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Transcription of Artur Maklyarevsky’s episode (That time your client’s software died at the launch party, after they ignored all your scaling suggestions)

Transcription of Artur Maklyarevsky’s episode (That time your client’s software died at the launch party, after they ignored all your scaling suggestions)

This transcription belongs to Episode #1: Meet Artur Maklyarevsky by the hand of Our Beloved Host, Morgan Friedman. Please watch the complete episode here!


Morgan (Host): Hey everyone, it’s  Morgan here with  Artur for the first edition of what will hopefully be many podcasts. So let’s take it and see how it goes. The podcast is all about dealing with challenging clients, what they do that’s crazy, mistakes we made, how we solved it, what we learn from it. And  Artur is one of my oldest and closest friends and, frankly, one of the inspirations behind this podcast because we’ve been talking about his crazy difficult clients for years and he has lots of great stories, especially when he’s in a good mood and just one hiding so hopefully he is.   Artur, tell us the story about one of your clients and let’s run with it.

Artur (Interviewee): Sure, just for the record, I like to know that my name is pronounced  Artur. Morgan and I, we have kept it as Artur because  the first half of my life, till I was 18, I was called Arthur officially.  And I believe his dad is also named Arthur so it’s just a matter of habit. So we’ll allow this bastardization to go and come along.

Morgan (Host): I’ve only made this mistake about 11 million times.

Artur (Interviewee): It’s great because it flashes me back to my former self and it’s nice. Okay, I’ve been doing consulting with my digital studio since 2006. So  about 15 years of a myriad of plethora of clients and you can imagine projects as well. And for those more colorful ones, I’ve always been the first time entrepreneurs who have an idea that another comes to them kind of suddenly or something that they’ve been thinking about for many years and they finally decide to go for it. And those are always very open. I think they’re the most exciting and most exhilarating types of projects because that’s the nature of startups, right? 

Morgan (Host): The sense of what’s coming. 

Artur (Interviewee): Yes! So being a startup entrepreneur myself, having launched my own little experiments over those years alongside consulting with other entrepreneurs, it sort of kind of goes hand in hand because I’m in that headspace and so  I could always focus on that workflow, and those difficulties that are unique to startups. And every time I do one, and if I have various degrees of success or failure, I try to take those lessons learned and apply them back into our customers or clients roles and projects. 

So, having said that, one would think that after a few startups under your belt and a few clients that you’ve launched here and there, that you would have everything kind of fully under control and everything down and everything’s just like now where there is a beautiful, automated science and scientific method. Or everything is happening perfectly without going from one phase to another without fail, and it’s just as beautiful as a wrapped-up little package. Ironically, it’s not and I believe that it just really comes down to the nature of what startups are by default. So, startups have very high risk  projects that have statistically proven high probabilities of failure. And once that is sort of like a given physics of that industry and then you’re kind of  , you’re always going to get various degrees of failures for various different reasons. Because when you’re dealing with the startup, there’s not just one delta point, but there’s many constantly moving Delta points of entropy that can take any project off the rails and just have it like kind of do a death spin into a crash and then boom. And then it’s a question of a consultant who’s trying to provide services for customers who are expecting success with a very high risk project. You’re trying to mitigate a lot of those failures as best as possible and in the most ideal way you and the most essential way to mitigate the personal liability and risk against you as a provider of service to set up startups. 

So the last project, I think, was almost a beautiful case study of all these things that could go wrong under the perfect storm. And because it’s the last project, the memory is still fresh in my mind so I could definitely touch upon that in greater detail than any other pseudo failed projects that we had. In this project, we have more success rates than failure rates. But the failure rates can be painful to various degrees and this last one was, I think, is the most painful for me personally, because there was a personal element involved in it, which never was before to any other prior projects. So that was a very big lesson to learn.

Morgan (Host): Let’s jump into the recent case in a moment, I’ll preface it with two comments on what you said. First, a good reminder that you’ve had many more successes than failures. Part of the concept behind this podcast is, even if you have a one in 100 failure rate, no one talks about it but it’s so emotionally intense and powerful and we want to learn from it to avoid it. Hopefully this podcast will be a forum to talk about that 1% of the blowups. Second part of this I want to make is that you observe that startups are much more likely to have these sorts of problems for a few reasons that you said and I want to add another reason which is “Who’s attracted to start a startup?” 

Those people with lots of ideas by definition like “I have an idea or I want to do something”, and people with lots of ideas as clients will be the sort of person who keeps on changing origin, changing things every two seconds. And as a consultant or implementer, that’s  a massive red flag so that’s another reason why by the nature of working with startups, these sorts of client challenges are more likely.

Artur (Interviewee): Absolutely. And, you know, it’s like you said that these folks who have lots of ideas and you know, especially first time entrepreneurs. What I find in the patterns that is very clear to me is that they have a lot of energy about their idea like it’s their baby. They also project a lot of their own personal tastes and life experiences into it. And so they’re not very objective at all, by definition, and I totally understand because I’ve been in that position many times. And so there’s a challenge kind of when you’re working on a project that they’re trying to essentially solve not for themselves, even though the idea may have come from a personal problem they may have, but they’re really trying to solve it to a particular market and space and demographic and cohort. 

That is not directly associated with them, then there’s a challenge of them having to really step out of their own skin and see that their product is really bad and their brand is not about them, but it’s about the problem space. You know, to try to get their egos away, but at the same time, it’s a customer, it’s a client, you will always be dealing with their egos, so your communication and the way you approach them has to be very delicate. You can’t just right up front say you know, “Bob, man, I hear you but that is the stupidest idea I’ve ever heard. You know, I’m sorry, but I refuse to do it.” And this last project, as I got into it, there was a situation where you know, I had to vocalize that in some respectful way. And it just, you know, it wasn’t enough. And it was one of the learning things that kind of mistakes that kind of bit mean in the bite at the end of the day.

Morgan (Host): This is a great preface. Let’s dive into the dirty details. Tell us the story.

Artur (Interviewee): Okay, I’m gonna try to be as objective about it as possible and to give it a bit more origin story from where things started, and maybe present a little perspective from the founders point of view as he presented it to us, you know. 

So the whole thing really started with a very old dear friend of mine that we went to school with. I’ve known him for 20 years and he’s a creative technologist, a very talented human being who did a lot of amazing installations and animations and things like that. I was always quite fond of his work, but we never had a chance to work with each other for different reasons. Few times we came close to working with each other, but it didn’t happen. And he was always involved in agencies of various sizes, other large digital enterprise companies that were much more mature and had a different life cycle of different products that they would work on. He would be leading either as a CTO role or leading, you know, the production and creative team around it. But take note that these were not startups, a very important preference set. Suddenly he had this opportunity where he knew somebody from the grapevine who had this amazing idea. 

This is, by the way, a few months into COVID, right, so everybody’s on lockdown so there’s a lot of new things happening across the culture, and people are starting to kind of brood and think about ways to kind of get by. Actually, not only just to get by this period of lockdown, but also, you know, project maybe how things would be different on post lockdown.

Morgan (Host): And everyone’s sort of going a bit crazy, like “What the fuck is happening?” 

