This article was based on Episode #24: Andrew Kemendo’s “big bullies the small” story that fascinated not only us but also Our Beloved Host, Morgan Friedman. Please watch the complete episode here!
“They don’t care about how that works, they just assume that it’s gonna work.” – Andrew Kemendo
When you were younger, have you ever been bullied by someone who was physically larger and stronger than you? In any school, it’s a common scenario to see larger students bullying little ones. Adults aren’t exempt from this. However, you’re less likely to witness it in action.
But have you ever wondered how this concept, the big bullies the small, looks like in the business industry? If you don’t have any idea, you should listen to Andrew Kemendo’s story of how his small company was bullied by a big and well-known agency that became his client.
This client-horror story started about six years ago. Andrew was the CEO and the founder of a small company called Pear. What Andrew’s company does is that they have a suite of tools for computer vision that other people could use to build augmented reality experiences.
If you’re not familiar, augmented reality is where you can view digital objects and make them look real using a phone or a tool. Sometimes, you use a headset like the Microsoft HoloLens or some other ones that have come out. So basically, their company is trying to create a real experience for their client using technical tools. There are a lot of concepts when it comes to augmented reality, and Andrew’s primary application was for home furnishing.
Take note that six years ago, maybe in 2014 or 2015, just a handful of apps could achieve what his firm does. Few high-quality apps for Android or Apple smartphones were available to allow users to digitally design furniture in their homes.
For example, you want to buy a huge lamp, but you are uncertain if it will fit in your living room. So, all you have to do is open that app, take the measurements of that lamp, point it directly to where you want to place it in your living room, and look if it will fit. This was what Andrew’s company was selling, and they already claimed it on the market that their tool could provide the best experience for AR home furnishings. Even though Andrew’s company was still starting, they still had a lot of clients who wanted their tool.
But at the end of 2015, a huge retail company approached Andrew. This company was included in the top 30 largest retail companies in the country. This massive company approached Andrew and told him, “Hey, look, we want to do something with augmented reality. We’d love to get a proposal from you to say how are we building an augmented reality app for us and do a demo, not just a demonstration but like a beta test and roll it out.” This was the moment where the big bully met the petite nerd.
1. Be cautious around huge companies
Ultimately, if you are well equipped with experience like me, I could definitely say that this is a yellow flag. Working with someone three times as powerful as you is already a yellow flag because when things go sideways, your power would not be enough to turn the tables on them.
The power level of Andrew’s company and this massive retail agency is so disproportionate. Even if you always have an optimistic view of things, you cannot deny that an enormous company could easily harass and abuse small companies. However, business is all about taking risks and grabbing every opportunity that you can. In Andrew’s case, it was hard to say no to a massive company because their company needs recognition, exposure, and of course, money.
So going back to the story, the big retail company approached Andrew and asked for his help. Andrew was thrilled about this, and he gladly accepted the offer. However, Andrew suggested a better approach than what the client requested.
Andrew told them that instead of building a new app for them, they would enhance their app by doing a web-based capability. His reason is that many people already have many apps and don’t want to download more. There is a much higher chance that people that already installed their app will use the upgraded one.
Andrew added that this upgrade is not really that augmented reality they could ideally experience on their phone. This upgraded version is not the same as Andrew’s tool, wherein users would walk around their homes to see the furniture. Instead, they have to take a picture of their living room or any place in their home that they want to add furniture on, take a seat, and reconstruct all they want. Users would just sit down, choose some objects they want, and rebuild any room without walking around.
Andrew also added that upon researching the reviews about his furniture augmented reality app. He found out that people didn’t want to stand up and walk around just so they could reconstruct or place the object they wanted. Andrew knew that augmented reality is really meant for walking around, but for his tool made for furniture editing, people would prefer sitting down to walking around their homes.
When Andrew finished his explanation, the huge retail company loved his idea and told Andrew that they wanted to do it. Andrew was very proud because Andrew’s company was the one chosen among the 20 other companies that his client approached. Those 20 other companies were also famous, so Andrew really got excited.
Andrew told the huge company, their client, that they would already begin working. Both parties signed papers, and Andrew’s client signed the contract he created for them. Everything was smooth, and Andrew and his team were already prepared to work. Andrew was confident that they could get it done even though they didn’t actually have the production-level version of the app they proposed yet.
Andrew suggested the project as a proposal, which means that he knew how to build the app, they just hadn’t created one yet, and Andrew also had no assurance that it would work. Andrew knew all these risks, yet he was still confident that he and his team could deliver the finished product to their client. Andrew only charged his client less, maybe six figures, because he knew and his client knew that the proposal and the project were still experimental.
