7 Mistakes That Cost Me Over $500,000

What a year! That’s all I can say about 2016, and I don’t mean it in a positive, enthusiastic way. I worked harder, yet earned less than I did in the prior two years, and the hard work was rarely enjoyable.

As I reflect upon the year’s events, I suspect that we netted at least $500,000 less than we should have. This number includes about $250,000 in human-related payments (salary, bonuses, consulting/coaching fees), and at least $250,000 in opportunity costs (missed deadlines, execution fuckups, etc.).

Before I jump into the mistakes, a very brief primer on my business and the state of it:

We sell men’s dating and self-development advice – ebooks, online seminars, etc. – using direct marketing.

That means we spend money on ads, drive visitors to our sales websites, attempt to convert some percentage of visitors into buyers, and then attempt to convert some percentage of buyers into repeat buyers. Our revenues have been into the eight figures for the past few years.

We’ve wanted to move into other markets since late 2014, while still serving our core men’s self-development vertical, which is a perfect segue into the first mistake.

#1 – Letting A Problem Simmer For Too Long

Tech has been both a big enabler, and the Achilles heel of this business. Because of some tech decisions I made, we’ve been able to do things that others in our market haven’t. Yet the cost of those decisions has been greater complexity… which demands more talent, management and money.

Our tech worked pretty well when we had our first big hit product. It survived the launch of our second product. Then everything went to shit. And this was back in 2014!

Rather than re-evaluate our tech and our leadership, I plowed ahead with more products and marketing. Yet tech problems continued to simmer, and occasionally boil over. I was trading long-term strategic growth for short-term income, and here we are two years later, and we still haven’t moved into new markets.

#2 – Loyalty Shouldn’t Be The Primary Reason To Keep Someone Around

The guy who was leading tech had become a good friend of mine, and I trusted that his intentions and interests were aligned with mine. We were loyal to each other, and that felt really good.

I kept making excuses for him and for tech. I hired a coach for him. I pushed him to give me a budget and ask for resources. I spent a lot of time trying to understand and dig into the problems… time that could have been spent on any other growth activity.

If I’d been more clear-eyed about it, I would have begin looking for new tech leadership in early-mid 2014. But loyalty skewed my perspective on reality.

I still believe that this guy is a great person who always had my best interests at heart. He just wasn’t up for the job, and I didn’t want to accept that until it was blindingly obvious.

EDIT: my friend Dmitry, another successful entrepreneur, made a comment on Facebook in response to this post. It’s a subtly different, but profound take on this point:

#3 – Full Time Employees > Coaches and Consultants

In late 2015, I hired a coach/consultant to help us with tech. Then I hired a consultant to help with data and analytics. Then I hired a consultant to help with brand development. With the money I spent on those guys, I could have had some incredible full time employees. Or a Lamborghini Huracan.

In fact, the ONLY coaching investment I’ve ever made with a real ROI was with David Garfinkel, who taught me copywriting (and arguably, that investment paid for all the rest of these guys!).

Hiring FTE’s is more of a commitment than coaches or consultants, and not every hire works out. But I can point to a small number of full-time employees who’ve been with me for over a year (and in one case, over five years!) as the enablers of my success (and whatever “genius” I bring to my business).

#4 – Onboard For A Clear Strategic Reason

Sometimes you meet someone and think “man, this person is fucking smart… I really want to work with them.” Or at least, I do. It’s a great feeling that can lead to poor decisions if you have money.

Several of the consultants I hired, and a few employees, were hired under this pretext. They had a set of skills that loosely aligned with something that I kind of wanted to do in this business, and I really liked them (and still do!)

But the hiring wasn’t proactive. It wasn’t driven by a strategic plan. It was more like, “oh hey, here’s this person I want to work with, let’s amend the strategic plan to fit them in.”

Yet I’ve found that the only time I succeed is when I plan to win. It’s like… “we’re gonna do this fucking thing, and we’re gonna win, so let’s figure out how, and keep at it until we win.” Everything else ends up failing, or being a diversion.

#5 – Hiring When You’re Needy

On the flip side, hiring when you’re needy is all sorts of bad. It’s like going to the supermarket when you’re hungry or dating when you haven’t had sex in a month. My worst two hires this year – and possibly ever – were hired under these conditions (the neediness, not the lack of sex!).

One was a Marketing Manager. We’d been without one for months, and we wanted to get the position filled quickly, so we only interviewed two candidates. Our winner lasted for all of three months, but I knew I wanted him out after two days on the job.

The other was a new VP of Engineering. We’d been collecting resumes for months, re-listing the job, bumping the salary… we were starting to feel desperate when we finally started getting decent resumes. We narrowed them down to three, and our #1 and #2 choices took other jobs. That left us with #3, who was an even bigger disaster than the Marketing Manager.

The best hiring I’ve done has been proactive, and is often done before I think I’m ready to fill the role. It’s a leap of faith, but it gives them time to learn the ropes and shape the role.

#6 – Not Trusting My Gut On Hiring

My friend Mark has a great article called “Fuck Yes, Or No.” It’s about dating, but I think it applies just as well to hiring.