Artur (Interviewee): Yes! there’s always a sense of mass hypernormalisation you know, just being in Cabin Fever. So all that built up energy, you know, culminated in this guy. So my dear friend, Josh, calls me up and says, “Hey, I got this client who’s got this crazy idea and he also has some personal savings to get it to, you know, an MVP, and it sounds really exciting, challenging. And I think this is finally a great opportunity to work with you and to activate your team because we need to have a front end designer, UX designer, and we need a production team to make this happen.” 

“I would be the CTO, because he’s hiring me as the CTO as the product lead owner. I’m going to work with him to basically translate his idea that he’s already, by himself, has had some success with.” This was very interesting. He took an existing technology , such as Zoom and I believe it was Mixeler which was a streaming music service. With those two things together, those two apps opened, he was able to create a bi weekly remote party with a live performing DJ that would stream on the mix of their service. And then all these people in their homes, you know, under locked down with little disco balls and lights, were all invited to a certain time and day to experience as much as they can. There’s a sense of musical enjoyment and togetherness that one could have as much as you can digitally. 

And I I tried it out. He said, “Hey, there’s gonna be a party this Saturday, come check it out.” And of course, I had nothing to do on Saturday night. “Turn it on, there is actually a really good DJ, pour yourself a drink or two, and next thing you know, you kind of lose that sense of isolation, because everybody seems to be in the same vibe.” Basically, they’re all hearing the same song,  they’re all in the same, you know, general state of mind with a lockdown and just want to have an hour or two of just healthy aerobic, you know, exercise, enjoying music and you could even chat with people, you know, on Zoom and all that. So, he did that for many, many weeks, many months and managed to get a following and manage to see that there’s something really special here. I felt that too and I thought, “Wow, you know what, this is pretty good.” 

And I could see this really working out quite well globally for people especially, even post COVID who are just simply, by their physical location, they can’t get to a club and go out and experience this thing as they would in real life. Right? So especially folks like me, who came from an urban environment, who did this before, remembered what that feeling was like, and want to recreate it and so some way again. So they had a really good base there for an idea and they proved it in their very kind of, you know, minimal low tech way. 

Again like the experience was very low quality because zoom is not really made to perform in this way, they spackle together, and everything was kind of speckled together, but they managed to do it. And then they said, “Well, what if we did this idea but built from the ground up, purpose built for these needs which were high quality video, multiple people on a concurrent video feed, chatting and high quality sound.” Those were also quite important features. 

So we had a conversation, a discovery call about it. By the time they activated us, they already had about a month of prior iteration on the concept of the product. My friend hired another mutual alumni who was very brilliant to make the business deck to think through the business model and to create even a pretty decent, early stage of wireframe. 

And so for us coming in, we didn’t completely start from everything they had, you know, a general rough idea there and we were tasked to solve it. One of the first things that we recognized in order for this thing to have any chance of success was the core video streaming engine that they needed to be built. We as a team did not have those capabilities and we said that, “Although we don’t, we have worked with a former tech partner who was actually part of the same alumni school that me and my friend went to. He hired us before for a very large live project and we had a great working relationship on that project. He was leading all the really heavy lifting cloud infrastructure for that project. It was a Live app for FIFA, had a lot of moving parts, and it was very similar to what this project that we’re about to do in the sense that you’re dealing with live services, video streaming, and it was an event bass kind of project. 

So we contacted Mr. Neil and he said, “Wow, this sounds challenging! I love to work again with you guys and I think I could pull this off with the right services that I already had in mind.” So we’re like, “Great!” We offered ourselves essentially to the client and to my friend who’s the CTO and said, “Hey, we’ve got Neil. Neil, meet the team! Neil is going to be doing all the core and all that really difficult stuff such as the cloud infrastructure and the video streaming services. We, as the design to depth, will do the front end desktop application.” Before there were talks about doing the mobile one as well, but we all as a team, all of us, engineering and my friend the CTO, made this early call saying, “Hey, let’s deal with mobile later and these are the reasons why” Everyone agreed and the client was convinced and and we solve we went into production. 

Now what we wanted to make sure was that Neil, even though we brought him in in the sense of we’ve procured him as a vendor for a core aspect of the application, we ensured in the contract that Neil was not part of the design to depth. Neil has his own consulting company. So he is separate from our contract and in our contract, we specifically stated that we are not responsible for anything that Neil is responsible to deliver. We are working with him, in fact, he is leading our team in many aspects and so is the CTO of your company, but we’re working with him on different aspects of the project. 

Where essentially, the front end applications need to start talking to the cloud services that he’s building. So there’s going to be some coupling there that my team and his team and him need to kind of iron out, but it’s he’s taking the lead when it comes to that. So we thought okay, contractually that seems pretty clear, fair and great. And actually, it was even better for us because the CEO started offering and asking everyone involved in the project some equity, which a lot of founders sometimes do to lower the cost. And we politely turned that down but Neil actually took that as an opportunity and he managed to work out a separate equity deal.

Morgan (Host): Pause I have a question. The listeners don’t know what disaster has come to unfold yet, but you do. So I’m wondering if at this point, you think in retrospect, you should have done it before. It was a smart idea to have him separated out so that he would not be part of your team but in retrospect, could you have done anything differently at that point?

Artur (Interviewee): Okay. So at that juncture, in regards to separating out our teams and our responsibilities, the answer is no. I think it was evidently clear to everybody that looking at the contract, you could be much more, let’s say, verbose and outline what those roles were. One of the things that wasn’t named or outlined was my friend’s name. His full name in the contract saying he was the CTO and these are his roles. It was mentioned in the contract that the company’s CTO would lead this and this in this, but he wasn’t named. Okay. So, the point being is any kind of information that you have that you already know is going to be it doesn’t hurt to put it into contract because it just literally confirms to everybody who’s signing it, that this is what it is, at least today, obviously. And then if things change along, later down the line, you could upend the contract, and everybody can co-sign that. But the more amorphous and ambiguous it is, the worse risk you have for it to be later in a litigation case misinterpreted into their favor, right? So you need to spell it out more and more. 

In that contract trial phase, there were other errors that we made because of haste. One of them was I did not fundamentally hire a lawyer at the time to then draft up our ideal contract to give to them and to use his litigational skills again. With cooperation and collaboration with my client’s  lawyers to try to come together to a contract format, whether it was for them to at the end, use our contract or use their contract with our terms. 

So I used a contract that I had for many years, and I felt at that time it was pretty solid. But obviously I’m not a lawyer. So if a lawyer looked at that, he would have said, “Oh, interesting term here that oh, by the way, left, left his detail out.” They didn’t want to use our contract. They wanted to use their contract and he made this very innocuous, like, comment saying, you know, as I’m starting on this project, this is the CEO talking, I’m having contracts with all these other people on the team. My lawyers feel comfortable if we can just use the same contract for everyone, right? It actually makes rational sense and it’s easy, but on the other hand, it doesn’t. Because everybody’s relationship and responsibilities are very different. The contract he has with his CMO is a different work flow and relationship with a vendor and the technical team. 