So with all of these conditions, Andrew gladly accepted the task, Andrew and his team started working.
2. Be cautious around experimental projects
There is nothing wrong with doing experimental projects. Still, you have to make sure that the client who is asking for an experimental output is capable of understanding what you are doing.
For example, if you are a digital editor and your client doesn’t know what you are doing, even if you told them that the project is still experimental and they already agreed, your client would still be disappointed and frustrated if the experimental project failed. This is simply because they don’t understand what you are doing and expect that everything you do is perfect. After all, you are a digital editor.
Now, if you are a digital editor and your client is also a digital editor, if you tell them it’s experimental and they still agreed to work with you, they would not be disappointed if the final product failed. This is because they know the process, they understand the complexity of the work, and they too could already sense if that experimental project would fail or not.
Things just got scarier for Andrew because if that huge company is not that technical and doesn’t know how augmented reality works, Andrew would be sued if the project fails, even if they both agreed that it was still experimental.
Fortunately for Andrew, some people in his client’s company understood his work. Fast forward two months after the huge company became Andrew’s client, Andrew and his team flew out of town so that they could meet the corporate headquarters of their client. They were all gathered inside a big meeting place, and Andrew got to talk with a lot of stakeholders, VPs, and VIPs.
Andrew told everyone he met about the experimental project that he has been developing and got the reaction he expected. Everyone was so thrilled, which made him even more dedicated to finishing the project. Andrew and his team continued working, and everything was going great until the fourth month came.
Before going to that, Andrew didn’t mention this earlier, but part of the contract that Andrew’s client signed was that the first deliverable was basically six months from that time. It would be a demonstration to show that Andrew and his team were still on track and doing what they were supposed to be doing. It was clearly emphasized on the contract because Andrew wanted a clear schedule about what they needed to do.
They asked for six months to prepare everything perfectly, and they had their whole calendar full of plans for six months. So, about four months after Andrew and his team were working, they got a call from one of the VP’S who was tasked with looking after Andrew’s project. Before that call, they had a fair and regular conversation with this VP.
Like every week, Andrew would submit regular updates on what they were doing and the progress of the experimental project. So the VP called Andrew, and he said, “Hey Andrew. I just heard this one from my bosses, and they said they really want to see a demo of their work before you go any further on this project.”
This call was out of the blue, and Andrew felt really odd about this because it was clearly stated and emphasized on the contract that they would release a demo on the 6th month. Andrew replied, “Okay, let me take a look at what we’ve gotten so far, look at the contract and see what that is. I’ll get back to you after I check everything.”
So a day and a half later, Andrew called the VP and told him that they were not quite ready yet to have a demo, and the deliverable date for the demo was still two months away, according to the contract. This is the reason why they were still not ready to give the demo. Andrew hoped that the VP would understand why they couldn’t release a demo yet, but the VP’s answer wasn’t his expected response. The VP replied, “Expletive fill, and we will cancel this contract and we’ll put you out of business if you don’t give us this demo that was not in the contract two months ahead of time.”
3. The big bullies the small
This is a major red flag because the huge company was already showing abuse of power. They were aware of the contract, and they were well aware that the demo was still on the 6th month, but still, they wanted the demo on the 4th month and threatened Andrew that they would put him out of business if they couldn’t deliver that demo.
Andrew was stunned by this sudden reaction because they were having a good relationship with this VP. His team was constantly updating the progress of the project, and the VP knew exactly how hard the project was. Their communication was good, and they were following their timeline, but all of a sudden, their client wanted to have the demo that month.
It’s not like Andrew and his team were showing warning signs to the client like they weren’t capable of doing the task. If Andrew showed signs like cutting communications or failing to give an update about the progress of the project, then the client’s actions would be reasonable. There is really nothing wrong with asking for an update, but the situation has to be right. There was no other explanation that Andrew could think of than the huge company doesn’t hear the word “no” often.
Andrew concluded that his client was prideful enough to accept their mistake. When they wanted the demo and Andrew told them it wasn’t on the contract, he struck the client’s ego, and because they were a huge company, contracts coming from small companies don’t control them from getting what they want. It could also be that being angry is an effective method for this client to get what they want.
The client loved Andrew’s work, and they had a good relationship. That call was so out of the blue that Andrew couldn’t think of any logical explanation rather than those mentioned above. Andrew had no choice but to give his client a demo because it would be a waste of time and money to sue them for not following the contract.
So, after that conversation, Andrew called a meeting and told his team, “Look guys, we are basically being crunched right now by our client. We need to figure something out. We need to figure out how to show what we’re on track with because, you know, I can give them all the engineering documents, I can show them everything that we’ve been doing on our Jira, or Trello boards and everything like that. But still, it wouldn’t make a difference because they can’t interpret it, right? They don’t necessarily know what they are looking at so let’s brainstorm real fast. How are we going to do this?”
