I had big plans for Learn & Master Golf. It would be our first non-music project. It would be far bigger and better than anything currently available. It would make learning the game accessible to everyone. The concept made sense to me. Golf is a highly lucrative market and its instructional videos do well. Ours would be a full course on golf instruction; step-by-step learning complete with assignments and benchmarks for teaching yourself the sport on fifteen DVDs. It’s what we do.
It was also a big mistake. Sometimes my best laid plans are just plain wrong.
Nearly a year after we’d started, I had to make some tough decisions. First, our golf instructor, though a top PGA professional and fabulous coach, was not a skilled author. He believed passionately in the project, but sometimes heart isn’t enough. After a year of wrestling alongside him and even assigning him a fulltime writer/editor, we still didn’t have a completed script. Even still, we might have kept trying if not for the second problem…
By this time we had developed more sophisticated market testing methods than we’d had when we started the project. The new data indicated strongly that L&M Golf would not sell well through online marketing – the only kind we currently do. We were already way behind, our budget kept ballooning, and we hadn’t even started production yet. The biggest costs still lay ahead, and now the data indicated that we’d be unlikely be recoup them. We were beating a dead horse, and now there wasn’t going to be much of a prize at the finish line anyway.
So given all this, canceling the project should have been a no-brainer. Easy call, right? Not exactly. Our instructor had relocated to Nashville for the project. Various members of our team had already invested months of sweat into it and had become emotionally attached. Some fought back tears at the very suggestion of canceling it. Hearing that months of hard work might be for nothing isn’t easy. We’d invested nearly $100,000 in company resources, and we really wanted it to work. Classic sunk cost fallacy.
And of course there was my pride. Canceling Learn & Master Golf would mean admitting I was wrong. Dead wrong.
Of course, I did cancel the project. Better to be wrong than stupid. In the end, my team didn't argue too much. Their initial disappointment (and mine) was soon accompanied by a certain sense of relief. We could finally focus our attention on projects that were working. And now, thanks to those focused efforts, we have nearly completed Learn & Master Ballroom Dance months earlier than we would have otherwise. And, of course, it's only taken me three months to talk openly about my failure here.
A “never quit, no matter what” mentality is often a sign of strength and courage. Other times it’s arrogance. Don’t sink your team’s ship because you’re too proud to admit you started it off in the wrong direction. Change course.
Monday, October 20, 2008
Friday, October 3, 2008
Thriving in Tough Times
A number of people have asked lately how the credit crunch and economic slowdown have effected us at Legacy Learning Systems. The short answer is, we’ve felt the effects, but we’re doing fine. Here’s why.
1. Cash Reserves. I’ve done the build-it-fast-then-crash-and-burn thing. It sucked. Bad. I’ve since realized I’d rather have my company be successful than be successful fast. We have intentionally kept our growth in check and built up cash reserves instead of plowing all profits into pursuing break-neck growth. We certainly haven’t taken on debt to pursue growth. Some might call that overly conservative. Those people have never lived on corn flakes with water.
2. Debt Free. I hear there’s a credit crunch. Good thing we don’t need it. See #1.
3. Privately Held. Although we’re profitable and growing, thanks to the sagging economy we are going to miss my sales projections for this year. Big whoop. Few besides me even knew what those projections were. If we were a publicly traded company, there’d be hell to pay, regardless of our profitability.
4. Ramp-Up. It’s our good fortune to be in ramp-up stage. When you're young and growing fast, an economic slump just means you grow slower. For example, we are now selling fewer copies of Learn & Master Guitar than this time last year, thanks to the economy, but our new product launches have more than made up for it. I can take no credit for this. It was just fortunate timing.
While bad for many, economic slowdowns always benefit someone. Usually, it’s the conservatively run businesses that win in times like these. Regardless of size, un-leveraged companies with cash and no debt are going to win. They’ll hire great talent on the cheap, build their product lines, buy or crush their competitors, and position themselves to win big when the economy turns again.
We hope to be one of them.
1. Cash Reserves. I’ve done the build-it-fast-then-crash-and-burn thing. It sucked. Bad. I’ve since realized I’d rather have my company be successful than be successful fast. We have intentionally kept our growth in check and built up cash reserves instead of plowing all profits into pursuing break-neck growth. We certainly haven’t taken on debt to pursue growth. Some might call that overly conservative. Those people have never lived on corn flakes with water.
2. Debt Free. I hear there’s a credit crunch. Good thing we don’t need it. See #1.
3. Privately Held. Although we’re profitable and growing, thanks to the sagging economy we are going to miss my sales projections for this year. Big whoop. Few besides me even knew what those projections were. If we were a publicly traded company, there’d be hell to pay, regardless of our profitability.
4. Ramp-Up. It’s our good fortune to be in ramp-up stage. When you're young and growing fast, an economic slump just means you grow slower. For example, we are now selling fewer copies of Learn & Master Guitar than this time last year, thanks to the economy, but our new product launches have more than made up for it. I can take no credit for this. It was just fortunate timing.
While bad for many, economic slowdowns always benefit someone. Usually, it’s the conservatively run businesses that win in times like these. Regardless of size, un-leveraged companies with cash and no debt are going to win. They’ll hire great talent on the cheap, build their product lines, buy or crush their competitors, and position themselves to win big when the economy turns again.
We hope to be one of them.
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