So I said okay, that’s okay. But I just want to make sure that these terms, you know, there were a handful of them, these are deal breakers for us, and I really would like them to be put into your boilerplate contract. They looked at it, they said yes to all of them except one, and that was the first flag. And again, I didn’t really think much about it at the time because it seemed innocuous, but looking back after the failure, it all makes sense why they would say that, and that term was very simple, something that no other past clients had a problem with because it was very rational. It says the following: “If they decide to cancel at any time, there would be a two week buffer from the time that they cancel that we as a team” (and we specified I believe it was 80 hours) “that we would have those 80 hours paid for. 

And they would be used for the following things that every project that gets canceled requires.” Which is a team transition because maybe for example, they don’t like something that our team did and they want to hire a better team, there’s going to be a need for a transition period between the development team or just simply tasks for documentation and making sure everything is nicely wrapped up for them so there’s work that needs to be done. I explained this to the CEO that this is actually in his interest. It behooves him to have this time allocated because it reserves and you know, frankly, says we can’t, as a team, “Us” that you’re firing, we can’t disappear because we still have some fiduciary obligations to you know, make sure this ends correctly. And it’s only 80 hours, right? So it’s not like we’re forcing him to do 800 hours. But he said, “You know what, that’s okay. I still prefer not to have it and if it ever comes to something like that, I’m pretty confident and pretty sure we’ll work it out, we’ll work something out.” And I said, “Well, if you want to remove that level of warranty, essentially, that’s on you. But I’m explaining to you how it’s going to benefit you. It’s not really for us and he was like “No, no, it’s okay. I’ll fly cowboys solo on this because, I’m sure we could.. I don’t want to put it in writing.” And to me that was not very smart, just a general CEO move.

 Morgan (Host): It’s not just smart but It’s also not respectful for you. When you hire any employee, everyone has two weeks notice like it’s a standard employment term and like you’re not looking for other work. It’s respectful for a few months. So I think one lesson from here is in the very beginning, if they do weird things that are let’s say disrespectful, like wanting to take out two weeks notice which is a very standard term then that should set off yellow flags early on to start paying attention earlier.

Artur (Interviewee): Exactly, exactly. I mean, even the word “Disrespectful” doesn’t even come in. It’s almost just exotic and it’s just out of the normal standards. When that happens, that’s the red flag. And at the end of the day if you say “Okay, you’re okay with it”, but are you personally okay with it? Because if that situation happens, you know, you’re out there flying in the wind. Are you going to be okay with that? I know you feel that today it’s a 1% chance but if it does happen, are you going to be okay with it? And maybe you’re okay, maybe you can take that kind of damage and walk away from it and it’s no big deal. But maybe you shouldn’t and maybe you know, why do it, right? Again, this is the beginning of the relationship, right? So like anything else you want to show a good face and you want to show some level of service. I don’t want to start haggling at the beginning of this.

Morgan (Host): That’s actually a really good point. When you’re just starting a relationship, you want to be especially nice and generous towards them. And this is a good point because like that can backfire if things go wrong, so maybe another lesson is early on, you need to force yourself to push back a little bit more than your nice and generous intent.

Artur (Interviewee): And what that does is it creates, I think, a sort of set of working standards and relationships saying “Hey, I can show you in many ways as a service provider my generosity.” For example, I offered them a discount on the first eight 500 hours that we’re going to work together. So that’s a very clear, you know, gesture. But if I do this, I like to see some gesture on your end in some capacity to be. So yeah it also establishes a certain kind of, in a very subtle way, like a collaborative type of relationship versus I am the customer and I’m always right, which they’re not, and they’re hiring you as an expert consultant, to make sure you’re doing your job. 

So you just need to say “In order for me to do my job in the best way, I need these parameters, otherwise, it’s just foolish for me to go into it.” So, again, this is the beginning of this essential paradox, which is; you try to control as much of this chaos as possible, but at the end of the day, you are not the CEO of a startup, but they are. You’re providing a service and the contract, if you look at it very cleanly, It essentially was a work for hire contract. I am a service provider. So, therefore, I’m obligated  to fulfill certain things in particular parameters that are outlined in the contract. Now, we outlined again, that this is a startup. That means there’s an MVP and that means there is a fluid scope, because you will be iterating. You will have lots of ideas, in fact, we actually like that. We’re into people like that and we will engineer that kind of flexibility and course correction, because it’s a startup. 

You, as the CEO, will have unknown variables in the marketplace coming at you week for week with different opportunities and we, as a service provider, are going to try using our agile methodology to accommodate you in every possible way. So that you can capitalize on these opportunities and make sure that if your assumption was A: When you started and now you see the market change a bit and you need to change the product very quickly. Instead of making feature A make feature B, we want to give you as many abilities to do that so that your chances of survival and getting the MVP out that has traction will have great success so that you can come back to us and we can have the next round of product development. So we started off and we had team calls. We’re all talking about how this project is going to happen and who is doing what. By the way,this is the very key as part of my process with the new found entrepreneurs. He was a complete new person to entrepreneurialism. 

He ran a successful film commercial, shooting production,  and post production company in LA. So over years and years he’s built a successful company. He knows what it means to manage a team, have clients, have milestones, and all that. However there is a huge difference and I tried to tell him many times in many different ways, that this was going to be a bit of the inverse of what you’re used to. So you need to be mentally prepared for that because we’re not like shooting a commercial where every single minute of that production has been planned and everything is executed. 

This is not like a Formula One team who executed perfectly because it’s the opposite. I told him exactly what that means and that he needs to have that flexibility and he, on the call, was totally aware, cognizant, he understood it and was  ready for that. And of course he was a new owner and was new to the entrepreneurial risks or concerns to us before he really committed to the final payment which was, “Hey you know, I’m worried that I’m gonna be spending all this time and money and then at the end of the day, I’m not gonna have anything.” it was what he said.

Morgan (Host): Everyone said it a million times.

Artur (Interviewee): Yeah, exactly! And, you know, again, we had to explain to him how we’re going to try to mitigate that fear. At the same time saying, “Listen, let’s be clear what we’re doing here. We’re going into embarking on a project that has never been done before, using technology that we’ve never used before. Technology that you, your CTO, and Neil, is saying that we should be using because they’ve supposedly done their due diligence (which they didn’t at the end of the day) and this is going to be more of an r & d kind of style of work. We’re going to do our best to mitigate that risk so that we don’t go months and months down the line where you end up with a completely useless product and wasting all your time. We also don’t want that, you know, it’s not in our interest.

Morgan (Host): Something I always do at that point is that I articulate these risk factors in a Google Doc all the time. Like every week, I always update them because it’s very easy to like “Have a conversation. Oh, yeah, it’s gonna go wrong. Oh, yeah, sure.” But it’s like always on the top of their mind, this will probably fail, this will probably fail, this will probably fail. And if it fails, it’s like it’s a lot less emotionally burning on them because even if you tell them once it’s kind of really expecting it to succeed.

Artur (Interviewee): Exactly. I have it all recorded, you know, but again, that was for my own personal documentation and I never thought I had to. But you could literally have language in the contract that literally says “Listen, this is not just a regular work for hire type of thing. The nature of this project is highly risky. We’re going to get you an MVP. And what is the MVP going to mean specifically, and blah, blah, blah, blah. So we embarked on this thing and one of the unique aspects of the structure of this project that was different from any other ones that we’ve taken on was that there was a key role in between us and the client, which we never usually have, and that is between us and my good old buddy who’s the CTO. So because of that, and because he’s an old friend of mine, by mistake and a very natural thing to do, you let your guard down a bit. 

