One of My Big Business Mistakes: CNN
A Flourishing Start
This is about CNN. Not the TV channel, but something else. Something painful. One of my big mistakes. Not a relational mistake this time, I’ve made enough of those too, but a real business blunder.
And I didn’t make that mistake once, but several times. A character trait?
In 1994 (to be checked) I was able to acquire ZEB Electronics. (not without complications, read more about it here).
A computer shop, specializing in personal computers, with all the bells and whistles. We assembled them ourselves, back when that was still profitable.
We had a few salespeople and a technical service department. The shop primarily targeted customers who physically came in: individuals, freelancers, businesses. If businesses needed something, they would come to the shop themselves for purchases or repairs.
The Launch of ZEB Networks
The acquisition also included a team of three to four people in the technical service department, from whom the question, the proposal arose: “Why don’t we start a separate department focused on businesses?”
A network department, with on-site service, hourly rates, all the bells and whistles.
That’s how ZEB Networks came into being, as a separate department alongside the shop, specifically for businesses.
I myself always felt like a fish in water in the shop. Going on-site to businesses? Not my thing at all. I felt comfortable on my own turf, uncertain on unfamiliar ground.
The result? That department grew… but out of my sight, out of my control. Other people made decisions. I followed the figures, the accounting, but I wasn’t involved enough with the customers. I also knew nothing about network management or the associated software.
A Trusted Person
At a certain point, we needed an extra person in the shop. We hired a new employee. He grew, became a trusted person, and eventually moved to the network department. He took charge there, and did well. The department was running smoothly.
I trusted him completely. Not a cloud in the sky, I thought.
I wasn’t involved with that department.
That doesn’t mean I didn’t know the people or never spoke to a customer, but it just wasn’t my focus.
I almost never visited those companies on-site.
The Shock
Suddenly I received a message, I don’t quite remember how, that those five people from the network department had started a separate company: CNN. Goal: network management.
I was completely taken aback.
They had already sent emails to the department’s clients, to say that a new company was coming.
I immediately confronted them.
And I fired them all on the spot, for urgent reasons.
The Lawsuit
But then the trouble started: a lawsuit was filed against me for
Wrongful dismissal.
Because yes: everyone has the right to establish a company.
I couldn’t prove that they had deliberately “stolen” clients.
I had no emails.
I didn’t know those clients.
It was difficult for me to ask those people: “Do you want to testify against them?”
They were dependent on those technicians for their network.
And I had no proof.
And I had no replacements, not yet…
Their lawyers came from the union.
And yes… legally, I shouldn’t have fired them for urgent reasons.
Starting Over
I ultimately had to rebuild my entire network department.
Started from scratch.
I quickly called a few people, and we jumped right in.
We rebuilt it, better than before.
And this time, I was right in the middle of it.
But that moment… it sticks with me.
One of the lowest points in my entrepreneurial life.
Trust and Control
I trusted someone. And then they stab you in the back.
Is it his fault? Yes. He shouldn’t have done that.
But when money talks, when they see the figures… then some think:
“Why shouldn’t we do it ourselves? Why not our own company?”
And I didn’t know anything about it anyway, they might have thought.
In my eyes, they are still thieves.
But I also know: I made strategic mistakes.
Should I have known those clients better?
Should I have followed up more on what was happening there?
Then it might not have come to this.
But that’s all hindsight.
My Biggest Mistake
What was my biggest mistake?
I trusted people I shouldn’t have trusted.
There’s a saying, along the lines of:
“Trust is good, control is better.”
And that phrase has stuck with me ever since.