October 1, 2020

Fired our first customer (nicely)!

Dagobert Renouf @dagorenouf

Context: At Logology we design logos. Started as a high-end logo generator, we’ve found a way to also shake the custom logo design market. We think we can bring the same level of quality than a $2500 freelancer for a fraction of the price ($549) by automating key parts of the process.

We had a great customer who loved what we were doing, paid us $549 upfront for a custom logo and loved his proposals. But we fired him (nicely) and gave him a refund.

The reason is that we realized mid-way that he didn’t understand what he'd sign up for. He came to us for custom logo design work, and expected the same kind of service that a freelancer provides (lots of iterations and back and forth until client is happy).

The thing is that it’s not what we’re building, what we're doing is a mostly automated way to get high-end design work done, with almost no back and forth.

So it took us a few hours to figure out what to do. Should we keep working on his project, make some money and gain a happy customer (but for a different offering that we don’t think can scale at all)? Or should we cut our losses, refund him nicely and go back to making our true offering more understandable and desirable to clients?

Even though we could have easily done what he asked for, we decided to stay 100% focused on our product vision. We might disappoint him and lose a few hundred dollars, but we are saving time and energy to figure out the best way to solve this problem. Also, we keep working on what we love, and not what we left a couple of years ago (agency style work).

We're sad that we had to resort to refunding him mid-way through the project though, as we really hoped that it could work. It's just that we think our vision has the potential to bring way more happiness to people down the line, clients and designers alike. Better to take a small loss now than a big one later (having wasted time on the wrong things).

Thanks to him, we learned that we still had ways to go before our custom design offering can take off. Now, we’re back on the drawing board, but with great new insights we gathered from working with him. Next iteration here we come 🤠!

  1. 3

    Interesting post!

    I have some thoughts about it:

    First I think what you are trying to achieve is extremely hard to pull off, doing high quality custom logos without back and forth will definitely need some special customers.

    It reminds me of Steve Jobs when he got his "Next" company logo done. As far as I remember the story, he paid 100.000 $ for it and was told by the Designer, that he will not change anything on the logo. He can either use that one or go to someone else (of course without a refund of the 100.000 $). Steve Jobs was ok with that and just used it exactly as provided.

    So this is basically your prototype customer, but I guess they are pretty hard to find.

    I'm not deep into logo design customers but for me it feels like there are the ones that just want something very cheap and the ones that really want something good.
    Your price tag of around 500 $ seems to me that it will not attract the "5$ Fiver gig guys" customer. And the people who are willing to put "real" cash into their logo design probably want to have a say in the design process (which will translate at least into some kind of a back and forth). So in my opinion your offering might be in some kind of customer nirvana where it just doesn't really connect with any measurable customer audience.

    So I'm curious if you can pull it off without changes to your current offering. So keep us posted, it's definitely interesting!

    Good luck! 👍🏽

    1. 1

      definitely need some special customers
      So this is basically your prototype customer, but I guess they are pretty hard to find

      My intuition (and personal experience) is that the market for this is plenty big, and that these customers are not hard to find at all.

      Marketers and designers are certainly not wrong when they say that a lot of thought and work should go into a logo—but I honestly don't think it's a must. A logo doesn't NEED to have some elaborate Mad Men story behind it to ensure that it will have a guaranteed psychological effect on its audience, as though that's possible in the first place.

      So many startups of the kind here on IH have neither the time nor the money to retain a professional designer. For many, many cases and products, as long as the logo is identifiable and memorable and doesn't look obviously unprofessional, who needs a million pointless revisions and iterations? The Next story is a perfect example.

      1. 1

        For many, many cases and products, as long as the logo is identifiable and memorable and doesn't look obviously unprofessional, who needs a million pointless revisions and iterations?

        I agree with you here, but my fear/hypothesis is that those customers in large quantities will either go the Fiver route or they want to have revisions (probably independent of whether they have their own special ideas or don't even know what they want and just decide what they like at the time they see it). And there are companies like 99designs that allow for revisions for around the price tag of Logology.

