Clients chasing white whales

Thursday, October 16, 2008, 4:41 AM
Business by John (Article #228)

First, fair warning... this is a bit of an aimless musing...

One of the hard parts of business is that you do, in the process of conducting business, for relationships with your clients. It is hard, to be blunt, because on a long enough timeline the survival rate for all businesses drops to zero. It's hard to watch a business start listing to port.

One of the things that has long fascinated me about business critters is what defines them against other individuals. In this particular individuals case, what fascinates is his unrelenting intent to pursue his current website project, without regard to its failures. A lot of money has gone into the project. And it has been through multiple design firms.

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But, the industry it is in renders it all but white noise. The idea factory is there, but the budget just isn't. And even if the budget were there, the niche it occupies is hardly a niche -- the site's competitors are spending millions a month while he's worried about thousands a years.

In short, it's a bad deal all around.

But, for some reason, he wants to give it one more push.

This is, of course, what people who mathematically model human behavior call The Gambler's Dilemma. The Gambler's Dilemma goes like so:

1. He is in the hole.

2. He got in the whole by spending.

3. He must spend to get out the hole.

Ouch. Bad spot, huh?

In the stock world, they deal with these things with what they call a "stop loss". A stop loss is an order to withdraw from a particular holding should the value drop significantly. The basic premise of a stop loss is that most bad situations get worse, and therefore wisdom dictates you recover what remains of your money before you lose all of it.

It's hard for people to do. Aside from the money -- and the money issue is less considerable than you would think -- there is the personal hurt. You didn't risk wealth and reputation with a plan to get your ass kicked. It's hard to confront others, because business -- especially businesses that require selling -- are all about the mojo. If you don't have your mojo, you have nothing. It's a bad spot to be in.

But, what becomes really worrisome is if the gambler has money left to attract soothsayers. It's an even worse deal. If you pay cash, it isn't hard to get positive reviews from employees. Every idea is a great idea if someone is paying me to make it great.

I am at the stage where I worry about what they guy will do when the money runs out. The last time we talked money, it was clearly an issue. So, what happens then? Hopefully, this is the first sign a stop loss is coming. He needs to retain his remaining wealth to preserve his first business.

Remember the moral of Moby Dick: if you chase your white whale beyond the horizon, don't be surprised when it kills you.

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Welcome!

Wonder where to start with your web design business?

This blog follows along with my efforts to build and grow a website design business, Pro Content and Design.

The goal of this blog is to fill in blanks that may be empty as you get your business rolling.

This blog, particularly the source code section, is not intended for beginners. If you are not comfortable with databases, Ajax, DOM objects and other advanced methods, I strongly suggest you go take a look over at W3 Schools before even reading -- let alone tinkering with -- any of the code here.

I hope this blog has some value to web designers as they attempt to get their businesses going.

Good luck, and happy reading.

Thank you,
John Crawford
Pro Content and Design