His team was shocked about this sudden issue, and one of Andrew’s chief scientists said that it would be impossible for them to release a demo. Andrew replied to the chief scientist, “I know it would be impossible, but is there a way we can give an example of the experience that they will have because I think that’s really all they’re looking for..”
He added, “They don’t care about our particular sort of two or three servers, the first one which processes the image for depth, the second one processes for plane detection, and the third one actually puts everything together with sensor fusion. They don’t care about that. They don’t care about how that works, they just assume that it’s gonna work. They care about their seamless experience integrated with their user experience and user interface stuff. So how do we give them that experience? While we’re still in the build phase?”
Andrew described his client as someone who isn’t very technical. It’s like his client read a bunch of scientific articles about applications that could do these things, as if they had proof that this concept is possible. They would look for any small tech company, demand that they want the same concept as this 1 million dollar worth of project, and they will only give that small company $10,000 as their budget.
It is like they just need proof that it is possible. They won’t go into deeper details on how complex that project is. It’s like saying, “You are a tech company. If they can do it, you can too.”
Going back to the story, Andrew and his team were brainstorming how they could give a demo to their client. Andrew told his team that the user interface, webhooks, API’s and gateways are already solved. The project is half cooked, and all the technical and difficult parts are already done. The problem is they still need to program it and attach all of these complicated parts to build the project.
But because their client was in a hurry and there wasn’t enough time to attach these critical components, they took all those processing chunks out. They removed it from the project and decided to work on them separately. The app was already capable of taking an image from the customer server, and they could already run the image through the pipelines.
So, they decided that they would have a manual processing step where every time an image comes in, they would just replicate the depth and plain map for that manual, and their client would be able to have the experience. After that demo, they would replace the automated system with the manual.
Everything was settled, and Andrew told his client, “Okay, on this date, at this time, from this time to this time, you can try the app.” Andrew gave them a schedule so that they could manually set up their terminals and workstations.
The co-founder of Andrew’s company had to build a new piece of software that handled the users’ requests displayed, which allowed Andrew’s team to do annotations, plane detection, and other stuff that the processing chunk would have done. They wouldn’t have to do all of these if their client followed the contract because, in six months, the processing chunks would have been attached to the application, and they wouldn’t have to do it manually.
The time of the demo came, and despite all the struggles, they were able to give their client the best experience. Half a dozen different executives tried the demo, and they were all thrilled about it. Unexpectedly, the demo was a success, and their client was happy. The next day came, and their client called them, saying, “Continue the good work. We love you guys, we are happy with everything.”
This was unexpected, yet it oddly gave Andrew’s team a bit of confidence and assurance that they were on the right track. Even if the technical pieces were missing, their client didn’t care about that. As long as the application was working and their expectations were met, they didn’t care about the process.
They continued working, and as they were developing the project, Andrew realized that they were breaking even on the project. So Andrew approached one of his close VPs and told her that they were breaking even on the project in terms of a dollar figure. The VP replied, “Well, why didn’t you just ask for way more?”
4. Don’t be afraid to demand more budget
If you are in the right position and have proved to your clients that your work is worth it, don’t be afraid to ask for more, especially when dealing with large corporate organizations. The truth is they have more money than they give.
Asking politely for more budget to support the project costs you nothing, and you really aren’t risking anything to ask for more, especially if you’re already part of the team. It’s different if you come in with a bid and you’ve never talked to anybody, you don’t know anyone, you made many mistakes, and you disrespectfully asked for a raise. Don’t be concerned if you are asking too much or not because huge companies tend to lowball anyone.
The fact that a huge company hires a smaller company to do their work is a bit fishy. Don’t you think huge companies have other connections that work way better than a small company? Even if they have trillions of dollars, they would still try to lowball any company and be as cheap as possible, and that’s because of the procurement team. The procurement team of a company is in charge of being cheap, so even if they have a lot of money, they would still look for ways to be cheap.
Fast forward to after the demo, Andrew and his team were all back on track. Andrew sent the project off to them, and the client was hosting it. The client was running after the project, Andrew sent the software, and suddenly the software became live during the summer of 2017.
While all of that was happening, Andrew and his team flew back, and their client showed them their lift numbers. There was no way Andrew could tell if the numbers were real or not because they didn’t have access to know the transparency of the numbers. Andrew was completely reliant on his client and trusted them that they were telling the truth.