This is because you feel the assumption that your friend will also have a bit of your best interests at heart, in the sense that he would also want to make sure that the working relationship is as good as it can be and that if there’s anything that comes into our universe that will make things worse for us as a production team, he will find ways to resolve that, remove bottlenecks, and de-risk things. When he then talks to the CEO, he will have our perspective also at the forefront of the project to explain to the CEO why things are going a certain way, why we need to build certain things or why we can’t.

Morgan (Host): I’ll interrupt the end because this is another risk factor.  Okay, since this is our first time doing  this I like this structure of pointing out the learning as it is happening. I think this is another good learning experience, which is just because someone’s a really old friend you’ve known since college, which was like 20 something years, you assume that they will act in your best interest. I think unfortunately, you know that old cliche that as soon as money is involved people would become crazy. So like there’s $5 and suddenly old friend Chow for $5.So this is why it is important to always keep that in top of your mind.

Artur (Interviewee): Yeah and, you know, again, there were assumptions that I made about the relationship which was I thought he could play that role. And throughout the project, it became evidently clear, and it had nothing to do between our relationship, it was just that he did not have hardly one iota of startup experience. To be in that very important position, calling all the shots, he was just over his head. We discovered that quite a bit early in this thing and as a friend, what I tried to do was to really help him do his job a little bit more and more easier and try to edify him a little bit about, you know, how he could look as good as he can in front of the CEO. 

And so we had conversations where suddenly there was a major missed milestone, we, as an engineering team, told him time and time again that we can’t make this milestone because it’s not realistic, it’s not a green light, don’t do it, and tell all of what we said to the CEO. And, again, because he’s never been in that role, he was overclocking expectations to the CEO and told him a different story. As a result, it all came to a head where on that weekend, the event didn’t happen, it didn’t launch, and suddenly the CEO was pissed off. Then, suddenly he’s in a bad situation and the team is pissed off at Josh because we said “This was clearly told to you. We couldn’t do it. What else can we say and what else can we do?” You know, and not only that but there was also a lot of pressure. 

Morgan (Host): Artur, let’s say make some important points. The huge milestone missed that the CEO had that you were talking about. I just want to articulate two lessons from there as well. Made an important point that your friend was also in over his head. So I think another good lesson is that when you realize that the people you are working with are over their head, it’s not enough to just advise them and guide them. Because it’s like if someone’s drowning, to say, “Hey, flap your hands,” is not gonna help a drowning man. So I think another lesson is basically when your client or your client representatives that you work with are over their head, rather than just saying “Hey, maybe you should do this”, you need to take more drastic measures.

Artur (Interviewee): We took those and we actually did that because we saw this as a serious thing and we do not want to continue this project if what happened was going to repeat like that. What happened could really have been completely avoided and we won’t continue doing the project because  it’s not the conditions that the whole team wants to work on. So the answer to us was quite simple: If there’s a bad telephone game, and you are cognizant, which was a good sign because Josh was very cognizant of the limitations that he had and he was analyzing it, he profusely apologized, and he tried to even think through where there was miscommunication. He was trying to re-optimize himself and we said, “Listen, the best and the quickest way to solve this is by putting everybody on the same page through doing a weekly all hands meeting. So, instead of siloed meetings between you and us, the engineering team, it’s going to happen with everyone. 

The meeting would be like everybody can go around the circle and say, “Here’s what we’re doing, here’s the expectation.” Or “You know, FYI, we’re thinking about this event or this opportunity and maybe the team should know about this early on. “Maybe I should know something about the feasibility of that milestone.” Everybody agreed to those meetings and it did help a lot. Even during those meetings, there were things coming up that were like, “Oh, but I thought he would do this?” And then we’re like, “No, no, it does that.” Because of that, the problem was quickly ironed out during those calls and they were the best band aids that we could apply at the time. 

It was great so we kept going forward with that and actually things went along quite well. We basically delivered an MVP to them, we gave them a range of hours and we delivered it in the mid range. So that started to feel good for the team for the client because he had a click prototype that he could finally test on his, you know, users. We started running these little tests and these tests were these little events. The prototype generally worked and we could see very clearly some little rough spots that we could fix and work on. Everything was going swimmingly well, but, you know, it was still an MVP, and we still saw it at the stage. What happened was, again, COVID and people kind of having different ways of thinking during this time. Suddenly, the elephant in the room was really like.. And I think the main issue that we didn’t tackle much early on was a lot of the energy went into the nuances and the UX of the product because the CEO was really focusing on making the product look very different from zoom, which is what everybody is using and doing. 

He wanted to have a differentiator in the marketplace, so for our team, because we’re dealing with a front end application, we were working on those details. But the elephant that was growing in the room was much more deadlier, which was at the end of the day, for this to be a viable business, you need this thing to sustain a few 100 people for a live event. You can’t just have 20, 30, and 40 people, like what we did on that successful prototype, and immediately make a business model out of it. They needed at least a few 100 at scale to have large events where they can sell enough tickets because events take up a lot of energy and time to produce. But that number, a few 100, was really never discussed early on. If it was, the conversation was not that conceptually discussed and it never became the number one assumption and pin point to solve or prove by the cloud engineering team or by the CTO who’s leading the product because they were more focused on that time.

Morgan (Host): Since your team was in charge of building the technology, and the CTO felt and never said the number..

Artur (Interviewee): Let me just be very clear. It’s not that we’re in charge of building the technology, we’re in charge of building the client app that is sitting on his computer that really has hardly any logic to it. It doesn’t do all the beautiful magic that is the company, that is the experience, because the experience comes from the cloud that is streaming the video.

Morgan (Host): I see and that’s what the other developer that had a separate contract was supposed to be doing.

Artur (Interviewee): Yes exactly, and we’re relying on them every every step of the way. You know, we’re just the terminal and we just read what’s being given to us. So, you know, and there were, again, a lot of very unique challenges on the front end and on the client side which was the UX. Challenges like how things look, rules and conditions about being in a conference and then being able to break out into rooms, having very specific rules around that, like how things look or how things work. There was still lots of work that needed to be done by my team there, but at the end of the day, we don’t control the ability of that event to Morgan (Host): 1000 people and make sure that those 1000 people have a great experience on their computer. No, we don’t control that. That’s out of our work because that needs to be specifically engineered with the algorithms and custom code on the cloud. 

So, again, these details were clearly specified in the contract and talked about almost every meeting. It wasn’t like we hid this thing because everybody knew these were the rules. Furthermore, the CTO, Josh, he’s there every week, almost every other day talking to all of the engineering, orchestrating things, and calling the shots saying “Now these features are priority and these are less.” Oh, we will say, “Well, this feature that you wanted to prioritize is gonna take a whole week just to get this one thing done.” He’ll call the shots and the proper thing he should do is to go back to the CEO and say, “Hey, do you think it’s worth putting all that energy and time into this? It’s going to cost us. Yes? No? Great, it’s fine. We move on and our team gets the green light or red light of what to do every week. That would be great. And that would have got us through the MVP. So what changed along the way? Suddenly, after the MVP was out and after the two nice events that they tested. 

