Continuing from where I left off in my previous post, “Founding in a War Zone”:http://gigaom.com/2007/06/22/founding-in-a-war-zone/: I and my cofounder “Eran Galperin”:http://www.octabox.com/about.html had both just been sent to the Israel-Lebanon border with our Army Reserve units. It was July 2006 and our units were unexpectedly deployed as part of an Israeli military action during the 2006 War with Hezbollah. The timing couldn’t have been worse for us. Our startup “Octabox”:http://www.octabox.com/about.html was in its earliest stages. We had “alpha” customers, and we had code, but we weren’t even incorporated. Uncertain if we’d even make it back to our homes in Tel Aviv, we’d called our customers and told them their projects were “on hold,” indefinitely. They weren’t happy. We did make back, after 25 days of fighting, and immediately took up the challenge of completing our projects on a much tighter schedule.
*We had survived the 2006 War, but we still weren’t sure Octabox would.* It was a challenge to come back to work after a long and stressful month of “inactivity,” to pick up the development we’d left unfinished. It was hard to reconnect with clients who were happy to hear that we were safe, but stilll unhappy that their goods had not been delivered. Our first major challenge was keeping them from leaving Octabox. I’m happy to report that Octabox did survive– and in the end we lost only 1 customer! I learned several important management lessons in the process, and I’ve highlighted them here.
*I. Customers need feedback—constant feedback.*
As I stated before, Octabox lost only one customer due to our absence last summer. We were able to retain all of our customers because we were honest about the situation and gave them constant feedback on our status and their projects status.
Imagine you’re sitting at table in a fancy restaurant and you’re waiting for a waiter to come and take your order. You wait 5 minutes, 10 minutes but nothing happens. You begin to lose patience. All you see are waiters walking across the tables and none of them are looking at you. That’s when you begin to think no one knows (or cares) about your existence and you start cursing your best friend for recommending this restaurant. No matter how much busy waiters or restaurant managers are, a brief look that says “I’ll be right with you” calms you down, indicating someone will shortly take care of you. *This is how your customers feel.*
*II. Don’t Let Fear Mince Your Words, Always tell the truth*
When I was called away by the Army, *I was scared* we would end up losing our customers, our company. We were only half done with our coding projects and cancellation would have meant no more Octabox. It was tempting not to tell our customers what was going on.
The major mistake we could have made, out of our fear, would have been to avoid informing the customer of what our delay(s) were really about, what the stakes of our absece were. You can lie for a few days, telling him that you’ve encountered some “technical difficulties” or that you’re working on a workaround to solve the problem. A) That would work only for a few days and B) you risk losing your credibility if you get caught. And we all know how bad this is for business: *In then end, your credibility is all you have.*
I admire companies with fanatical service support, so instead of taking the “stall route” I opted for the other way and called all my customers to tell them exactly what the situation was.
*III. Take Responsibility…for your Customer and _your Company_*
Telling them the truth accompanied with a *“I will understand if you cancel the deal with us”* really helped. I’ve took the time to explain to them that a cancellation would involve a fee, that they would have to start from the beginning with another web-development firm. That alone was a big no-no for my customers. I was being fair and they knew it. Never hide the truth from your customers, *be fair but assertive,* customers will respect you for this.
I also made sure they knew that I would make it up to them, I was taking full responsibility for the situation even that it wasn’t really something I could control. *Customers like it when you take responsibility.*
*IV. Hold the Customer’s Hand with Contact and Compensation*
Every week, I made sure to call my customers to update them on our status; we usually discussed how we could boost development speed, and what they could do to mitigate losses on their end. Make sure to update your customers every once in a while, this will make them feel like they are in control of the situation, (even if they are not.). Certainty, or the illusion of it, is a comfort to all of us.
When we came back from the war, we compensated most of our customers, with better support terms and extra features at no extra cost. Instead of outsourcing some of our project, Eran took up programming 16 hours a day (!) just to meet the new project schedule. Always compensate your customers when they are unhappy. It is your job to make them happy at any cost.
While these projects turned out to be less profitable for us, the sales leads that these customers still generate for us, tell me we handled the situation successfully. I can only say that the lessons I learned during and after the 2006 War are, all on their own, a great compensation for the loss of money Octabox endured. *Experience is priceless.*
I wanted to start this article with a personal so here it is: While sitting at a burger bar in Tel Aviv with my co-founders, Eran Galperin and Tal Zubalsky, I asked them what they though about my last article: Founding in a War Zone. Tal (Octabox Designer and co-founder) who had just come back from an amazing trip From the Annecy festival (where an Animation movieof his was being nominated) told us a story about how he got interviewed by a BBC reporter at the last day of the Annecy Festival, when suddenly he said “Adam, you know the only thing that really bothers me about your article that it perpetuates the image of Israel as a dangerous and violent country.”
It is important for me to clarify something for readers: While Israel hasn’t been the most neutral and peaceful country on earth, our economy has been experiencing continual growth and the percentage of successful startups compared to our population is one of the highest. I hope my last article hasn’t shed a bad light on my country.