The power of III

Summum ius summa iniuria--More law, less justice

23 November 2011

Lesson for Entrepreneurs

Entrepreneurs beware: Never get into a project unless you are able to deal with positive or negative contingencies.

Case in point:

Rachel Brown, who runs the Need a Cake bakery in Reading, Berkshire, launched an offer via the money-saving website (Groupon) in the spring in which she offered a 75 per cent discount on 12 cupcakes, which normally cost £26.
However Mrs Brown vastly under-estimated the popularity of the deal and was besieged by 8,500 people who signed up for the £6.50 bargain.
She ended up losing between £2.50 and £3 on each batch she sold. She also had to pay £12,500 for the extra costs of hiring staff and sending the products out, wiping out profits for the year for her business.
Mrs Brown, who had only expected a few hundred orders, said that the experience was “without doubt, the worst ever business decision I have made”.
“It's been an absolutely nightmare,” she said.
Link to the Telegraph.

Thanks, Groupon!

The lesson goes for most professions, actually. In the hospital once, I heard a radiologist who had done a breast biopsy, calling for a surgeon to do skin stitches for him when he inadvertently vacuumed the skin into the biopsy device, resulting in a hole in the patient's skin that couldnt be closed by the usual butterfly bandages. 

The surgeon fumed to him: "Never do a procedure unless you know you can deal with the complications of that procedure!" 
(Not to mention simple stitching is usually learned in med school...)