Tara’s business was almost an accident.
After realising that people were buying so many things, just to throw them away – she started a website, Buy Me Once, with the idea of changing that mentality.
It was a campaign to throw away the culture of throwing things away. And it went viral.
Soon she had left her full-time advertising copy job, and became a founder.
Her sunk cost bias began when she realised that the huge website she had created on Squarespace was at its maximum capacity. To continue growing her website, she was going to need to migrate it elsewhere.
Tara was recommended a friend of a friend who built websites, including branding and design. She didn’t have to pay anything upfront, which suited their position.
The mission was to turn their blog into a business. So they set up a meeting, briefed them on the project and got to work.
But as time passed, things fell off the wagon.
But to keep the project moving forward, Tara took on the elements that they clearly could not do.
Suddenly they were weeks down the line, and nothing had really happened.
The timeline was off, and the original people they spoke to were no longer in the picture.
All the signs were there, but Tara persisted.
The Consequences of Sunk Cost Bias
Tara was stressed that they had gone with the wrong people. She felt stuck with them.
She didn’t know what stage the project was in. But whenever she checked in, she was reassured it was okay.
There was no evidence it was.
The consequence was a huge waste of resources.
The PR launch was next week.
Journalists had been invited. They’d hired out a big venue.
And they’d already delayed the date waiting for the website. But the PR event was for the website, and she was unsure if it was going to be ready in time.
Tara has hired a PR manager for the event. And done a lot of work to create hype around it. But the whole event was reliant on this one unreliable team.
Maybe it wouldn’t happen.
The event was potentially going to be a massive embarrassment.
What were the Signs?
On reflection, Tara recognises that there were several signs and opportunities for her to pull the plug.
The first was the web design, which she recalls being way below the standard she was expecting.
Because she thought it was something she could fix herself, she let it slide. When this should have been the alarm bell.
But she had already been waiting for so long, she didn’t want to hear it.
In our conversation, Tara and I talk about what personal attributes led to her sunk cost bias. And how going backward every now and again, doesn’t mean you aren’t going to get to where you want to be.
We talk about
- Her different options in this moment
- How sunk costs often feel worse than they are
- The importance of due diligence and social proof for any hire
Tara’s story is one that many founders can relate to. It comes with important lessons for all stages of business — tune in to hear her advice to herself, if she could go through this again.