Over-reacting

I have a tendency to over-react. I will give you an example. On or about December 20th of 2017, instead of the up till then normal 30 applicants a month (about 1 a day) for Goto Angel, I started getting more like 30 per day. That's a 30x increase in applicants literally over night (I checked in the morning to find 30 applicants that were not there the night before). My first reaction was suspicion that someone had done me a "favor" and started to advertise on my behalf. I immediately contacted the usual suspects and asked them to please stop it if they had done it. But none identified responsibility, and the next day I had the same level of applicants again. Something had gone terribly wrong!

We should all be so lucky? Not!

Angel to Exit was never intended to be a venture type business. It was designed to be a lifestyle business. I have been plodding away at it for about 2 years now (the first article on A2E.co was put out about 24 months ago), with the idea of setting up my retirement so that I would always have a dozen companies or so taking a few hours a month of my time and paying me handsomely for helping them succeed. That's good money and some potential for more money on exits and working perhaps 40 hours a month - 10 hours a week. Nice retirement concept. Keep my head in the game while still being able to do whatever I want with my time.

My first reaction (who did this to me without my permission?) then turned to light panic as I realized I would potentially have to read through and act on 30 things a day just to deal with the influx of applicants to A2E. And what if this kept getting bigger? This is not an automated process - I actually read these things! So I decided I needed to put more resources on it. But between Dec 20 and Jan 2 there aren't a lot of potential workers out there ready to help out, be trained, and start to go on something that might end the next day. As my panic grew, I woke up earlier in the morning by an hour or so to add the time needed to review the applications on a daily basis (I used to look every few days). Of course by reviewing them sooner I then generated more invitations sooner, which led to more acceptances sooner, so then I added another presentation day to January.

But if I need more presentation days, that means I need more advisors/angels to participate on the calls, or for the existing ones to be on more calls. I don't like asking people for their time without paying them, and asking more people for more time on the bet they will find something interesting to justify the time becomes even harder. So my next panicked response was to reach out to my network of advisors and ask if they could commit another several hours a month to look at more companies.

The list goes on, but you get the idea. I actually thought about scaling the business a year ago and build a lot of automation to help reduce the effort for more companies and make it scale-able. So I had a plan, but even with a plan, I tend to over-react.

Why is this "over"

Many reasonable folks would say that I didn't over-react, but reacted reasonably. But on the other hand, who knew why I got all these applicants right away? I certainly didn't. It could have been an accidental email blast by someone. It could be that people finally read some of the emails and noticed. I had been posting for years. Maybe it was a side effect of some other thing I recently did - starting an incubator. Perhaps it was one of my helpers not telling me they were about to do me a favor. Maybe there was an article I was unaware of.

The point of all this speculation (another panic response) is that if I started spending more money to adapt to the increased volume and the increase turned out to be temporary, I could end up burning more cash and run into a cash flow problem when the applicants didn't turn into clients over time. Goto Angel is already a loss leader for the advisory board service, as is the free content on the Web site. I don't mind investing to find good people to work with. But something about a loss leader is that if you produce too many leads, you can lose a lot! One of my clients in the last few years ended up with a few million dollars of "oops" because volumes exceeded budgets and fulfillment became infeasible or problematic for another reason.

So I tried to find out

Here's the thing. I am willing to scale up by a factor of 30 overnight. I have done it before (from 8 to 250 employees in less than 90 days in the late 1980s), and I may do it again. But doing it on speculation is not something I am willing to do again. I have seen this movie and it does not end as well as you might think.

The unanswered question is "Why?". Why did I all the sudden get all these applications? The "why" can lead to several outstanding outcomes. Most importantly, it can lead to BOTH the prediction of what happens in the next few days, weeks, and months, AND the ability to generate more business under my control by doing more or less of whatever the cause was that produced the effect.

Existing metrics tell me some things:

After all the speculation, I decided to measure. So I asked a few applicants "How did you find out about us?". Here's what I found out:

So I asked further ...

The mystery deepens. Other than the fact that my application process was set to close at the end of December, why did all these folks get this one email from Gust, a company that has gobs of other accelerators? And how did this magically happen all of a sudden on or about Dec 21?

