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Be Careful / Vendors Can Wreck Your Plans

TheFunded.com Advice

Posted by Anonymous on 2009-01-18

Tags: Operations Vendors Development

PUBLIC:

For those who have recently been funded (for the first time) or bootstrapping with own funds, I write to you personally as fair warning. Be careful putting all your eggs in the performance of one vendor as key to your launch strategies.

We did just this.

Our team worked with a technology vendor to develop our application from Sept 07-Jan 08, which was when this company was to launch our product. It never got completed.

We hired a third party project manager to attempt at salvaging the project and he worked with them until April 08 ~ still nothing. All the while the revenue we were taking in (from our previous beta application) dried up.

The reason I am sharing this is because I just read a post about lawsuits and how long they take / expensive they are. So true. We canceled our contract in April after they still did not perform or deliver. Per our contract they still had 30 days to deliver. Instead they placed a lawsuit on us.

The short of it is over the past 9 months we've dived into financial heartache. No product delivered, nothing $$ returned to us, legal bills and no revenue.

Our contract is pretty iron clad - even encompassing a penalty fee for every day they are overdue with the project. But, how can you fight with the best legal team (ours) against a vendor that has an essentially free team with lots of time on their hands?

My suggestions: if I had this to 'do over' I would say --

My due diligence would have been much more in-depth to include our attorney pulling a complete past history at the county, state and national level of this firm. I would have requested more direct client referrals to check out. Also, I will never give money to a firm again until a product is delivered - no matter how large the scale. We actually gave them a security deposit which we've not seen since.

Lastly, I would have actually hired my own internal team vs a firm - even if it were temporary, to complete this project. Our own team would have been underfoot and where I could reach out, touch base and keep dibs on their time management.

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