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A few years ago, Alex Levin said he wasted $800,000 on an advertising campaign for a former employer.
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Now the CEO of a startup, he credits the experience with teaching him how to react when team members make mistakes.
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Levin said punishing workers who make mistakes can deter them from taking risks.
The well-known article is based on a conversation with Alex Levin, co-founder and CEO of Regal, a New York-based maker of AI agents for customer experience. Previously, he worked at Handy, which was later acquired by Angi. This story has been edited for length and clarity.
I try to tell Regal employees that it’s okay to make new mistakes as long as you don’t repeat the same mistakes, mostly because of my past experience of making big mistakes.
Before starting the company in 2020, I was the Senior Vice President of Handy, an online marketplace that connects homeowners with local home project service professionals. I always tell people that my boss at the time, the co-founder of Handy, spent more money on my education than my parents did because of the mistakes I made.
We are launching a new service for handymen and my budget is about $1 million. Our goal is to recruit as many handymen as we estimate we will need. We have to do it in a short period of time, so there’s a lot of pressure and I’m trying to push the team.
The person working on the project did not check a box that would place a daily limit on how much we can spend advertising new services on Google. This person was on a team that didn’t typically use Google’s advertising products, and we ended up spending an extra $800,000 a month for very little return.
Say it quickly
It’s my fault. I’m in charge of checking my Google account, I could have looked at my daily spending and figured it out, but I didn’t. By the time I noticed, it was too late.
I feel so guilty. I wasted the company’s money. I didn’t know if I was going to get fired, but my first instinct was to tell people about it rather than sweep it under the rug.
I asked for some time with my boss that day and when I walked into his office I explained what was going on. I’m sure he was angry, but he took it in stride. Ultimately, we actually exceeded our revenue goals. But if I had caught the error in time, we could have made more money.
The lesson I learned from this experience is that you have to put your hand up when things go wrong so you can quickly find a solution to prevent it from happening again. I always tell people I want to hear bad news as soon as possible. Good news may come slowly. You need to make sure you made a mistake so it doesn’t happen again.
New mistakes are inevitable
Another takeaway is that when you do something that has never been done before, mistakes will happen, and how you react as a leader will determine how risky it is for your team moving forward. If you punish people, they will never take risks. But if you don’t let people make the same mistake twice, you become an entity full of mistakes, and that’s also bad.
I learned that in programmatic marketing channels, you have to set limits. Inventory is unlimited. In some cases, the opposite is true.
Because of what happened, we always set a spending limit on Regal whenever we start using new features. So we worked with an infrastructure provider and just set it ridiculously low, $100 a day.
Soon I plan to do a demo of our product. I was really excited to be in front of potential clients, but it didn’t work. Nothing works. Then I ended the call and asked my team what happened. It turns out we have exceeded our infrastructure spending limits.
When a mistake is discovered, it is not about pointing fingers. You have to figure out a process to solve the problem and move forward. That’s why we now have rules about setting up guardrails, including when to raise them.
Read the original article on Business Insider