My $250,000 Mistake
I promised the founders that I would close the company’s first 7 figure deal in 12 months. I did -- with 3 days to spare.
In May 2015 we closed the biggest deal in company history: $4.5MM.
Not only was it the company's biggest, but it was also the biggest deal that I, at 26 years old, had ever sourced, nurtured, and closed. I was on top of the world-- yet little did I know that 2 days later, closing this deal would lead me to a huge mistake that would cost me two hundred fifty thousand dollars ($250,000).
I joined Elite Daily in May 2014 as employee #27, Director of Innovation and Culture, working for the Chief Strategy Officer. My responsibilities were simple: do whatever it takes to make sure the company succeeded internally and externally. I worked hand-in-hand with the founders and the CSO to innovate new products, develop our staff and culture, and bring in revenue. Lot’s of it.
Elite Daily was the American dream. It was founded by David Arabov and Jonathon Francis who were both visionary and some of the hardest working people I have had the chance to build with. I learned a lot with and from them. Elite Daily was a rocket ship. We were on a meteoric rise. We were unstoppable. We were publishing 100+ articles a day, producing videos that went onto becoming cultural movements, and every millennial knew who we were. To be more precise: 84.1 million millennials would visit us every month. That’s almost ¼ of the population of the United States. We couldn’t be ignored.
Google Analytics of Elite Daily Traffic
It started in the summer of 2014, my friend Marc introduced me to an executive from Verizon that was looking for an opportunity to better understand what content millennials were consuming, and more importantly, who was producing it. I’m always one for seeing opportunities out of every possibility, and so I welcomed her and her team to our offices. At first, the conversations were very standard and sharing formalities--NDAs, etc. After several weeks, my team started to feel that there wasn’t anything to explore because the conversations were too slow. My instinct told me otherwise. I knew differently.
I continued to nurture the conversation with Verizon. Email check-ins. Phone calls. Keeping the VZ team informed of our progress throughout the year. Sharing our consistent and rapid monthly growth of unique visitors and cultural resonance.
Around October/November, the Founders and CSO were focused on closing our series A round. I was not part of this fundraise but later learned that during one of these conversations the CEO of Daily Mail N.A at the time, who had just left his role of COO at Buzzfeed, had made a very realistic offer to acquire Elite Daily.
In December of 2014 the Verizon conversations began to pick up steam. The executives from Verizon began visiting our offices wanting to scope out our operations. To this day I think they couldn't believe that a bunch of 20-somethings were creating viral content, shaping culture, and amassing the monthly uniques in the high 90 million.
They had to see it to believe it. And frankly, I was all about it. Our team at the time was the best in the industry. We were the underdogs. And yet we were putting up the same numbers as Buzzfeed and Vice with less than ¼ of their teams. Our team was only 45 people.
The conversations were obscure but started to materialize around an offering for their new secretive product that was going to “change the landscape” (I chuckled as I wrote this). As we progressed, I kept our CSO in the loop and brought our director of video to support me in pushing forth the conversations. I was laser-focused on closing this deal and I needed help.
I remember this moment vividly, we were standing in the stairwell of our Park Avenue offices because we had no meeting rooms available. The three of us had just gotten off a call with a Verizon executive when the Director of Video asked the CSO and me about potential commissions in this deal. My instinctive reaction was not to ask about myself just yet, and instead focus on putting the company first, closing the deal, and delaying the conversation about commissions until after. the CSO was happy with that. This was my first mistake. I failed to communicate my needs out of fear of being rejected and being seen as greedy.
On Friday morning, January 30, 2015, I walked into the office being set up with a breakfast buffet and champagne bottles. I thought to myself, “Nice, they must have closed the round.” Unbeknownst to me and the rest of the company, the CEO of Daily Mail N.A. walks in with the CEO and majority shareholder of the Daily Mail. Standing next to them were the CSO and our founders. Elite Daily (ED) had been acquired by the Daily Mail. The deal was completed at 12:30 a.m. Friday: a $40 million to $50 million acquisition, all of it in cash. That morning we celebrated in true fashion. A bunch of 20-something underdogs had made the impossible, possible.
Elite Daily Team Celebrating the Sale to Daily MailThe best part of this was that the ED executive team had NOT mentioned to the Daily Mail anything about our conversations with Verizon. It was going to be a surprise. The acquisition immediately gave me the perfect excuse to “follow-up” with Verizon to accelerate the deal. I had leverage.
After months of back and forth with the Verizon executives, while trusting my conversations with the founders and the CSO that I would be taken care of with commissions if this all worked out, the deal had hit a bit of stagnation. In true fashion, I scheduled a follow-up meeting with the VZ team to introduce them to our new owner. In reality, we were going to use that meeting with them to check in on the status of the deal. Low and behold, as we walk into the corner meeting room with a picturesque view of Bryant Park, my heart racing: the VZ executives hand us a SIGNED copy of the contract.
THE DEAL WAS CLOSED.