Again, our team, having startup experience, was always telling him what to do. Like on the first discovery call, I personally said to him, “Look, you need to make sure you test this thing rigorously and if you expect to do a big consumer-grade launch and put all that time and energy into that launch, you need to really be sure that you don’t wing that and that you have proper multiple tests that replicate that launch situation as close as possible, before you actually go and spend all that money on hiring big talents, DJs, dancers, all that stuff and whatever you need to do for your lunch, prepare for it so that you don’t have really any bad surprises. 

I also told them that “FYI, there will be failures.” I even made a joke and told them “Look at Bill Gates and look at Steve Jobs. Every time they went in and made a big launch event for their new product and were doing their presentations, there was always a technical failure in their presentation.” Something always happens you could actually bet on it. So now that you know that entropy will be there, let’s try to factor that in, de-risk it, have a plan B and a Plan C. I told him this as a good customer or, you know, to prepare him mentally. And he’s like “Yeah, yeah, that totally makes sense. I’m all for blah blah, blah. Let’s do it” 

So two events later they were able to hold sample events with about 50 people. Everybody’s excited and they started to have a big investor meeting that we were all part of. The CTO was pitching and he was really excited about that. They were excited and now there’s all this pressure starting to grow around the MVP because they were using their personal money. They knew from the beginning of the contract that they needed to spend a maximum of X money and make sure that they were ready for it. 

They also knew that to get to the next commercial level and to launch, it’s going to take more effort. They already had in their mind, a friend and family round and maybe even an angel or two, started taking calls, and they were impressed by the advanced prototype that we already made. There’s all this buildup, and so I think at some point, what happened was, this was around maybe the last week of August. So what’s happening in the culture at the time? People have an upcoming election, right? You don’t know what the outcome of that will be and in their mind, they started mixing that event. 

They started thinking well, that’s about the same time as the voting in the early November. Based on our prior velocity and how we are building this app, we can start to see that, by the way we were telling them that it’ll be in a better state and possibly ready for consumer-grade launch at the end of the quarter, somewhere around there. You could kind of get a sense of it, but they weren’t really, you know, asking us at that level, because we were only focusing on MVP. So suddenly the CEO said “Well guys, right before the election, there’s a wonderful and amazing once a year opportunity which is Halloween. During this world-wide event, we are going to throw a big gangbuster/commercial grade event. We’re gonna invite big time DJs, invite all of these performers in different rooms and we’re going to spend all this time and energy making a pre roll.

Morgan (Host): Artur, I’m really really scared because the story is building up. Oh, no, what happens?

Artur (Interviewee): Right, and there’s all this excitement because in their calculus, in their head was this. This was how they expressed it. They said “Because there’s a 50/50 chance that the President’s election can go wrong, and if it goes wrong, (meaning Trump gets voted for a second term,) the speculation would be that it would be the worst possible time for our product to launch. Afterwards or near around that time would be a bad time to launch our product because there would be such a massive depression that we would lose any sense of optimism and opportunity for an idea like this. 

People would not anymore say :Hey, let’s go out and celebrate and enjoy, you know, music and do it with friends remotely, and blah, blah, blah, blah.” They really felt that this was like an existential threat to them. “Therefore, ergo, Halloween, which is like the biggest nationwide positive thing that would happen to everyone because they are all really tired of being on a lockdown, we’re going to really show the world how celebration can happen now, on a very large remote level. Because of these last two tests, we feel really confident that within six weeks or seven weeks, we can get this thing quickly into gear, into shape, and get it to the next level. 

That’s when they came to us and we had an all hands meeting. I very politely and very clearly told the CEO, everyone else on the team, the CMO, Neil, my team, that “I totally understand your thinking, but I feel like, based on my experience and our experience in all these other startups, that that kind of arbitrary date and the outcome of that potential event won’t have any real effect on your startup as you think it would. In fact, I personally think if people do go into a depression, they’re going to need something even better, to get them out of it. 

So it’s like a win-win thing and it really depends on how you creatively spin the marketing and the communication”, which they actually can because they had a very good CMO to do. So I said a comment at the end of that idea. It was an analogy and I told them “Listen, what we are building is very fragile, very delicate, and it’s still at the MVP. Stage. It’s like a baby and like other babies, it still has to go through a gestation development cycle for nine months. You can’t just throw doctors at it to get it to develop and come out faster and expect to have all the same healthy things from it. 

By forcing this thing, your start-up, into this artificial acceleration, you are adding a lot of extra risk that doesn’t need to be there.”  And he’s like, “You know, Artur, I understand you and I appreciate that. But we feel, at the end of the day, such an existential threat that makes us feel like this is do or die. This is do or die. 

We feel like, if we can’t launch it for the Halloween thing, if we can’t capitalize on all the people looking at us today and leveraging this amazing party-atmosphere opportunity, then we can’t springboard ourselves to the next, you know, investment opportunity. We would have to wait out many months, which we probably don’t have or feel confident to finance at that time, we need to get on this.” I said “Okay, I mean, I’m not going to argue.” But that was a huge mistake and how would I have done this differently? 

Okay so what happened, I’ll now be very honest with you again. Again, Let me give you the mental state of everyone,  we even as a team, we had tremendous momentum building this project. We actually had really good winds and we saw this thing develop week after week. Obviously it took a long time in the beginning but it started to come out, it started being used and everybody was excited. We got really sucked into that momentum and that energy that we turned very optimistic, right? Now, it didn’t kind of feel like you wanted to be, how do I say this, a party pooper or, you know, a buzz killer.  

But personally, I had that spidey sense that said, “You know what, what you’re now asking us to do is to go into a completely different gear and turn this MVP into a consumer grade. Everything is fully working, but all of it leading up to this one pivotal fucking event.” What I should have done was the following: I should have said, “Okay, if that’s what you want to do, you have the obligation or you have the prerogative, as a CEO and as a customer to do that. However, we have the right to protect ourselves as much as possible. At that moment, what that meant, and I told him, by the way, I voiced this out during an all hands meeting. This was the way that I thought I could protect myself because we had a good relationship, there was nothing that I noticed about this guy yet that was really evil, or you know, backstabbing or anything like that. So I felt I could honestly say, “You know, hey, Josh, by the way, you’re putting us in a risky situation. 

Therefore, I would just want to publicly state that whatever the outcome was going to be at this event, you should know that we’re going to do our damn best to get you there and make it happen and de risk it. But whatever the outcome is, because we know that this thing could not work out for whatever reasons that are out of our control, I don’t want our balance that is due to us, any outstanding invoices, or the fact that you’ve retained us as our contract states every month ahead of time, and those hours you retain for the next month in November, that any of those things are all going to be contingent on the success of the event.”

 I should have put all of that very clearly as I just articulated into the contract, appended it, had him sign and have his lawyers look at it, have him say, “Oh, I owe you back two invoices. Let me pay that upfront right now.” Going even further, I could even say “Pay another deposit going forward, just to cut even more risk out.” But at the very least sign a contract that just clearly outlines that and goes that way. I didn’t do that because I’m always in the meeting like I am with you with five other people witnessing it. And he’s saying, “You know what Artur, I totally understand that.” And the phrase was, “Don’t worry, man, I won’t stiff you.”

