Failure

The Five Stages of Screwing Up

Repeat after us: It'll be ok.
The Five Stages of Screwing Up
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This story appears in the November 2016 issue of Entrepreneur. Subscribe »

MediaRadar had been growing at a steady clip and was about to launch a big new product. This was 2010, and the then-4-year-old company, which helps clients like The New York Times target advertisers, had created a tool to identify media buyers. “But instead of us taking a year to build it from scratch, we paid a third party that specializes in providing this exact data,” says CEO Todd Krizelman. It seemed like the right move at the time. But then the bad news started rolling in…

Stage 1: Denial

Almost immediately after MediaRadar announced the product, clients were queuing up to use it. But before the week was out, a handful had called to report major errors. “I thought maybe it was just a few bits of bad data,” Krizelman says. “But as we signed up more clients, we were compounding the problem.” Complaints trickled in. 

Related: This Startup Launched Without Titles Or an Organizational Structure. Here's What They're Doing Now.

Stage 2: Anger

Krizelman was furious at the third-party vendor, sure. But he was also mad at himself for how woefully unprepared his company was to deal with the crisis. “We hadn’t thought through how to problem-solve a product that wasn’t our own,” he says. And after just a few phone calls, it was clear the vendor wasn’t committed to cleaning up the mess itself. 

Stage 3: Bargaining

Krizelman began frantically trying to figure out how to right the ship ASAP. “I flirted with the idea of hiring an army of temps that could work around the clock,” he says. “I thought if we just rolled up our sleeves and worked hard, we’d find a way to rise above this.” 

Stage 4: Depression

Within a few weeks, Krizelman realized that there was only one way to save his company’s sinking reputation: Pull the plug on the failed product and refund everyone’s money. The process made him physically sick. “It felt like we’d violated our core tenet as a service-oriented company -- like one stupid mistake was going to unwind our client trust overnight.”

Related: How This Company Bounced Back After a Toxic Hire

Stage 5: Acceptance

When it was all over, Krizelman made it clear that he was the one who had messed up by rushing the launch. He started over, giving his product team two full years to develop a similar tool from scratch. It worked. Now the mistake is part of the company culture, and employees invoke the incident when they think a decision is being rushed. 

“I don’t think the scab will ever fully heal,” Krizelman says, “but we definitely got something valuable out of the experience.” 

Edition: December 2016

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