Nathan Sykes

March 6, 2021

Adventures In Miscommunication

My micro private equity philosophy is to automate, systematize, and outsource.

It's the only way to truly free yourself from one of your profitable projects.

For the outsourcing bit, we tend to hire business development firms in India, like AskSunday, Outsource2India, or MyTasker. Their teams complete small, specific tasks on a recurring basis - it could be per-order, or on a schedule (per-day, per-week, per-month, etc.). You get the idea.

Put these small, specific tasks together, and you can, piece by piece, outsource the day to day operation of a company. That's what we do at Howdy Interactive.

There's no preparing you for what will happen when you outsource the day-to-day operations of a micro-company to one of these firms. I try to prepare myself the best I could by re-reading a Tim Ferriss essay that I really enjoyed, and recommend to lots of people: The Art Of Letting Bad Things Happen.

One Sentence Summary? Let small things go awry if it allows you to live the life you want to live.

  • Let that one customer win the chargeback if it'll cost you three hours of time to gather evidence.
  • Let a fulfillment center go down in the middle of a vacation if it'll cost you three days of peace.
  • Let emails slip through the cracks if it'll allow you three weeks of peace of mind.

That's all well and good in theory, but in practice?

You might find yourself like me two days ago, sitting with my mouth open in horror as one of these business development firms told me that due to a miscommunication, more than 60% of the recurring tasks that power the day-to-day operation of one of our projects had gone unfulfilled for 5-6 weeks.

I can't put an exact number in regards to the damage it had caused in chargebacks, refund requests, and emails that had not been responded to, but it's easily a $10,000+ USD mistake.

So how's your day going?

We immediately began to dig into what went wrong. We keep extensive audit logs of communications and interactions with all of our firms, and were quickly able to identify the problem.

Every business in the world is made up of smaller tasks. In some cases, it may be hundreds. In our case, since we're dealing with micro-companies that only sell one product or service, there are really only 10-15:

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The person responsible for handling these tasks at the business development firm we retained assumed that because we had placed an emphasis on how to fulfill orders, it was the only set of task that needed to be done at that time. Despite them being trained in all of the tasks on this spreadsheet, they misinterpreted something in one of our conversations that led them to believe that only the 'Order Fulfillment' tasks were needed right now.

I sunk in my seat.

The mistake was mine.

It's the responsibility of the head office in any private equity firm to make sure that the 'trains' of your portfolio companies are running on time. That means communicating to your operational direct reports in a clear and concise way, so they understand what is expected of them.

I had, obviously, not done that.

I can easily chock it up to many things (the first thing that came to mind was "it's harder for someone from India to understand someone who speaks English natively", which was immediately quashed by "well then you should have explained it until they confirmed they understood"), but the mistake is all mine.

Thankfully, we only had this issue in one of our micro-companies, but it's one too many.

Live and learn.