That’s like, you know, the kiss of death, the phrase like that. I should have really, you know, said “Well, if that’s what you feel then let’s sign it and let’s move on.” I didn’t do that because It didn’t and it didn’t feel right to do that because I felt like I had enough, you know, assurances that we could go for it. So we went for it and the idea was to tactfully and strategically de-risk the project as much as possible. And believe it or not, my friend, the CTO, understood it and the CEO understood it, and that simply meant it was going to be two things: We remove all of these extravagant and nice-to-have features that they always wanted way back when, came up along the way, or those that they would discover it would be nice to have. We started to slice them away and we told them that we need to remove these features because we’re going into a different mode. The mode is to get this project into a more stable version and once it is stable, we could then start stress testing it and then look into improving it. 

They were all up for that and they actually did that discipline task, which is not easy to do, which was to cut things out and to put them in the icebox. But we also told them the other thing that was just as important, which was that we needed to start testing. Not just internally testing, no, no, no. We need to start testing with the audience because every user is going to have a different machine and a different internet connection. We saw during our past stress tests events that things didn’t perfectly go well and we saw, you know, different users have different grades of experiences. But it was acceptable enough to get other information that we needed about the product and to continue production. 

We also assumed that these other streaming shortcomings would be improved by the streaming team along the way. And they felt confident that it could be done by just simply getting more performance servers and adding more upgrades like that. But the dark aspect of that was that we didn’t as a team, my team, had no control over the testing aspects of this product. We were constantly asking them for that saying, “Hey, you want to do a big party? How many do you expect? Oh a few 100? Well, we need to test a few 100, can you do that? Yeah, we’ll get on that and we’ll do that.”  And what happens? The CEO and his team were all now focusing on Halloween, setting up all this production, hiring the talent, and all that stuff takes time. But they didn’t quite take to heart how important it was to get a few 100 people into the next test. When they did the next test, they only delivered 50 to 60 people. So when that test happened, it was a success and the event was stable. 

There was a live event and everything worked accordingly, more or less. But we knew better and we were like “No, okay, that’s nice, but we know that it’s still not something to wash your hands off because you still need to replicate the event that you want to have. 

Morgan (Host): Question, at this point, could you have just taken the testing into your own hands like get a 100 people yourselves? 

Artur (Interviewee): No, no, no, that’s the unfortunate thing. Why? Actually, I’m just gonna back up because when he decided to go full steam into this thing, one of those clauses besides the payment and all this stuff, should have been explicit about. Also, you need to have at least two or three tasks, whatever the number is and this amount of people. That should have been explicit in the contract again and so as the target. And even the fact that afterwards I didn’t do that in the contract, and it came up that the first major stress test was only 50 and wasn’t the two or three or 400 that was required. 

I could have at that point walked away because it was another opportunity for me to just walk away and say, “Hey, you’re not providing this, you’re putting us in no more risk, we don’t like the way you’re testing this, we know it is going to be set up for failure,  if you don’t do this by the next week, then we’re walking away from this because this is blah blah blah.” We let that slide because we expected the next stress tests for them to do that. And again, they fell short. So what happened was during these meetings, Neil, the Cloud Guy, and the CEO would rightfully ask “well, Neil, what do you think, man? Do you think we could sustain like three 400? Oh, yeah, sure. Josh. No problem. I think we can. Yeah, we can do two three.” This is  because from his perspective, he was looking at numbers that were server performance. The server performance basically says, “Oh, I could, I could sustain.” He had a benchmark and at 50 users, the line was really low and stable. So he calculates “Well, five times that, that should raise the benchmark up to here, and it will be way below any kind of redlining no problem.” But here’s the thing; The experience is not about just how stable the server is and how well it sends out the information, but it’s also how well the client can receive and consume that high bandwidth information, how well it performs and shows you that information that the client and the customer is expecting.

Because the customer has variable bandwidth issues and variable processor device issues, that’s going to be all over the place. In order to mitigate that, you have to have some very fancy, multivariate and multi variable rates of server side video streaming and music streaming processes. It was mentioned that this was going to be done during our first discovery call with Neil and with the CTO. They had that foresight, they knew at some point they would need to be getting into that level of customization, so we as a team thought, “Fine, you guys are taking care of it. That’s your role and it’s in the contract so we don’t touch that. We didn’t think anything about that.” But apparently, that aspect of the code, of the server, was never really focused on. To be honest with you, it should have been maybe the first first thing. 

But even if it’s not the first thing, software development and especially agile development is that sometimes, it’s not a deal breaker. You can round trip back to that, after doing some tests, failing it, and saying, “Oh, well, actually, let’s tweak this, and let’s focus the next two or three spreads on that.” 

So when we had the main event, and prior to the main event, a week before, a few days before, we had an all hands meeting. We all know, you know, what the state of this thing is. The CEO even says “Guys, pep talk, this is going to be great. Everybody’s going to help and be all hands on deck. In case things go wrong we’re all gonna be reacting to it. Don’t worry if there’s things that are not going to be perfect, I will understand that.” So he said all the things that mentally one would need to think and actually embody as a CEO, and as an owner of a product, that you forced yourself into another accelerated high risk mode. And that you had expressed the ability of what they call “Fault tolerance.” You had enough of it to say “That’s accepted, the point is, let’s at least not have a complete blackout and disaster. Let’s try to avoid that.” They came up with some ideas there that were good, which was like, “let’s have a kill switch.” The CEO said, “Well, what happens if there’s like, 1000 people hitting that event? What’s gonna happen?” Neil would be like, “Well, we’re not sure. But just as a safety precaution, let’s have a hard number, like 300, that we would only allow in. If there’s more people coming in, we’ll just tell them on live chat and on the application, (he actually made an application that would send an error message that said, “Oh, this party is going to Well, it’s full, come back in a few minutes. 

Maybe you can get in,” You know, like the club. That was the way that they wanted to mitigate an over abundance of people hitting the event. That was it!  The rest will just deal with “I know that things are not going to be perfect.” We were like, “Okay, great. Sounds like everybody’s on the same mental plan.” We started the thing and everybody showed up on time, everybody wanted to log in, there were hundreds of people wanting to get in, and of course, everything kicked in as planned. There were people being shut out randomly. People that were supposed to be in the production that were either friends of the performers that had VIP access couldn’t get in. So I’m on intercom live chat, just scrambling away talking to all these people that are screaming at you and I’m keeping them cool. 

That was at least the most I can do personally because my development team was working with Neil, trying to look at all of these spikes and why the client application was throwing errors for the video bridge which is the streaming component. Saying “Video bridge error.” An hour into this chaos, we had about 60 people that were able to see the service, and then everybody else weren’t. There were multiple moments where the CTO was resetting the whole application. Even at one time we had to release a different version and asked people to download it again. They even managed to do that successfully and people did that. 

