Ive done a number of hard things in my life. But, what I had to do last Friday ranked right up near the top of the list. Im sure that, by now, rumors are swirling in the community of developers that use ColdFusion, Flex and related products.
To just come out and say it, last Friday I had to let just about everyone at Alagad go. This includes Scott Stroz, Chris Peterson, Layne Vincent, Kirsten Fering, Matt Legrand, Ezra Parker, and Vicky Ryder. Pretty much just my family survived.
Why did this happen? Well, thats a simple question with no simple answer. In a nutshell its because business has been slow for quite a long time and one thing led to another. Historically, we have had a number of small projects that would last three or four months for one or two developers. Parallel to this, we would also have larger projects that would last several months with three or four people working on them.
The way the company has been structured required me to try to keep my team as billable as possible. That means that Ive always needed to try to time one projects start date to coincide with another projects end date. This is further complicated by fact that two projects at Alagad were rarely the similar. Some needed smaller teams, or larger teams. Also, if a project went long for whatever reason it would impact the subsequent project.
The thing is, most of our projects, especially the larger ones, had a very long sales cycle, sometimes a year or longer. This hasnt really been a problem historically because Ive just hired employees as work started. The thing is, about a year and a half ago the economy started the current down turn. When that happened the new leads essentially dried up. Without leads, after a year or so we began to experience real tightness in the company.
Now, I cant say that I didnt anticipate this. The fact of the matter is that I knew last year that we were in trouble and I communicated this to my team. At the same time, Ive tried a number of different strategies to try to work our way out of this problem. As examples, Ive hired sales people, Ive worked with third party lead generation companies, Ive sponsored conferences and contests, Ive given away prizes in raffles, Ive invested in public relations, Ive invested in social media marketing, Ive increased the amount of professional networking Im doing, Ive attempted to start new business offerings, and more.
But, for the most part, these have all failed for various reasons. For example, the PR firm I was working with was unable to convince my customers to allow me to talk openly about what weve done for them. Also, sales people are very difficult to find because Alagad produces essentially anything for anyone in software. How do you find potential clients for that?! Other initiatives have failed due to being short on money or simply not trying for long enough.
Weve also had other various challenges that I dont want to get into too far. But, as an example, we have had clients who didnt want to pay for project management or quality assurance. And, some clients even those whose entire company depends on their custom software that just dont understand the nuances of how software is created or best practices. How do you convince a client that reporting issues via email and tracking them in their own spreadsheet is not the best option for managing their projects? What do you do when your two options are refusing to service a challenging clients or paying your payroll?
As a part of all of this, Ive had a lot of people who were unbillable. Ive had some people working on internal projects while we waited for an appropriate project to come in. Ive had other people working with me to help me build and grow TaskForce. But, when another major project came to a close last week without anything to follow it up, I had to finally take a hard look at the business and decide what we were going to do.
Maybe, just maybe, I could have stretched this out another few weeks. But this would have been seriously risky. To put it simply, payroll at Alagad averaged about $45,000 every two weeks. Weve never been cash rich at Alagad and without cash flow the end was quite apparent.
In the interest of taking full responsibility, Ive got to be honest with myself. Ive made compromises and decisions that were probably not the best. My defense is that Ive always tried to provide the best service to my clients and to be the best employer I possibly can. Ive simply tried to take the dream of being my own boss and push it as far as I can. Really, Im an art student who taught himself to be a programmer and Im a programmer that taught himself to be a business owner. Its inevitable that mistakes would be made.
What am I concerned about today? Im concerned about the people who were depending on me that Ive let down. Im concerned about the families of the people who worked for me. Im doing everything I can to take care of these people, but theyll need support from the Adobe developer community as well. Let me state that they are all top-notch people who are very smart and get things done. So, if you know of employment opportunities, please contact them! If need be, Ill happily make any connections I can for these people and they all come with the highest reference from me.
What am I concerned about in the future? Well, I plan to try to rebuild Alagad over the next few months and years. Im going to continue to seek out new work and Ill grow my staff back up as these projects come to be. However, Im going to focus on running the company a bit differently. Im going to avoid taking projects that seem risky or short sighted. Instead, Ill focus on the clients who understand our approach and who appreciate it. Im also going to try to continue growing the TaskForce service offering.
So, yes, the rumors are true. Alagad has been gutted. I had to let seven wonderful people some of the best and most supportive friends Ive ever had go. This has been tremendously difficult and painful. But this isnt the end for me or for Alagad. After all, failure leads to success.
Comments on: "Failure Leads to Success" (9)
Sorry to hear about the Alagad downsizing. Good luck to all those that were let go. It is tough on everyone when something like this happens. Clients are also having a tough time and finding ways to cut back. I wish all of you well.
I feel for you Doug, I know you’re a great guy always trying to do your best by client and employee.
I also feel for the guys you’ve had to let go, but all I can say is that someone else will benefit from the time and effort you have put into these guys.
Being on this side of the pond, there isn’t much I can do but if I do hear of anything I’ll certainly let your guys know!
Again I feel for you all, and wish you all the best in the future.
Sad post. I have faith that you will survive. Making the hard decisions like this and remaining in the fight shows strength. Keep it up!
Wow…really sorry to hear this news. With all the good news coming out of your shop, I really thought things were going well. Here’s to some better times and new clients.
I know this has got to be tough for you, and I wish you all of the best in getting everything sorted out and back up and running! As a former business owner myself, I’ve been down that road so I know where you’re coming from.
If you think any of your team may be interested, I just posted a CF job opening on my blog last week (http://www.cfgears.com). Feel free to pass it on to them and have them get in touch with me if they have any questions.
I’m sorry to hear about that. For what it’s worth – your are right. I’ve had to do the same thing in the past. I am really excited to have just learned about your product Coldbooks – I know I’d really like to learn more about that!
Thanks for the support everyone. For what it’s worth, we’ve already been able to bring back some people and we closed a couple projects this week. So things are getting back on track a bit. We’re also taking this period as an opportunity to change how we do some things such as project management. So, all in all, it’s a terrible thing to go through, but it’s also a bit opportunity.
@matthew If you need a hand with ColdBooks let me know. It can be a bit challenging to get going with at first and I’m happy to help as you run into problems.
Keep trucking along doug…we have 9 more months of recession then things will get solid again…. (at least thats what I have been saying for the last 2 years)
This is sort of an old post, for some reason just showed up in the CF Bloggers aggregation RSS. That said, I am sad to here of the first issue and glad to here some things have gotten better.