The best people I’ve hired, I’ve liked… right away. The first time I talked to our COO Chris, or our Customer Happiness Manager Amy, or our current tech lead Robert, it was awesome. I still remember getting off my first call with Chris, and saying to Marina, “man, if all the candidates are as good as this guy, this is gonna be a hard decision.” They weren’t, and it wasn’t.

Good vibes have to be weighed against everything else – the resume, the references, the interview, and the need. Good vibes alone aren’t a good reason to work with someone. But bad vibes are an immediate reason to say no.

The aforementioned Marketing Manager was a genuinely good guy, and for that reason alone, it gutted me when we let him go. But from the first interview, I knew he wasn’t a cultural fit. We never “gelled,” so our work – and the role – suffered for it.

The VP of Engineering hire was like… an instant fuck no. I almost ended the interview after the second or third thing out of his mouth, and man, I sure wish I had done so!

In fact, we had written him off until the other two candidates took other roles, but revisited (out of neediness, of course). His resume was great, and we were shocked by how highly his references spoke of him. So hire him we did. And we’ll all look back on two months he was with us, with the grim humor that good teams adopt when they’ve survived a disaster together, and lived to tell the tale.

#7 – Making Vague Compensation Promises

We were lucky to re-fill the Marketing Manager role quickly, with a friend of mine who’d been doing project-based work for us. He threw himself into it, and I was ecstatic. A few months in, we began a “skunkworks” sort of project – just me and him, many late nights, and lots of Longboard Lager.

During the initial working sessions, I made a vague promise that he’d get a bonus if we finished the project by October 1, and left it at that. It turns out that what I had in mind for the bonus was about a sixth of what he had in mind, and that “finishing the project” meant different things to us. When October 1 came around, he came to us with his deliverables, and expectations for compensation… and I literally choked on the banana I was eating.

Chris and I worked to bridge the gap with him, but he couldn’t overcome the feeling of being taken advantage of, and he resigned in mid-October. We lost a great team member (and of course, it wasn’t ideal for our friendship).

That’s not the first time this sort of thing has come back to bite me. Over drinks one night at a club with my first Marketing Manager, I threw out an idea for a new comp plan for him. It was a throwaway thought for me – and a very generous, good-vibes-induced one at that. But he held onto it, and it poisoned (and greatly lengthened) all of our future compensation discussions.

It should be obvious, but since I was dumb enough to make the mistake multiple times, let’s just be blatant about it: don’t mix drinking and compensation discussions! And more broadly, don’t make compensation promises until you’re ready to be specific about what they are, and what it will take for someone to hit them.

So How Are We Still Profitable???

It’s amazing to me that it’s possible to fuck up this much… on such big things… and still manage to make millions. I think that the things we get right – our copywriting, our products, our customer support, and more recently, our operations – have been enough to compensate for all the mistakes. But just barely! March was the first month ever that this company lost money, and our current profitability has more to do with expense management than it does with expanding our revenues.

It leaves me with a lot of respect for guys like Travis Kalanick or Reed Hastings, who’ve built much bigger businesses, and been embattled on much larger strategic fronts. And it makes me incredibly thankful for my team and our customers.

Make no mistake – there’s a big vision and a strategic plan, and tech is the current bottleneck. But we finally have some great developer talent on board. And I put all of our big product and marketing initiatives on hold, to give the developers space to rebuild our core tech. I’d rather that we “walk and chew gum at the same time,” so to speak, but we’ve gotten tech wrong for long enough that I felt it was worth the sacrifice. Based on what we’ve rolled out so far, it looks like it will be… but let’s see how things are looking in mid-2017.

Hopefully you’ve taken something away from this, and if you’ve got any fun and costly mistakes worth sharing, I’d love to hear them.


About the author


Currently running a business, traveling through South America, taking some photography, and loving a woman. If you like looking at pretty things and people, you might like my photography.


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  • Maybe it’s time you moved over to mobile app of your current products and made it easier to access…. But you’re a smart guy so maybe it’s not as easy as I’m thinking it is lol

    • Hey Alberto, yeah I’d love to have a mobile app, it’s a common request. But we’ve failed so hard at some of our “core” tech that I don’t feel ready to take that on. Hopefully in 2017!

      • No app needed, go mobile! We have exactly what you need. If you have 10 mins for a screen share, I d be delighted to show you our platform. BTW love social man too! Please email me. Cheers!

  • I’m curious to what the tech challenges are, as your business seems fairly straight forward, in the sense that you are selling digital products to a relatively small audience. What do you need full time tech employees to work 6 months on? Not trying to be a smart ass, just genuinely curious :)

    • Haha yeah Ben, I’d have thought so too. It’s not like we’re building self driving cars or exoskeletons :)

      The biggest challenge came with managing all of our websites. We have a lot of sales websites, and we have a lot of landing pages on each site, and we (endeavor to) run a lot of A/B tests on those sites. So one site like GFAS can end up having 20+ different landing pages, some running tests, etc.

