5 Years I Have Wasted Co-founding a Web Agency
When my partner and I founded our web agency, I was a 20 years old eager boy that wrote spaghetti code and with no experience on how to manage a Company. Nevertheless, we started our adventure. Now, after almost 5 years, we eventually grew to a team size of 6 people.
Unfortunately, our web agency was not particularly profitable, most of our income was spent into hiring.
We finally decided to close down our business and I would like to share the mistakes we made and the most valuable lessons we learned during all these years.
Most of the time when clients want to work with us, they often come up with a vague idea of what they want without a concrete list of functions and features.
Client: “Hey, I want a booking website that let visitors know we are selling a premium service, sort of a grand feel.”
Me: “No problem, what kind of functions and features do you require?”
Client: “Umm…I don’t know, I guess just a site for visitors to book rooms.”
Without a comprehensive scope of work, we issued a quotation and begin designing and developing. After several meetings, confirmation of wireframe, mockup and months of work, this is what we got.
Client: “Your design is so ugly, it doesn’t feel right…Look at the Four Seasons Hotel website, I like it very much, can you make it look like it? Also, their site have these functions, why we can’t we have them?”
Me: …(Why don’t you tell us you like the Four Seasons, and why aren’t you telling us how you feel about the site in the past few months)
This sort of thing happened at our agency all the time and resulted in us going back to planning and designing which wasted lots of man-hours.
We used to trust our client in knowing every aspect of the project which led to poor communication with client.
Client: “Hey! How’s the android version? It’s delayed for many months already. Are you guys working on it or what?”
Me: “Android version is already released in Google Play Store, haven’t you download and check it?”
Communication is key when dealing with any client. You have to assume they know absolutely nothing of the project and it’s up to you to provide a detailed report, follow up and project update as frequent as you could. Be sure to take minutes and confirm with client afterwards.
Scope creep for free is a huge problem and it prevents the project from ever ending. It might happen innocently during a casual phone call with our valued client that we’re willing to go above and beyond to keep them happy.
Keeping them happy made us unhappy. New features and enhancement were added to the project scope constantly, meaning we had to spend extra effort in testing and bug fixing while keeping our project income unchanged.
We tried to fix this problem by introducing additional charges on tasks that were outside of the original project scope. We also ensured that clients were aware of these charges before they signed the quotation.
But it didn’t work for our clients. They wanted a lump sum amount when they signed quotation and were unwilling to proceed knowing there may be extra costs when the project progress. This is actually understandable cause no one would like to see their bills to skyrocket.
However, with inadequate planning and scope break down, we could not proceed to fix this problem.
This is the biggest mistake by far. At the time, we used to think we should take as many clients as we could as they mean money, right?
Absolutely wrong. Aside from capacity issues, some clients are just horrible. If you had a client that wanted to get things done quickly, cheaply and good, you knew you were fucked.
Horrible clients could be categorised into the following:
When a client couldn’t afford, we tried to offer a “low-end” service as to match their budget. But this didn’t translate well into a lower expectation of the product delivered.
Client: “The website design is awful, why can’t you design a better one?”
Me: “We didn’t design it as it’s not included in the quotation, you said you’re low on budget so the website is designed by your in-house graphic designer.”
Client: “What do you mean by not included? When you take our project I expect you put 100% work here. It’s unprofessional of you to speak of the price.”
Me: “…Okay, give us a week. (Mistake #3)”
When a client doesn’t know what they want, they often ask for an “all you can edit” package, demanding unlimited free edits. It may seem justifiable when they said:
Client: “I don’t know what I really want. How about you start working first, and we can feature them out on the way”
Me: “Okay but we have to charge you extra based on the additional works we’ll do for you.”
Client: “This is not okay for me, I can’t estimate the total project cost if you charge me this way. How about you calculate all the works you might have to do and bill me a lump sum?”
Me: “Okay. (Mistake #1 and #3)”
1 year later when the project is long overdue and you thought the project was about to complete…
Client: “I don’t like material design, change it to flat design.”
Me: “What?! Fine, okay.”
Client: “Also, I think the overall experience is not okay, I want to add in-app live messaging and push notification.”
Me: “But…”
Client: “My friend said blockchain is good shit, we should add it to the app. Do you think we have rooms for AR? It seems neat. Ohh I almost forgot, my wife said we have to support WhatsApp & iMessage stickers, it’ll grow our app target audience like crazy. What do you think?”
Me: “…”
It took us a long time to realise we are undercharging for our work. We used to think our team size is too small and unwilling to charge a premium.
Until recently, one of our ex-employee, now working in a local leading web agency that has over 20 staffs, told me that their technology stack is just not as good as ours. Their code and execution is just rubbish. So don’t be afraid to charge a premium if you are confident in your agency’s skill set.
Without knowing what our clients want and blindly signed them up is fatal. It’s a feedback loop, you signed more horrible clients up, you earned more, you expanded your team, more capable to work on larger project size, and then signed up even more horrible clients.
Ultimately we became overwhelmed by many never-ending projects. With our agency not particularly profitable, there’s little incentive to keep it running.
So that’s it, say goodbye to our little web agency.
5 Years I Have Wasted Co-founding a Web Agency
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