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What I learned expanding my studio and failing miserably

With more work than I could handle myself I expanded my business, hired staff, and shot for the stars. Then it all came crashing down.


Feral was supposed to be something different. A small design house with a big heart, working on behalf of small businesses as close, creative partners. In the end, the vision wasn’t enough. The idea crumpled in on itself, bringing the studio and everyone working there along with it. Here’s what I learned.

Picture of the feral team

Failure is far more instructive than success

While I never formally went out of business, it felt that way. I had made a commitment to my new coworkers that we would be successful, hell or high water. We weren’t, and no amount of goodwill could change the fact that two people I cared for lost their jobs. The impact of that hit me in a way that made the past three years of success seem like a lucky fluke. Success has a way of confirming what you already believe to be true about yourself. Failure tells you’re your shit and rubs your face in the evidence. For me, failure completely shifted how I approach risk and make decisions. Today, I am far less trusting of my intuition and operate under the assumption that I could very well be wrong about how I’m perceiving the world. Sometimes an event needs to be sufficiently traumatic to prompt serious and lasting change.

Prepare to be exposed

Starting a new business is a pressure cooker. In business, when you’re working at a smaller scale and doing well you can essentially hide your flaws. If you make a mistake, you can afford to pay the price and move on. That price is never that high anyway. When you expand, things change. Decisions, even seemingly small ones, become crucial. The numbers are bigger and you are pushed well outside your comfort zone. For instance, a single mistake in bidding a large project can sink you. Or taxes, never ever forget about taxes.

While it may not happen immediately, the process of expanding a business will reveal your weaknesses and naturally exploit them. All of us craft images of ourselves in our heads, imagining how we would handle hypothetical situations and maintaining confidence in untested abilities. Over many years of consistent and expected success, I had thought that I was just different. That I had some kind of golden touch and no matter the odds, I would rise to the occasion. What happened was anything but. Being tested exposed me as a poor manager, overly optimistic and naïve, who made decisions quickly and intuitively, without due diligence.  As I would later read in Daniel Kahneman’s “Thinking Fast and Slow,” the skills that make me a great creative handicap my ability to make slower, more rational decisions. It’s not that I can’t make them effectively, it’s that I need to be more aware of the possibility I could be making a mistake. I need to go slower.

Expect to lose money for the first six months

Shortly after I had hired my first two employees, I was spending time with a client talking about how my studio was expanding. We chatted for a while and then he said something like, “I hope you have enough money saved up, because you need to be prepared to lose money for the first six months. It’s likely you won’t even be able to pay yourself for a while.”  Needless to say, I was taken aback. I expanded because I had too much work to do and the newer work I was getting had a higher price tag. I fully expected to be making more money, lots more. Yet months later, after the third pay cycle in which I couldn’t afford to pay myself, I had to admit it. My client was right.

Looking back, working on bigger projects in combination with new employees introduces a number of new unknowns, all of which that come with price tags: the price of doing the work, the amount of expenses involved, the efficiency and productivity of your talent. If you’re not right with all three, you can easily lose money. And I did. At the end of the day, it was the main reason I had to shut everything down.

Necessity makes you prone to unrealistic optimism

As the situation grew more financially precarious, I found myself expecting events to unfold in perfect sequences. When planning work, I would assume that everything would go as planned. Of course, work, especially creative work, never does. Unfortunately, if I had been honest with myself I would have had to have faced the harsh reality that things weren’t working. I denied that reality for as long as I could until it smacked me in the face.

Managing contractors is not the same as managing employees

I manage other freelance creatives for much of my living. I am very good at it. That said, freelancers are contractors and contractors, by definition, are brought on to a project to manage a specific piece independently. For the most part, they own it. Employees on the other hand are there to act on the instruction of their employer. The difference is fundamental.

Employees require exponentially more day-to-day involvement. Starting off, they are not as productive as you anticipate and they are not there to own projects independently. They need regular guidance. If you’re not there to give it, you’re failing them and the company.

Without your processes in place, forget it

Having worked independently for years, all the specific processes I followed, from starting a new project to debugging a website, were in my head. I completely underestimated how crucial these processes would be, and how impossible they were to implement mid-stream with a new team on ongoing projects. Processes are instrumental in both guiding efficient work and developing a company culture. I thought I could lead these processes myself, but I should have ultimately had them written down long before I began working with a new team.

You have to charge more for work

If you have a current client base comfortable with your pricing, raising prices to support your new enterprise can raise eyebrows and cause tension. In the case of my biggest client at the time, it lead them to take their business elsewhere. They just didn’t see the value. If you want to raise your prices you need to be able to make a thoughtful, well-supported case why. It’s not something you can or should assume will be tolerated, by your clients or the market.

If any one client represents more than 40% of your work, watch out

You should never be in a situation where you cannot afford to lose a client. In these circumstances, you have no leverage. If a client wants to bully you on price, they can. If you want to take a controversial stand on work that you believe in but might risk your relationship, you can’t. It’s just not a good situation to be in.

Truth be told, as many service-based agencies will tell you, having balanced income from a large number of clients is difficult to achieve. If you have a set capacity and you do good work, it’s likely you will eventually find a client large enough to make use of a large portion of your available output. Just be weary. The ice can be thinner than you think.

Your business must be your life

To be successful you have to be the first one there and the last one to leave. Studies have shown that many small business owners work six days a week, often 60 hours or more per. When you’re leading a business, your personal life: the relationships, family, hobbies, they just seem like unnecessary luxuries. The stakes are too high for yourself and more importantly, the employees that depend on you. Ultimately, this sacrifice wore on me. As weeks dragged into months, I found myself enjoying my job less and less.

You may just not like it

While I failed, part of me was relieved. Ever since college, I had always expected to start my own studio someday, and when I did I expected to not only be successful, but love the role. While Feral didn’t flourish, the experience gave me enough of a taste of the lifestyle to know I wasn’t ready. I love being a freelancer, working with small clients and, surprising as it may sound, making less money.  The role lets me work intimately with people and without overhead to worry about I can always make decisions in the best interest of the project.

Fortunately, both the employees that I worked with, Spencer and Ximena, were able to find new jobs that they enjoyed. The work we did together hopefully helped launch their careers; I wish them the best. It was an amazing, weird, and unexpected few months, but every day was memorable and all the people involved were classy and loving. As for me, I can’t help feeling a bit like a failure, but I know I’m happier for it.