Two hours into this thing, the main big DJ that they paid a lot of money for it was about to come on and suddenly someone intelligently decided said, “Well, let’s just change the maximum capacity from 300, which is not working, to the 60 that we know that is. So once they did that, the party became stable. The DJ was there, everybody was doing their thing, and it lasted another two hours. We, as a team, got to finally test.. Sorry not test, but observe a live application and how people are using it. Because it’s a live chat application like a video conferencing application, I was able to get feedback directly from live users asking them all sorts of things. If they can do this successfully, what would they do differently? It was a golden opportunity for product feedback during the live event so I was doing that. My other team was doing some little tests along the way. 

Again, as part of the process, we thought personally, “Wow, that was like a close call, but we managed to salvage a party.” We’ve learned a lot of things because we pushed a stress-tested product the way we asked and we want it to do many, many, many weeks ago. Unfortunately it happened during this live event. Fine, that was a Friday and on Friday or Saturday after this thing, I emailed the CEO, I didn’t even go to my friend, emailed him directly very nicely saying “Hey, when you get a chance, I’d love to personally talk to you about the retro between you and me on what happened. My goal was to show him the silver lining of the failure that happened during the event because that’s how startups work. You need to know that you will be failing in different ways and there’s always a great lesson that you could take from that. It’s important that you do it because you paid a good price for this lesson, let’s leverage that, and let’s get it into the next production cycle. Let me personally talk you through that because I had no idea what the state of mind of this guy was, other than prior to a week before he seemed that he had the right optimistic and realistic viewpoint that we were already discussing with him. Now, Monday morning comes around and we had an all hands internal meeting which was just Neil, my team, and the CTO. 

He was like, “Guys, so, what do you think? How do you think that went?” We’re like, “Well, yeah, I guess you could see it as a failure. But, you know, we have these assumptions and we started talking about the idea of what we are going to discuss and focus on for that week.” We all decided on engineering, our team, and Neal, to focus on the elephant in the room which was the actual core streaming services, and make that fine tune to handle that kind of capacity. 

While my experienced CTO friend would rather, originally his idea was, to band-aid the client app, so that there was a way (if that overloading would happen again) that there would be a nice degradation of a user experience. We said, “Josh, let’s be realistic. Instead of spending all this time trying to make these band-aids, why don’t we fix the real problem that’s making these things. Why don’t we look into that? I didn’t realize this, I think he maybe knew in the back of his head that this is not going to be a simple thing. We all knew that and we were just hopeful and thinking that maybe Neil could solve this in a few days because he could do that sometime.

Morgan (Host): Question, In that conversation when you said “We all knew it wasn’t a simple thing, but we are hopeful that you could solve it.” Could you have done anything differently in that conversation, or should you have done anything differently?

Artur (Interviewee): No, no. The CTO was coming from a bit of a panic. He knew that he was going to deal with a big bomb explosion from the CEO and it was on his shoulders to come up with a strategy so that this guy doesn’t freak out and run away. Not only that, he’s also optimistic and positive that: A, we can solve this. And B, that it’s worth the unknown amount of time that it’s going to take and that he needs to be ready to finance that and to feel confident that we spent months and months on this. 

We’ve done a lot of great work and we are at the precipice of unlocking this. Let’s just finish and follow through to the end. That was his role and that’s what I said to Josh during that retro to enable him with the words and the energy that I could not have directly with the CEO because I asked for that meeting and he didn’t respond to me. Now the CTO would have that ability to start changing the vibe of this failure into a positive thing and to not give up. 

Because in our minds, it was like “My god, we really felt we were on the cusp of unlocking this aspect, which is important and we all knew it. It’s just for whatever reasons, nobody decided to focus on it. We had no control over it, we were always saying that this is going to be a problem, and it’s just a question of how big of a problem do you want it to be? Right? For some CEOs, it could be like, “Oh, well, it’s not a big thing. It’s not gonna kill our business because why? We’re not in the market yet. 

There’s no money riding on it. In terms of like, consumers are gonna be asking for, you know, money back. No, we’re still in the experimental phase.” So, if you were a seasoned CEO, you would have a fucking stomach for that kind of step back and you would look at it and opportunistic way. You would keep going like all CEOs who went through all the ups and downs, right? But you’ve got to have, you know, a different mind state, a different stomach, and we expected that to happen, which I believe everyone did. We worked for a week and Friday was going to be our schedule for the all hands meeting that we had every week with the whole team, but nobody sent us the calendar invite. Nobody said anything, it was all quiet all week. and then I get an email from my dear friend. 

He said, “I’m personally making this decision and nobody else told me to make this decision. The decision is we’re going to cut your team out, you designed to depth, and this is a very difficult decision for me to make especially because we’re all friends and basically I am putting my business opportunities in front of my friendship. I realized that and I’m gonna regret this decision.” You know, he tried to do this really softly, but there was this one paragraph that he had to, I think, put for himself, which was why he validated the fact that we had to be cut. He said that he felt that he didn’t have enough instincts and we didn’t give him enough information that he needed to have about this issue with the project. 

He said we didn’t tell him that the project couldn’t sustain that many people and that it couldn’t scale. He also felt like that was our fault and if that one paragraph was not there, it would have been very different. I was really taken to heart by that because that to me was completely delusional and it had no bearing on the truth that we all understood. So I called him up,we talked about that, and apparently he really believed everything. I tried to, you know, talk about this and I started to see a flag which was, “Wait a second, if he’s attempting to make a real case for our business being fired, then if that reason is propagated to the CEO, then that CEO will have a reason not to pay any of our past invoices.:

That was a very clear line that I saw and I told him that. I said, “Josh,  I’m not going to change what  you feel and what you think of. We could all talk about this as a team, even though it’s clear that you don’t even want to, to have a better understanding of who’s really responsible for this and blah, blah. But, you know, be aware that if you’re telling this to the CEO, he’s going to use this against us and he’s not going to pay us. You do understand that we need to get paid, especially at the end of your letter, if you requested that we continue working in a transitional capacity.” I said “If we can’t get paid, then all of that stuff is just not going to happen.” I tried to even pragmatically explained to him, that it behooves my friend to ensure that the way we’re presented in this fiasco is not so, I don’t know what the word is, negatively irresponsible to the point where we don’t get paid because that has a direct effect on our ability to save your ass to transition. 

Because if you were not part of the transition, you’re going to have a much more expensive and harder time. He understood that and he’s like, “You’re right, I believe you should get paid.” I said, “Great. Can I talk to the CEO? Can you give me his number?” “No, I’m afraid I can’t do that.” Okay, fine. Can you talk to him and express these points?” “Yes, I think so. But be aware I think they’re very rigid.” “Okay, do your best Josh, thank you.”

Days go by, I sent some nice follow up emails directly to the CEO but I don’t hear from him. I was very respectful, very nice, but at the same time, one of the emails, the last ones, was very clear. I was like, “Hey, can we talk as two CEOs to each other, very responsibly, respectfully, and can we discuss, you know, the situation?” That was it, just an open door, but still he didn’t respond. A week later I came back to my friend. I said, “Hey, I haven’t heard back from him. What do you think that means? I didn’t know what to assume. But can you tell me? Can you send information? Does that mean we’re gonna have to go as far as getting lawyers?” And he’s like, “Yes, I’m afraid so.” I’m like, “Wow, how did that come about?” He’s like, “Well, they’re very rigid, and bah, bah, bah.” It just seemed like he was kind of trying to be very nice to me, but at the end of the day, I could very clearly see his position was my ass or ass. He made a very clear choice and he chose his ass. Everything kind of went downhill from there. 