So when Andrew asked about the numbers, the client told him that AB tested, they saw 1% left in overall conversion rate from part to sale. Andrew was a bit confused because there were no other drop-off users.
So, in other words, you could have a 1% lift for some cohort, but you lose a ton of other people who just don’t even want to do the process, which is not a good outcome. But in Andrew’s case, they did not see a drop off of people who are entering the system and abandoning it. People were utterly finishing the work through and then actually purchasing.
Andrew was thrilled because the outcome was better than they ever thought it would be. It wasn’t even on Andrew’s servers that it worked. It worked on that kind of stuff. So it was a slam dunk, and everyone in Andrew’s company was happy with that.
But then, suddenly, Andrew’s phone became silent, and they didn’t hear anything from his client again. Andrew was puzzled and worried about why his client became M.I.A. Andrew, and his team began thinking of acquisition details like maybe the client went silent because they wanted to steal the project and continue it on their own.
Because of this, Andrew sent a Note to one of the SVP’s who he had a good relationship with and told him, “Hey, can we get together and see what the deal is?” After that, Andrew received a phone call, and the SVP replied, “Oh, yeah, no, I’m glad you reached out. What we decided was despite all of the great numbers and everything, it would break the way that we build our web application, our back end, and how we manage 3D content because that’s a big piece of it too.”
He added, “There’s just a ton of 3d content that we had to help them fix, and it’s just there’s a lot of complexity to it. As a result, the lift wasn’t big enough and cheap enough from an overall organizational perspective that they would be able to invest in it because it would take more than 1% of a change in their organization to fully realize the value of scale.”
After that, Andrew asked that SVP if they could get publicity from the project. A little publicity saying that Pear, Andrew’s company, created this software would be a great help to them. Andrew was expecting the client wouldn’t mind, but to his surprise, the SVP replied, “Oh, sure if you pay us $300,000.”
Andrew just thought of it as a joke, and that response was Andrew’s hint that their client didn’t want to continue their working relationship, but Andrew was a bit relieved that it was all over. He was also glad that he was able to help his client and finish the experimental project on time. Andrew’s client also paid him on time, and there were no other problems that he encountered with the huge retail company during the payment process.
In fact, Andrew’s client invited him and his whole team to their headquarters. They were all gathered there, and there was a presentation meeting with a handful of senior VP’s talking about the future directions.
They were having fun, and Andrew told the client that they would probably not be going to do anything yet as of that moment. But they still want to keep in touch so that his small company and the huge retail agency would still continue moving forward.
Shortly after that, Andrew presented his long-term vision. Andrew made sure that he and the huge company were going in the same direction. He did his research and asked the team. Fortunately for him, the long-term project that he had proposed and the huge client’s software are going in the same direction.
In the end, Andrew satisfied his client, they were all happy, and they ended the contract with smiles on their faces. Andrew didn’t mind the project he made anymore and was content with his salary. However, he wasn’t aware of the scheme that his client was hiding. A year later.
So about a year later, Andrew was in Colorado spending the Halloween season with his family. When Andrew got back to his car, he looked at his phone, and someone sent an email to him saying that their client, the huge retail company, was debuting a new augmented reality in the browser history.
Andrew tried the public app, and he realized that it was the same experience as the one that he created. The big company told them that it failed. But the truth was they just wanted Andrew out so that they could reap all the fame. Unfortunately for them, the app wasn’t good enough. The app was incomplete because they kicked Andrew’s team out. The app lacked backend processing, and that missing piece was on Andrew’s computer.
They couldn’t add it on their own because they didn’t have access to Andrew’s computer. So they covered their tracks, and instead of hiring Andrew again, they proceeded without this crucial part, and the result was terrible. Within a week after their public launch, they pulled the entire thing off because it was missing a technical piece.
People started writing articles saying that the app didn’t work, it was trash, and the big retail company was moving backward. If only they didn’t lie to Andrew, the app would have become successful. Andrew felt a mixed feeling after seeing that, a mixture of joy and sadness.
He was a bit happy because of the karma that the huge company faced. All the while, he was also sad because of the thought that the project could have been more than that. People would have enjoyed the app he made, and he could have done more if only the big company weren’t selfish.
And that marks the end of Andrew’s client-horror story.
The main highlight of Andrew’s story is to be cautious around huge companies trying to hire you. It’s a big opportunity and a big risk as well.
To be safe, know their motives first and try to listen to your gut. If the intentions of that huge client are pure, then you can grab that opportunity and do your best to develop your small company. Make sure to take into heart all of these lessons and take note of the red flags, or you might become the next sharer in the following client-horror stories.
This article was based on Episode # 24: Andrew Kemendo’s Story, please watch the complete episode here!