      The problem arose because we were just copy/pasting code from one site / landing page to another. Sometimes this meant that bad code got copied over, sometimes it meant that images weren’t updated, etc. And the big problems arose when browser tech started to change. For example, some browsers support Flash video autoplay, others don’t. So we ended up with six sales websites, 5-20 landing pages on each, and lots of little things breaking. And that’s just for the TSM stuff!

      Quite often, the difference between making money and losing it is a difference of .02% conversion rate, so getting this stuff right matters. The new team just launched a new funnel management system that centralizes all of the code, connects each sales site to the cart, email systems, and member’s site, etc. Running well so far!

      Thanks for the q!

  • At least you’re making money. I got sick working at a prison, and thought I could just bounce back and move on. At one point I was riding my bicycle in the cold, rain etc. to sell stuff at the flea market to make cigarette money, basically. Maybe it sounds corny, but the emails I get from Social Man, have helped me keep going. One thing I can do well is come up with catchy domain names. So far I haven’t been able to scrounge up enough money to develop them. thanks for the emails, slowly some of the articles, have helped me to keep going.
    Wish I could do websites good. My helibee.com looks like crap, otherwise I would be happy to collaborate with you;or help with your business. I’m just not good at websites.

    • Hey Joel, thanks for sharing man… stories like this make me feel very humble and thankful. Hearing about your efforts to just… fucking survive and make it… it’s really inspiring. I’m launching something in the new year that might be particularly helpful for you, outside of the “Social Man” brand… but I will be announcing it to the TSM list. Can’t say too much other than the initial are “MB” – keep an eye out, because I’d be happy to have you join it for no cost. Just shoot us a message when it launches, it make sure to screenshot this comment.

      Thanks for following along, and thanks for inspiring me with your efforts.

  • Want to say it’s really inspiring hearing you go into some of the things going on “under the curtain” in your business. Just shows how much really goes into these systems on a high level. Without putting the cart before the horse, it’s a lot to look forward to. I’ve made a lot of mistakes both professional and personal the past year, which is frustrating – time is short, and most of them were made simply by failure to execute. But the main consolation of all the pain is that lessons are learned on a visceral level. Judging by this post (and your history), you’re learning and adapting fast to your errors – which is better than most of us. I have no doubt 2017 will be a bumper crop for TSM, as is deserved.

    Enjoy your travels and keep showing us all what living “the good life” looks like so we can continue to aspire to it ourselves.

    • Hey Pat, I wish I could say that I was learning faster from my errors… in fact, slow learning is one of my greatest weaknesses. It takes me like 2-3 big mistake to learn the lesson, which isn’t so bad when you’re ten, but isn’t ideal as an adult. But hey, self-awareness is the first step to self improvement, right? ;)

      Thanks for the support. I’m always inspired to see you pursuing your goals independently, here’s hoping it’s a good 2017 for both of us.

  • Super Valuable post, brother. I notice a huge part of this is around hiring, and I’m drawn back again to the truth that anything great that you accomplish in this world happens with the help of others. I’m re-reading this and taking notes.

    • It’s always people… and it makes me wonder what I don’t understand about the alignment of people and strategy. Maybe Eben has something to say about this? ;)

  • Hey Christian,

    Are you up for a quick demo of our platform? Get your first campaign for free! No mulla to get started and check this out, this is just a snippet on how we can get you better ROIs on your marketing dollars……Text “Socialman” to 48421

    FYI that name is secured in our platform, nobody has access to it now excepts us. Cheers! Text me if you like and if want to see more of our strategies. 619 894 5119

  • Very genuine and insightful.
    I have a pretty similar infobiz to yours (in the French market). I totally relate to the hasty and vague promises a bout compensation i came to regret. Did this over and over.
    Same thing for hiring when needy (made this mistake in september, guy was gone in december). Or trusting your gut when hiring. That has almost always worked way better than any complicated “expert” method.
    It’s going to be interesting to follow your blog and your transition to more “grown-up” products ;)

    • Thanks for your thoughts and for being here Boris. I’m convinced that there’s some “secret sauce” that very successful entrepreneurs don’t discuss (and possible aren’t even aware of), which has nothing to do with funnels or copywriting, and much more to do with strategy, organization design, and of course, trusting your gut.

      Good luck in the year ahead, and yeah, let’s see what happens.

  • Jonathan – thanks for sharing this. It’s awesome to see that the business is still doing really well for you and your candidness in sharing the learning broadly will help many.

    Your products make a huge difference for a lot of dudes (e.g. Joel above).

    One resource to look at is the book Who. It has made a huge difference for loads of businesses that I work with.

    Keep being awesome and changing lives Jonathan.



    • Thanks for the kind words and the encouragement Darrell, always a great reminder.

      I did read Who, and believe it or not, followed it for some of the hires. But it goes to show you that even if someone ticks all the boxes on paper, there’s no substitute for gut instincts.

      • I have been on a Board of Advisors with an executive recruitment guru – David Perry. I just received (yesterday) his book “Hiring Greatness” and it’s a powerful read. The interview approaches are intense – and aimed at larger companies – but some powerful lessons to be learned.

        Be awesome brother!

  • “We sell men’s dating and self-development advice – ebooks, online seminars, etc.”I looked for your ebooks on Google books, no results, where can I find them?thank you.

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