I asked these questions, or rather I tried to, by emailing to the email address that sent out the message. Of course I got a "Delivery Status Notification (Failure)" containing: "Hello fc@angeltoexit.com, We're writing to let you know that the group you tried to contact (acceleratorapps) may not exist, or ..."

The texting application built into the site hasn't responded to my request from the 22nd, (or from 2016 for that matter), so I decided to find the contact information for something that might work, working my way up the stack to the ultimate "info@" email address for generic contacts.

Here is what they replied:

So now I knew enough. I stopped the process to hire new folks to keep up, readjusted my models to reflect the updated reality, and engaged the provider in a discussion of how to optimize my ingest performance. I also decided to set an expiration date of every month so as to produce a cleaner monthly cycle of business for potential applicants (but I did not act on this decision at that time). I finally managed to control my overreaction (in this case).

But the story didn't end there.

Of course the investigative process had its side effects. The only person who ever appears to be interacting with anyone at Gust is the person who got my inquiry and decided to "look into" my incubator. He told me that if I acted to change the application process to reflect the monthly nature of accepting applicants, it would be a violation of the terms of services and he would cut me off. So I naturally responded by clarifying that in the technical sense I have a cadre of companies every month, and that now that he notified me of the requirement, I would have to change it to meet the terms of service - but that if I did change it, he had already told me that he would terminate my account. So what was I to do?

Of course his response was to tell me that he investigated my site and determined that Angel to Exit is not an "accelerator" indicating:

Of course this is pure BS. No complaints had ever been identified to me via Gust, and when I identified that to them, I got the usual no response. And what does it mean "against team members"? We don't have any that I am aware of. But then the terms of service don't identify anything regarding the definition of an "incubator", "accelerator", or anything else. And by the way, every "accelerator" is a 3rd party to Gust, and we are a "principal funder" and "principal program".

But let's get to the real point. I pissed them off by trying to figure out what they did. So the person on the other end decided to be a pain. And of course my "program" was still there!? Perhaps I was suffering from their inefficiency again.

Now here is where others would probably leave well enough alone. Actually, most would have done so far earlier. But then what is this article about? Gust has a phone number (if you look hard enough for it) at 1+212-228-8770 - the corporate headquarters. So naturally, I decided to call to gain clarity around the situation. After all, when you have nothing, you have nothing to lose. Of course I downloaded all the data from my account first. I may be foolish, but I am not stupid...

The support process:

So I called between 9 and 5 Eastern time on the following Monday, and found that I could either dial by name or ... no other options. So I looked up the CEO's first name (David) and dialed the numbers for "dave" and managed to get an actual human (the CEO probably doesn't take his own calls like I do, but then I'm not running a company with millions of people communicating, but I figured at least I could leave a message). I had a pleasant enough communication with her, and I got the email address of a support person (not the person I had been communicating with), and emailed a history of the relevant emails asking in particular:

I was told that they usually get back the same day, so I sent at 2018-01-08 @ 0825 ...

On 2018-01-11 @ 0626 (after 9AM in New York where Gust is), I tried calling again, having heard no response. I got voice mail which I left, and did a resend. "Trying again after no response since Monday." ...

In the meanwhile, I tried to engage with Proseeder and Angel.co to generate leads that way. Angel.co, after some online messing around, managed to allow me to set up some questions but not the ones I wanted and all open answers instead of multiple choice (in some cases this halps me a lot). Proseeder set up a call with a representative for 2018-01-09 to discuss the concept - but that morning before the call, they cancelled the call and told me to schedule again for next week. I did that of course...

I will not bore you

Here's the bottom line:

In summary

At the end of the day, a successful entity needs to be able to control its processes and in the larger sense, itself. More is not always better, and scaling too fast can be a big problem. Ready, fire, aim is generally problematic.

Measuring things is important to business maturity, and getting self control in times of change, while it may lose you some business, is more likely to save you time, money, and improve your business.

I am a big fan of good luck. But "luck favors the prepared (mind)" ["Luck favors the prepared" - Edna (The Incredibles) based on a far older expression: "Chance favors only the prepared mind." - Louis Pasteur Lecture, University of Lille (7 December 1854)]. Be prepared!

Copyright(c) Fred Cohen, 2018 - All Rights Reserved