It has been more than a year since I have written a Video Husky update but 445 days later, things haven’t gone quite as smoothly as planned.
The four lessons that I discussed back then were:
Focusing outside the organization
Understanding the difference between what we do vs the value that we deliver
Prioritizing holistic alignment over individual progress
Making decisions with perspective
At the time of writing (Sept 2019), everything was booming, as a company, we were pedal to the metal and going as fast as we could to bring on new customers and editors. As you can see above, all four lessons that I learned were about looking forward towards where we needed to go. But here’s the thing, while it’s important to have direction (and I do still believe this is priority #1), unless you have a vehicle that works and the fuel to get you there, everything things start to break and that’s what happened to us.
Fueling the Car
While I want to say that Covid was the reason we hit a wall, it wouldn’t be true. At some point in late 2019/early 2020, we just stopped growing and I had no idea why. It wasn’t obvious at first since we had a few semi-annual commitments come through which padded our top and bottom lines, but once they ran out (which of course happened when Covid hit where we lost 25% of revenue), it left us in a dire position in March and April where we consecutively lost $10k+ each month.
While it sucks when things break, the bright side is it affords the opportunity to do things better and this meant focusing on the one area that I’ve neglected: finances. Thankfully the one lesson that I did learn in the past few years is that it’s better to learn from experts, and that’s when I found CleverProfits who came in and changed the game for us.
Where CleverProfits helped was showing me what a healthy service business of our size should look like financially through their “Perfect PnL” methodology that indicated how much I should be allocating spend in various categories of the business to allow for a 30% net profit margin inclusive of a market-based salary for myself. Through that lens, it became obvious where we were overspending, which while not easy since we had to let go of a number of people, made it simple to decide which areas I should be cutting expenses. Fast forward six months, while we’re not yet perfectly hitting those budgeted numbers, we’re significantly more profitable than we previously were. And that perhaps is the biggest lesson that I’ve learned all year: venture-backed startups aside, it’s not a company unless it’s profitable inclusive of a market-based salary for the founder.
Profit is the fuel for growth and by recklessly spending money and not building a cash reserve within the company for emergency situations or making sure my own personal financial needs were met, I was endangering Video Husky’s future.
Renewing the Parts
As financially things steadied, an opportunity came up to work on an enterprise deal that would involve 30+ Video Husky accounts which would bring in a ton of revenue immediately and bring us straight to profitability. Ultimately, the agreement didn’t proceed and while I’m glad it turned out this way since we weren’t the right fit, it did also teach me a couple more lessons.
The first was what it means to be a Video Husky editor. To make this work we brought on a bunch of new editors as quickly as possible but by rushing the process we delivered extremely uneven results where our standard editors did well but the majority of new editors floundered hard. What struck me about this experience though was the client decided this meant that all Video Husky editors were poor. At the time I struggled with this, especially since we did have a couple of editors do well, but eventually I realized it made sense. When we have a terrible Uber ride, we don’t blame the driver, we blame Uber. In the same way, when a customer hires Video Husky, it’s natural to expect an editor who Video Husky has certified at a minimum skill level. This kicked off a three-month internal review of all our editors and staff which resulted in higher working standards all around,
Rethinking the Driver
The final lesson that I learned in the past 500 days though was understanding who the driver of the car is. In my last post I used a similar analogy where I wrote I was the captain of the Video Husky boat. I was wrong, the customer is the driver of the car, not me.
Obvious as this sounds, it’s taken me a long time to understand this. It’s not about my success, but about helping the person who put their trust in Video Husky succeed. Instead, my role is more akin to the designer of the car – to understand what the driver’s needs are based on where he or she wants to go and build something that gets them there in a cost efficient manner. Given every driver has different requirements though, it’s time to start building something specific, rather than just creating something that’s only average for everyone.
With that, here’s to another 1000 days of Video Husky, thanks for being a part of the journey.