My Biggest Mistake
David Muret, co-founder of staffing and HR firm Viridian Staffing
While focusing on our duty to thoroughly vet and qualify job candidates, we forgot to vet our prospective client as well. BIG MISTAKE.
We had a potential client come to us in some distress having just parted with their master grower, claiming the individual had a toxic personality. Given the considerable challenges recreational cannabis producers in Washington State were experiencing at the time, we had become accustomed to new clients coming to us in varying degrees of distress about personnel issues.
Instead of taking stock of this client’s personality and state of mind, we instead rushed to the rescue, believing the right job candidate could turn things around.
During a subsequent due diligence investigation in which we spoke with anyone close enough to the situation to have a perspective, we realized it was actually the owner who was subconsciously sabotaging the business and anyone who touched it. In the end we were happy to cut all ties and wash our hands of the situation.
That reminded us of an important principle in business: the so-called 80/20 principle, which states that 80% of results tend to come from 20% of causes, both positive and negative. Meaning you can expect approximately 80% of your problems to come from 20% of your clients, underscoring the importance of qualifying your clients just as you would your own staff and strategic partners.
The histrionics we were forced to endure for forgetting this important principal ended up costing us days’ worth of productivity.
Michael Pycher, co-founder of MMJ delivery app Nestdrop
The biggest mistake seems to be more of a perpetual hurdle that we need to do a better job of overcoming.
The marijuana sector is a space ripe with boundless potential that we haven’t begun to understand the full scope of. It’s also an industry still clouded with stigmas and feelings like you did something wrong or there’s something to hide. For many, if not most, investors, it’s still something that they’d need to come out of the closet about – unlike similar industries such as alcohol, in which those same financiers would invest openly.
We’ve found that it’s equally important – if not more so – to very thoroughly educate anyone and everyone about the industry, and it’s our job to make them feel comfortable about it.
We’ve been surprised by the lack of clarity and the feeling of scrutiny investors feel surrounding the marijuana market. It’s as though their portfolio is a trophy case and the marijuana trophy will make all the others rusty.
We’ve realized it’s our responsibility to educate and do a mini-PR push for every single investor prospect we come in contact with. We’re becoming teachers first and entrepreneurs second.
Ross Kirsh, president of packaging firm Stink Sack
Early on we made the mistake of building our products to meet state cannabis regulations, which are notoriously volatile. After we brought the first child-resistant bag to market and had one of our bags used for Colorado’s first recreational sale, we saw a huge surge in demand, and ramped up production accordingly.
Just two months later, the government announced revisions to its packaging laws, and this tremendous upfront investment that we had made – including steel molds, pallets of bags and rolls of printed material – became basically useless.
Rather than focusing on meeting the new safety regulations, Stink Sack decided to create a product that would outpace regulations. We redesigned our bags with a focus on safety and had them tested and certified by a major laboratory.
By the time we were wrapping up our lab certification, the state of Colorado was announcing an entirely new set of regulations – and this time, we were far ahead of both the state’s requirements and the industry standard.
Mark Linkhorst, COO of vaporizer developer mCig
We have been in the vaporizer marketplace for several years. Initially, we underestimated the price point consumers are willing to pay for their devices. Our original devices were priced at the lower-end of the market, around $10. But, as we listened to consumers, we learned that they had a much stronger affinity for their smoking devices than we imagined.
To many users, what they smoked out of made a statement, as much as an elegant watch, high-end smartphone, or any other prized accessory.
After partnering with hip hop legend Rick Ross, we experienced major demand for our Rick Ross Boss Edition, which at a $99 price point was not only our most expensive model, but also among our top-grossing models for the year.
With this lesson in mind, we’re going way upstream in 2015 with a new line that will be priced around $1,000 and up. These ultra-high-end models are made with advanced materials like titanium and silver and allow for total flexibility in terms of types of material that can be consumed, and they can be further customized with personal engravings.
Bruce Nassau, CEO of Tru Cannabis, which operates several marijuana stores and grows in Colorado
My mistakes involve the leasing of shop/grow space in the marijuana industry.
We have acquired businesses that were failing due to lack of financing and managerial issues. In one instance, the acquisition included a short-term warehouse lease that was reasonably priced. When it came time to renew the lease, the ownership increased the price significantly, even though we had been assured that it would be reasonable.
I recommend that when acquiring an existing business or going into business for the first time, that you negotiate a minimum of a five-year lease with at least one extension and agree to the pricing throughout the life of the agreement. The best advice is to purchase rather than to lease warehouse space, if the capital is available for you to buy the location.
