My darkest moment at Molzi

To those who were there, it will always be known as 'Dark September'.

We were super lucky that during the 4 years of running Molzi, most things went pretty well. Our timing was great, the team pulled together to see us through any hurdles in our way and we got a great result in the end. But there was a moment where I temporarily wanted to throw in the towel.

By this stage we were about 2 years old and our team was roughly 25 people. We had gone through the first testing growth phase and now were no longer a small group sat in a room together, but people based in multiple countries with the first layer of management in place. As much as I would have loved to be involved in all little decisions still at this point, I was having to learn to empower people to own projects and become less of a founder and more of a CEO.

At the same time, we had recently taken some investment in order to accelerate our growth and try to capitalise on the opportunity we had. Prior to the investment I had run a pretty tight ship. A large cash buffer in the bank and only taking on additional costs when there was a clear sight of incoming revenue to offset it. But now I was being pushed by investors to start putting the cash to work, to seek out additional growth. It took me a few months to get used to the fact that a negative monthly profit meant that we were being ambitious, not reckless. But early September 2019 I was about to take a sharp step backwards.

In order to service the growing demand for localised content on Amazon, we had started using outsourced translators to support the team we had in house. Usually the bills from this external supplier was £10's or sometimes £100's, so I never really took notice of them. But then one day I happened to open an invoice from them, that we were about to give the go ahead for, for around £80,000. Holy sh*t.

That was probably about the same about of money we had in the bank at that stage. It was a company ending amount of money. And we were about to spend it. And I wouldn't have had any idea about it until the supplier asked for their money had I not stumbled on the invoice.

My entire body suddenly felt freezing cold. But yet still somehow managed to feel extremely sweaty (apologies for the image). I had about 5,000 thoughts all at once.

Is this the only invoice, or are the others? What other costs do I not know about? If this is the cost of the work, then does our business model even work still?

I got the team together and quickly made sure we didn't sign off on the project. Initial disaster averted. I then asked the finance team to confirm if there were any others. There weren't. And then I went for a walk, for about an hour. To try and get my head around what I'd discovered and what I could do about it.

The biggest fear was that I no longer had control of the business. I had rightly let go of some of the decision making, but not provided any guard rails so the team knew what was possible or not. I had assumed that everyone would be as tuned into client profitability as me, but again hadn't given them any tools to figure it out.

Down but not out.

This felt like my first real failure as the CEO of Molzi and I immediately lost all confidence. I cancelled all of our growth investments and started planning ways to scale back cost and go back to my nice little simple profitable business. I asked the team leads to identify people that were not essential to the day-to-day business. I was ready to sacrifice growth for sanity.

It didn't help that September 2019 was the only month in Molzi's two and a bit year history where revenue wasn't going to be higher than the previous month. Instead of thinking what an incredible achievement it was to deliver over 24 months of successive growth, I focussed in on the 1 that wasn't. I called our lead investor and asked for a meeting to get some advice on what to do. Normally I am asleep as my head is about the touch the pillow. That night I didn't sleep a wink.

The next day I saw the investor and downloaded the full disaster. I can't remember exactly what he said, but I clearly remember the way he said it. You know when you feel bad turbulence on a flight, you find yourself looking at the flight attendants to see if they're calm or panicking. It was like that. His message was along the lines of "you've had a tiny setback and you've cancelled all the growth bets. Just go and sign another couple of clients". It was a pretty blunt reminder of how simple a service business can be. If you're not making money you can reduce your costs to balance the books. But it's much better to just grow your revenue.

I got home an added a tab to our business forecast spreadsheet. It was called 'Worst Case Cashflow'. I took the actual cashflow forecast and started adding in client resignations, revenue drops, you name it, I threw it at this cashflow forecast. And even the worst of worst scenarios we still had more than 12 months runway to turn it around.

It's odd that I seek therapy from a spreadsheet but this wasn't the first time I have and it's worked.

The next day the team didn't know what hit them. Action stations. We need processes for monitoring client profitability and budget. We need to turn the growth bets back on. What do we need to do to close the pipeline sooner. I needed someone to tell me that it was OK. And armed with that knowledge I could get my head back in the game.

I learned so much from those two days of darkness. I needed visibility without involvement in certain things. And more importantly the team needed visibility of the same metrics that I was monitoring. We were a much better company thanks to Dark September, and you probably already guessed that October 2019 was our biggest month ever.