it simple.
So my partner and I began our search. One of the things we found out immediately is that the people who were qualified to run this kind of an operation for us cost quite a bit of money. In most instances we were looking at 6 figures and no real prediction on what kind of return that investment would bring us. Given we were very much in the business of predicting outcomes as close to possible as we could, this kind of risk wasn’t exactly for us. While we knew there were no guarantees in trying to undertake this kind of a project, we at least wanted to have some kind of gauge in all of this. So we ended up talking to someone we’d done business with before, someone we didn’t necessarily trust but someone who had made money doing direct pitches and branding. What wound up happening is that this person pseudo pitched us the idea of him doing the job for us. He said that he had connections we didn’t have and that he could get us the direct deals we were seeking. The charge? 5K a month plus a percentage of deals he generated, and he said to expect results in 3-6 months. We decided this was worth the risk. While I’d rather not bore you with the details of the entire endeavor, here are some of the highlights of the results we got by hiring this guy:
- $60,000 out of our pockets and $5,000 worth of indirect deals we probably could have gotten on our own
- Zero progress reports from this guy
- No business plan
- No action plan
- No kind of accountability on our end
- We had a weekly call, that was it (in hindsight this is completely our fault)
- Turns out he was really using our sites for her own personal gain since he owned his own websites and added ours to his pitches
Lessons Learned Here?
First of all, we got totally screwed and should have picked up on it right way. There was no real professionalism here. No contract. It was really just a “wing it” kind of a thing. We kept track of nothing. We kept tabs on no one, and we never really owned any relationships that our guy made. It never really “felt” right and I think my partner and I knew this. But we gave it a shot, and we let it last 6 months because we believed it would take time. However, after a certain point we knew this thing was dead. There are countless other examples of when I’ve done stupid stuff like this but in hindsight it wasn’t stupid at all.
- My partner and I knew we’d never pay a retainer again for someone claiming they could get us ads. We’d pay on performance only. That cut out a ton of bullshit offers we received from people
- My partner and I knew we’d only accept people who gave us detailed reports on progress.
- My partner and I knew we’d only work using an iron clad contract detailing exact procedures and also discussing the transfer of business relationships to us
- My partner and I knew that overall, the price for this type of project wasn’t something we had any interest in at the time. It just wasn’t worth it.
Sure I wish I could have that $60,000 back but all in all it was valuable and here’s why:
What making decisions teaches us
It’s all about the data. Making a decision puts you in a situation where you become a data hound. You find out more and more information as you go. In our example we found out that knowing very little was crippling. But finding out what we didn’t know was the biggest lesson of all. We accumulated more data points and learned about all the things we’d never, EVER do again. That lesson is worth more than the money we lost (I believe that and always will). The more data you get, the less risk that will be associated with the next project you undertake of the same nature. For example, if I ever decide to try and hire someone to get me ads directly, I know EXACTLY what I’ll do to mitigate the risk. If I hadn’t gone through the situation of getting screwed, I’d never know how to approach this again. Of course, yes, I’d like to have gotten it right the first time but we don’t always have that luxury.
What not making decisions teaches us
Nothing. Nothing at all. That’s the point. Not making a decision leads to zero data which leads to no information to base any future decisions on. Not making a decision is inaction and that’s way worse than making a mistake. At least with a mistake we’re learning. There’s nothing wrong with taking your time to make a decision. That I totally respect. But make the decision, one way or another and move on.