Morgan (Host): From there the disasters were legally understood. I think at this point, it’s past the point of no return and the objective of this podcast is learning so that we don’t reach a point. So from here on in, the listeners can use their imagination for how it turns out and it’s really really in everyone’s lives. So I want to wrap up, step back, with some bigger lessons from this. But first, I have one more question because you just mentioned a little fact that I hadn’t known. I haven’t heard this before but it’s interesting where you ask your friend for the CEOs email and he wouldn’t give it and also his cell phone number, what’s interesting about that is I understood if you work for Apple and your boss won’t give you Tim Cook cell phone number he probably doesn’t ever have to take cell phone number but can a tiny little startup to not like to even have the cell phone number of this of the CEO, that feels like from the very beginning another yellow flag.

Artur (Interviewee): Absolutely, it’s very important to have.

Morgan (Host): That is important for communication reasons. It’s like when you’re 4 people doing a little thing together, and they won’t even exchange phone numbers like that makes no sense. Like were you not friends from day one? shows you from day one.

Artur (Interviewee): To be frank, in my projects, we never used cell phones as a communication tool. We’ve always had slacks or used emails, there was never a challenge of communication. But here’s a perfect example where a number like that would be really, really important. Clearly, you know, sometimes I don’t want my clients to have my whatsapp just because you know, it’s my personal space and all that stuff. Anyway, here’s another would have been essential also for us. We worked on Slack, right? So slack became really like where all the documented communications happen, and especially in dealing with this kind of fast moving type of project is essential. Now what happened? Slack at this particular project and normally again, this is not something that we do but it just kind of came about. We did not own, we were not admins of the slack, our friend was. 

So what happened was when it was time to have evidence of the conversations that we had after we were fired, guess what happened to our Slack access? Josh turned off our slack access really quickly. I had to convince him afterwards, when I started to say, “Hey, I need to get some conversations to show the CEO when we were talking about getting paid, which at the time, my friend Josh was saying yes, you should get paid.” I said, “Well, in order for me to make my argument, I need to have access to him that would literally confirm our retention of these hours for this month. 

Would you mind giving me temporary access to slack to do that? He gave me access and I had to scramble and go through all these, and by the way I didn’t have all access. I had only DM access and I didn’t have group access. Unfortunately there was even more information in group access that specifically my development team told him about warning signs like “Hey, we need tests and about no we’re not confirming that we could sustain 300 people and this and that and this.” All that we don’t have access to but I managed to scrape up enough of a storyline. 

Morgan (Host): This is actually a good point. There’s a saying in the law “Possession is nine tenths of the law”, like just having this documentation, track record and also documentation, not just forces clarity, but it really helps people recreate the narrative to figure out what happened in these cases. 

Artur (Interviewee): Exactly. So there’s that and we also had Trello access. Trello was the project management tool and we had that at least, again, we were able to shut that off, you know, as a form of leverage to see. Because here’s what happened, after we were canceled they took the code. So our lawyer said, “Look, the contract states, if you don’t pay in full, you don’t have a transfer of ownership and that’s left because you own that property. So, you know, we didn’t want to make it easier and we didn’t have control of the code at that point. I mean, we had our copy, but they had their copy. The only thing we had control of was the project management backlog and Trello, which is very important, you wouldn’t need that if you need to continue the project.

Morgan (Host): Understood. To wrap up, this is an intense story built up like a movie script. As you discussed it, we articulated a bunch of different lessons during the conversation. I actually took notes and now just to wrap, do you have any higher level, bigger, bigger lessons like that. Now we’re in the details. 

Artur (Interviewee): Yeah, big lessons. Be very judicious in choosing the right kind of clients. I would say that you should do as much due diligence and background checks on the client.

Morgan (Host): That’s a good one because usually, clients do due diligence to the people that they are hiring, but if someone wants to give you money, people don’t do due diligence on their clients enough.

Artur (Interviewee): See what kind of businesses they’ve done before which is also very important because you may have like somebody with just an idea and some money but they just never, ever were CEO of anything and they worked in a big company. That’s huge and that gives you a good mental makeup of how you approach them. You know, you don’t want to patronize someone who’s done five startups before and tell them how to do startups, right? So these kinds of things. Beyond that, definitely have a contract that is as protective as possible that you have a lawyer to have them look at the things, you know, express to the lawyer what’s important to you.

If you say “Look, I want to have the lowest possible risk,” and that should include the payment terms so that they’re structured in a way that is as safe as possible, then that works for you and is very clear to the client. Beyond that, obviously understand that if you work with a friend, that by nature and by psychology, there is a tendency that you are gonna lower your guard  you are gonna lower your guard and not a good thing. Just keep things in check and in line as you would with any other person. I didn’t say that you can’t work with your friends, but always try to obviously, from the beginning, have a conversation with your friends like, “Hey, man, I love you, Morgan. You’re awesome! But when it comes to me and me working in the way that we’ve never worked before, I am going to express how you’re going to work and how you think and how you know it is going to be as much as a front as possible before you get into it. So that it’s at least consciously out there that there’s no surprises. 

Morgan (Host): You could even take it a step further and not just how you’ll work things through different breakdown scenarios. What if it turns out you suck at XYZ? And I’m frustrated that you suck, how do we deal with that? Just having that conversation and sticking through that beforehand, makes it much easier if that ever does happen? 

Artur (Interviewee): Absolutely, absolutely. When a project fundamentally goes and reroutes itself into a very different type of engagement, that is the perfect time to go back to the contract, to the lawyer and come back to the customer. 

Morgan (Host): I hadn’t thought of that one before and that’s a good one. When projects inflect or when they change, like something is happening, that’s a good moment to start a conversation about the terms of the engagement.

Artur (Interviewee): Essentially and in our case,  the plus of it would be actually if we are going to turn a new leaf and get into a new mode, then if there’s anything outstanding that needs to be made whole such as an outstanding invoice, this would be a great moment. Because to be honest, they are in the best mental position to mutually resolve that rather than a few months later when they’re like “Oh you screwed us because you didn’t make what I assumed you would do and it’s all your fault, and I have all this ammunition against you.” Real or not it doesn’t matter because they have the upper hand and it’s not a good place to be in at the end of the day. So yeah, that was, I think the top level thing. 

Morgan (Host): These are great lessons and this is the first one ever. I thought it would be 15 minutes but now it’s more than an hour and a half. You’re a talker but with the details really, paint a powerful story. This was great and thank you for your time Artur. To everyone who is listening, I hope you’ve made it through to this point. I almost want to put in an easter egg. Just send me an email if you actually listened to the hour and a half, let’s chat, and thank you to our guest. 

Artur (Interviewee): No problem. I hope that people will learn from the pain that I suffered. On the bright side, Brad Pitt is going to be starring as me in the lead role of an upcoming movie. We are still working on the poster, but yeah this would be a good and exciting movie. Thank you Morgan, bye bye.


This transcription belongs to Episode #1, please watch the complete episode here!