I made an $800,000 mistake at my job. It taught me what good bosses do when an employee screws up.
· Business Insider
Courtesy of Regal
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- A few years ago, Alex Levin said he misspent $800,000 on an ad campaign for a former employer.
- Now a startup CEO, he credits the experience for teaching him how to react when a team member flubs.
- Punishing workers for making a mistake can discourage them from taking risks, Levin said.
This as-told-to essay is based on a conversation with Alex Levin, cofounder and CEO of Regal, a New York-based maker of AI agents for customer experience. Previously, he worked at Handy, which was later acquired by Angi. This story has been edited for length and clarity.
I try to teach people at Regal that it's OK to make new mistakes, as long as you don't repeat them, largely because of my past experience making a major one.
Before starting the company in 2020, I was a senior vice president at Handy, an online marketplace that connects homeowners with local service professionals for home projects. I always tell people that my boss at the time, Handy's co-founder, spent more on my education than my parents ever did because of the mistake I made.
We were launching a new service for handymen, and I had a budget of about $1 million. The goal was to recruit as many handymen as we estimated we would need. We had to do this in a short period of time, so the pressure was high, and I was pushing the team hard.
Someone working on the project didn't check a box that would have set a daily limit on how much we would spend to advertise the new service on Google. This person was on a team that didn't usually use Google's ad product, and we ended up spending an extra $800,000 one month and got very little return.
Speak up fast
This was my fault. I was responsible for checking the Google account, and I could have looked at the spending every day and figured it out, but I didn't. By the time I noticed, it was too late.
I felt very guilty. I had wasted the company's money. I didn't know if I was going to be fired, but my first inclination was to tell people about it and not sweep this under the rug.
I asked for some time with my boss that day, and when I walked into his office, I explained what had happened. I'm sure he was pissed, but he took it in stride. In the end, we actually exceeded our revenue targets. But we could have made even more money if I had caught the error as I should have.
What I've taken away from this experience is that you have to raise your hand when things go wrong so you can quickly come up with a solution to prevent it from happening again. I always tell people I want bad news fast. Good news can be slow. You need to identify that you made a mistake so it doesn't keep happening.
New mistakes are inevitable
Another takeaway is that when you're doing things you've never done before, there will be mistakes, and as a leader, how you react will dictate how much risk your team takes going forward. If you punish people, they'll never take any risks. But if you don't hold people accountable for making the same mistake twice, you'll be an entity riddled with mistakes, and that's also bad.
What I learned is that in programmatic marketing channels, you have to set limits. The inventory is infinite. In some cases, the opposite is also true.
Because of what happened, we always set spending limits at Regal whenever we start using a new feature. So we did this with one of our infrastructure providers, only we set it absurdly low, at $100 per day.
Soon after, I had planned to do a demo of our product. I was really excited to be in front of a potential customer, but it wasn't working. Nothing would work. I then finished the call and asked my team what happened. It turned out that we had exceeded our infrastructure spend limit.
When mistakes are identified, it's not about placing blame. You have to figure out a process to fix it and move on. That's why we now have rules around setting guardrails, including when to raise them.
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