        I'm personally not a fan of either fiverr or 99designs but I think they are the kind of competition Logology is facing. And which a big part of the potential customers will compare them to.

      2. 1

        On that front, what we've noticed with our generator is that ~25% of people do not know what to ask for and actively want us to tell them what logo they need. Since we're heavily tailored towards recommandation, they really dig us and represent almost all of our customers at this stage.

    2. 1

      Thank you for your perspective, feels like you understand that space pretty well! You're right that the "take it or leave it" approach won't work in this form at that price point, I think it needs major changes too. I'm dying to share what we've been working on but it's just too early at this stage. Also, we've switched our focus on fixing major flows in our buying funnel right now (for the generator part). I'll post updates when we have some ;)

      1. 2

        Ok, will check it out, when you are ready to share! Keep building!

  2. 2

    Congratulations! I don't know about your financial situation but doing this is hard and specially hard when you need the money to pay the rent. Usually it is the right approach when developing a product, makes you focus. Event if the product fails you will figure that out faster.

    1. 2

      Yes! We have a main offering of catalog logos that’s been growing steadily for a while. This is what brings the money in.
      We see the custom logos as a “side project” almost. That’s why we can be ruthless with our experimentations. That way we get more shots at finding a truly ground breaking solution.

  3. 2

    Thanks for sharing, it’s always tough to fire clients!

    I think you’re going to run into this often with the mindset of “with almost no back and forth”. Logos are the heart and soul of the company and founders tend of obsess over their logo because it’s at the hype of their excitement about the company. It’s definitely a bit strange to get an autogenerated logo and be like “hey here’s your logo take it or leave it and oh that will be $550”.

    If this comes up more for you I would suggest adding an up charge to your product for revisions. Your site looks awesome, but any design company needs to have collaboration back and forth to make the client happy as design is so subjective.

    1. 3

      Thanks for your perspective! That's basically what the client said, and we totally understand that. Clients have been trained to function that way. Our vision is that it's because it's a problem with the design process, not because it's how it ideally should be.

      Currently, the standard logo design process is terrible and always leads to one party suffering in the end. Either the client suffers, because he didn't get what he wanted in the X amount he paid. Or the designer suffers, because he has to work more than he's paid for, and he has to just do what the client asks even if he knows it's wrong, to make the client happy.

      It's a terrible situation really, I don't know any logo designer who's consistently happy with design projects, and it's the same for clients.

      We're already getting some success in fixing that with our generator offer for small projects. So we're using that momentum to try and fix the bigger problem of custom design work for larger ones.

      We don't yet know what the solution will look like, we'll have to see after a few iterations. But one thing is sure, it won't involve a client asking for changes 5 times in a row, and a designer losing all creative joy in the process.

      It's likely that we'll fail, but I don't wake up in the morning to create one more design agency. Let's try to do something that really counts instead!

      Sorry I had to dump my vision on you like that. Your feedback rings very true, that's why it got me fired up. Thanks again 🙏

      1. 1

        I'm 100% with you. I, personally, am so happy I left the service industry for the product industry. The "customer is always right" attitude makes sense for marketing but makes life miserable for the business.

        And furthermore, the expectations design clients have are often ridiculous and misinformed in the first place. The fact that designers have to use absurd-but-effective tricks like deliberately showing poor designs first and tricking the client into making the right choice is very telling.

        I had one experience with some semi-famous logo designers who said, up-front, that they do NOT do an iterative process; instead they spend their time and expertise designing 2 or 3 of the best possible logos, and you take them or leave them. I REALLY appreciated that, and it always stuck with me.

        Anyway—solidarity!!

        1. 1

          Awesome, glad to know I'm not the only one 🙂

          One consequence of that "customer is always right" mentality is that it results in poorer work in the end. Basically the client doesn't trust the designer enough (sometimes, for good reason) and so ends up controlling everything, effectively removing any of the vision the designer had. The result will often miss that creative and interesting vibe that made the designer worthy of hiring in the first place...

          So I don't know how exactly to solve that yet, but it seems like we found a crack in the system with our approach to the generator. It might be a mix of the "take it or leave it" approach, more education of the client, and more proposals to choose from.

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