Messing Up with a New Client

By January 15, 2020Uncategorized

We messed up with a new client.

SPARK has been in business for 22 years and in that time, we’ve never stopped learning.

We’ve learned that the reality in working with inventors and startups is that, in most cases, they’ve never done this before so they don’t exactly know what they want. You can lead a horse to water, but then it’s up to the horse to drink the water, so to speak.

Historically, we thought it would be okay to assume these two things in this particular case:

  • Most inventors & startups are small companies; they don’t have large buckets of money to spend
  • Our client wants cost-effective and deliberate results

SPARK always strives to give the client an early sense of what kind of financial commitment their project may require. We walk them through the typical fees you’d pay to a design firm like ours, and more importantly, major capital expenses that are generally overlooked like custom injection molds.

Do you sense a theme yet? Money.

We frankly never ask our clients what they can afford to spend. Our clients, similarly, don’t blurt out their budgets before we even sit down and discuss the details of a project (who would’ve thought??). That said, I may be less shy about a hefty proposal if you show up in a $100,000 car.

SPARK was formed 22 years ago because of a bad experience with an expensive firm. Part of our DNA is cost effectiveness. And before we really dive into this, I’d like to explain how we approach new work at SPARK so you can better understand the problem:

First, we evaluate all of the different “jobs to be done” until the final task is complete. Once these jobs are defined, we then divide the jobs into manageable chunks, both in terms of workload and cost to the client. For inventors and startups, we often find that more research and development is required early on to define a product’s position in the market.

Then, we settle on your design criteria (what you want your product to do). This isn’t the most thrilling step of the process but it’s absolutely critical to building a successful product. Once you’ve defined your design criteria, you can move onto concepting (what are we trying to make?). Concept design is the sexy and cerebral side of product development. In conceptualization, we ideate around how the product will ultimately look, feel, and work in the hands of your end user.

Operating on the assumptions I mentioned earlier — here is where we screwed up with the new client:

We heard from the prospect that he needed to build a comprehensive business plan as part of an effort to get investors (so he must not yet be well funded, right?) on board. So we constructed a proposal that concentrated on defining the design criteria, rough whiteboard conceptualization, and compiling a cost spreadsheet that would give the client good budgetary numbers for both capital expense (tooling) and part cost.

We figured this was data that any investor would need to see in a business plan before funding a venture. It’d certainly make the VC’s feel comfy after seeing all that forecasting, right?

Naturally, we had to do a good deal of ideation around how the product might be built in order to build a strong costing model. However, the ideating was mostly done by engineers (who largely cannot draw) on a whiteboard and let’s face it — white board sketches are simply not professional or acceptable as final deliverables. Plus, it would have cost the client even more to convert those rough sketches into something understandable, so we never even built it into the proposal. We just assumed they wanted the lowest cost option. Money strikes again.

Fast forward a few work days… we deliver the costing model and a couple of industrial design sketches that can be used in the pitch deck or business plan. We feel good about the work. We did exactly what we said we’d do. Does the client feel good? Nope. They’re bright people and all our effort only confirmed some of the pricing models they’d already done (that we did not see beforehand). Is there value in a skilled firm confirming your numbers? Sure. Does it feel like a nice return on investment? No.

The customer’s silence was deafening. They had not paid the last invoice. Clearly, something was amiss and I hate it when a customer is not happy (and thankfully it’s rare).

I called and we had a great conversation. The upshot was essentially that we were too cost-conscious and should have built a more comprehensive report that included comprehensive illustrations of the concepts. They would have been happier with a significantly larger invoice if it meant they’d be receiving deliverables that more clearly advanced their design. They even revealed their current level of funding at the time, and to my surprise, they were much better-off than your average inventor.

Listen, we get it. Due to our small-firm nature, we’re going to treat your money like it’s our own. We’re used to working with these limitations. I trust our team can almost always develop a good solution, even with the strictest of budget constraints. On the flip side, it’s also true that the more a client invests into developing the ‘perfect’ solution, the greater their outcome will be.

This experience urged us to step back and re-evaluate SPARK’s actions. And in that self-reflection we landed on some pretty important takeaways:

  1. We will not make assumptions about what funding may or may not be available.
  2. We will do a better job of laying all options on the table so the client can make an informed decision about how to best spend their funds.
  3. We will never stop learning from our clients and adapting accordingly.

22 years in this line of work, and the only things I’ve found that help avoid situations like this are a consistent display of transparency, clear communication, and making the client feel comfortable asking questions so they know what they’re buying. Anything left up to interpretation is a misunderstanding waiting to unfold.