Anatomy of a Failure

By Dave Hataj

Every person in the history of the world can tell stories about their failures. In business, we perhaps have more opportunities for failure than most people because we’re risk takers. One of my biggest failures started 15 years ago, and I’m still paying for it. Or, put another way, I’m still reaping the benefits of the lessons. 

It all started when an engineer friend of mine started the conversation with, “Don’t say no! Just hear me out.” That Should have been my first clue to kick his butt out the door. 

He had redesigned an old machine with new technology and was convinced there was a huge need for it, and he needed a machine shop to build it. My initial instincts were to decline his offer, as we were a gear shop and this wasn’t a gear. However, agreeing to think about it, I sought the counsel of my staff and everyone agreed it sounded like a great opportunity. I seriously prayed about it for several days, but there were no obvious reasons not to say yes. 

However, something didn’t feel right I had this nagging sense that I was walking into a storm—and that I was supposed to. So, against my better judgment, I agreed. And thus, we started a ride into the abyss that we wouldn’t get out of for over a decade.

Before I knew what hit us, we were $300,000 in the hole with no strong sales prospects. Things then went from bad to worse. One of the engineers had spent some time in our shop and had downloaded pirated software onto one of our computers. Suddenly, I was getting legal notices that stated we were in violation of licensing laws and we either had to pay tens of thousands of dollars in fines or be sued.

The entire venture was, by far, the worst business decision I had ever made. Bankruptcy was considered, but only as a last resort. I was always taught to do whatever it takes to keep your word and pay your bills. Besides, my parents had spent a lifetime building a reputation of being trustworthy, responsible, and frugal, and I had no intention of screwing that up. 

So, we buckled down and turned one of our machinists into a part-time salesman. We continued to advertise online, and slowly the inquiries came in. As we’d done at Edgerton Gear, we approached every potential client as another opportunity to serve someone rather than as just another potential sale. Within a year, we’d sold a few machines. Within five years, we sold a few more. A full 14 years later, we finally broke even and made a little profit. In the short-term, we failed miserably. In the long-term, the business has been far from a success, unless you define success as breaking even after 15 years!


David Hataj is president and co-owner of Edgerton Gear, Inc. This is adapted from his new book Good Work, How Blue Collar Business Can Change Lives, Communities, And the World.

One thought on “Anatomy of a Failure

  1. As Bob Dylan says,” there’s no success like failure and that failure’s no success at all.”

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