What a relief. On our subway ride back, the CEO of Daily Mail N.A. kept looking at the contract. He couldn't believe it. Later that day he held a meeting at the Daily Mail office to announce the deal. I was told by friends who were there that the CEO of Daily Mail N.A. called it the biggest deal he had seen for content production. What a win for my team and me.
Indeed, it was the biggest deal in our company history. The year before Elite Daily had $7mm in revenue programmatic revenue. Now we had a $4.5MM deal to create more content and grow our team with a 66% margin of profit. Truly, it was game-changing. I say this to provide you context for the following.
Two days after closing the deal, I was filled with a charged energy that was a mix between anxiety and frustration that the CSO had not reached out to me to discuss the bonus we had agreed to revisit once the deal was closed. I felt myself becoming triggered and angry. In my overthinking, I was sitting at my desk in the tech room of our Park Avenue office when I was speaking to our CTO and VP of Engineering about how to approach this matter. Their advice was quite simple: send an email. But I wasn’t prepared for what would happen next.
As I sent the email to our CSO and the CEO of Daily Mail N.A., I realized the mistake I made the moment I sent it: I asked for a commission, not a bonus.
The CEO is an incredible entrepreneur and one of the best negotiators I've had the chance to work with. He used this power against me. In his response, he mentioned that I was not a sales guy and I wasn’t subject to commission. I became angry, he was getting under my skin. I fired off another response, trying to prove my worth with anger versus dialogue. I was in an emotional spiral. I made this conversation personal. Then the CEO sent one message that ended the conversation: he called my request for a 5% bonus of the total amount of the contract (mind you industry standards at the time were10%) SELFISH.
This blew my lid off. “Selfish? This mother fucker thinks I am selfish?” I said out loud as I stood up at my desk.
In my perspective, I had put the company first for the last twelve months and I was told many times by my founders and CSO that I would be taken care of.
I felt personally attacked.
This guy had no idea the number of sacrifices I had made internally to focus on this deal, especially when my bosses at one time had no vision for it and, he wasn’t even aware of the conversation in the stairwell with our CSO where we had agreed to do commissions/bonuses after the deal was closed before the acquisition even happened.
This is the moment I lost the $250,000. I became emotional, I wanted to prove something to this guy.
We had an emotional back and forth over email that only lasted 12 minutes. He was mopping me across the board and rightfully so. Rule 101 of negotiations is to never let your emotions get the best of you. I failed. Even as I write this article I get transported to that day and I see how my emotion and tension were driving the conversation.
At the end of the day, we agreed on a one time bonus of $15,000 which of course at the time something is better than nothing. However, I had learned my lesson.
A few takeaways from this experience in my life:
Upfront & Center: Communicate your needs on commissions, salaries, bonuses
I used to fear communicating my needs out of fear of rejection. Now I communicate my needs articulately and kindly so that they are met. If they are not met, it may not be the right deal/place for me.
As important as clarity is timing! Now I always negotiate my bonus structures, commissions, and any monetary terms upfront regardless of how the other party feels about it. This is now part of my non-negotiables. You have no leverage trying to negotiate for yourself if the other party’s outcome has already been achieved.
Not everyone will treat you the same way you treat them.
Your standards and integrity are yours. Not theirs. Don’t expect everyone you interact with to practice them. Hold your values strong, people will rise to the occasion and meet your needs. People-pleasing never achieves your desired results. Don’t burn yourself to keep others warm.
Get it in writing
In this deal I had a verbal agreement with the founders and the CSO-- we had an agreement that I trusted. When control of the company changed hands, the verbal agreement we had in place had little to no standing in the eyes of the new owner. Having a contractual agreement in place gives you leverage that is required in negotiations regardless of who is in control.
Don’t make permanent decisions on temporary emotions
I always sleep before deciding or committing on any deal I am negotiating. If I feel the deal and/ or myself are being rushed-- it’s usually not the right deal.
If I get emotional in any way during negotiations - either positively or negatively - I take a break. I walk away and come back when I feel centered. Business is not personal, and emotions make you vulnerable. The best outcomes are driven from a cool and collected mind and aligned heart.
This deal and my mistake taught me a lot. I still bring many of the lessons with me as I continue to grow. Looking back at it I laugh because of how young and naive I was. I am very grateful for this mistake -- like all mistakes, especially big ones, it is an investment in my personal and professional development. Afterward, I was inspired to read every book on negotiations and emotional intelligence possible, and the growth this has spurred in me far outweighs what I lost at the time.
Subsequently, I immediately began to map out the next steps of my career. This led me to become one of the youngest members of the content strategy and acquisitions team at Verizon. And that’s a story for another day.
It’s important to note that I have no hard feelings for anyone mentioned in this story. Quite the opposite, I am incredibly grateful for all the lessons, shared experiences, support, and guidance they provided to help me shape who I am today.
If any of this resonates with you and you are ready to make the epic and powerful decision to move forward, to focus on your future, and to create the life you desire I am here to support you.
