I’ve 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. I’m 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, that’s a simple question with no simple answer. In a nutshell it’s 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 I’ve always needed to try to time one project’s start date to coincide with another project’s 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 hasn’t really been a problem historically because I’ve 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 can’t say that I didn’t 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, I’ve tried a number of different strategies to try to work our way out of this problem. As examples, I’ve hired sales people, I’ve worked with third party lead generation companies, I’ve sponsored conferences and contests, I’ve given away prizes in raffles, I’ve invested in public relations, I’ve invested in social media marketing, I’ve increased the amount of professional networking I’m doing, I’ve 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 we’ve 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.
We’ve also had other various challenges that I don’t want to get into too far. But, as an example, we have had clients who didn’t want to pay for project management or quality assurance. And, some clients – even those whose entire company depends on their custom software – that just don’t 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, I’ve had a lot of people who were unbillable. I’ve had some people working on internal projects while we waited for an appropriate project to come in. I’ve 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. We’ve never been cash rich at Alagad and without cash flow the end was quite apparent.
In the interest of taking full responsibility, I’ve got to be honest with myself. I’ve made compromises and decisions that were probably not the best. My defense is that I’ve always tried to provide the best service to my clients and to be the best employer I possibly can. I’ve simply tried to take the dream of being my own boss and push it as far as I can. Really, I’m an art student who taught himself to be a programmer and I’m a programmer that taught himself to be a business owner. It’s inevitable that mistakes would be made.
What am I concerned about today? I’m concerned about the people who were depending on me that I’ve let down. I’m concerned about the families of the people who worked for me. I’m doing everything I can to take care of these people, but they’ll 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, I’ll 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. I’m going to continue to seek out new work and I’ll grow my staff back up as these projects come to be. However, I’m going to focus on running the company a bit differently. I’m going to avoid taking projects that seem risky or short sighted. Instead, I’ll focus on the clients who understand our approach and who appreciate it. I’m 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 I’ve ever had – go. This has been tremendously difficult and painful. But this isn’t the end for me or for Alagad. After all, failure leads to success.