In the wee hours of Sunday, June 26, 2022, I landed in Colombo, Sri Lanka. After more than 15 months of grinding on the Nimi business, we finally figured out the mechanics of hiring, training, and placing engineers in FinTech infrastructure roles. The company had a line of middle managers who ensured product delivery and customer satisfaction, and I finally had my first week of luxurious "thinking time." I felt on top of the world and was ecstatic about finally investing in Nimi Kash.
I had decided to travel to Sri Lanka with my family for a couple of weeks so they could enjoy all that the beautiful country had to offer, and I could spend some much-needed strategic time with the team.
In addition to all the challenges I highlighted in my last article, there were new, country-specific challenges that we had been working through for the first six months of 2022.
As a result of the Ukraine invasion, the global supply chain for critical commodities such as grains and petroleum broke. This caused prices in Sri Lanka to skyrocket for food and services. The Sri Lankan government had also made a series of poor decisions, bankrupting the country.
As a private business, we had to find a way to survive. We made several changes to the company to thrive in this challenging environment.
Even though these activities significantly impacted our margin, we pushed forward with these changes to have minimal disruption to the customer experience.
I have visited Sri Lanka almost quarterly since I started the business. This trip was unique, and I was excited about it. Many of the challenges we faced were behind us, the product development agency business was stable, and I was ready to hand over the keys to my head of engineering, Achini. I was excited because I saw the light at the end of the tunnel - I could finally focus on building Nimi Kash.
I organized a company management meeting for Wednesday, June 29, 2022. This gathering aimed to make the case to divert all our resources in the NimiX division to building the Nimi Kash product. The room was exuberant, filled with laughs. Everyone was smiling, and through the corner of my eye, I saw Achini - she looked like she had seen a ghost.
"Dilip, you need to check your slack. Our team was just informed that all the engineering leaders at the customer were laid off yesterday."
Achini and I had to jump on an emergency call with our team and our customer champion, one of the few who survived the brutal layoff. It was chaos. There was a lot of anger and negativity in the air, primarily because we did not see this coming.
We returned to the management meeting and had to break the news that one of our anchor customers might terminate us. The mood immediately shifted. We sat there for over an hour debating what we could have done wrong to deserve this outcome. Nobody had any explanation or any idea how to resolve this. I reacted to this with anger and disappointment. It was not my proudest moment.
But I had no choice but to relent. As the company scaled, I got further away from the customer. Only my team leads, and delivery managers knew what was happening daily. This created much anxiety for me. Our customers came from word-of-mouth recommendations from within my FinTech network. The only question going through my head was:
"Have I failed? Will anyone trust me again?"
After the anxiety from this futile exercise waned, I realized that complaining and arguing won't fix what had happened.
As we added customers and projects, I needed to delegate the operations of the business so I could create more time for myself to field new customer inquiries, as well as attend conferences for business development purposes. Since we scaled so fast, I didn't spend sufficient time training the team on following best practices for product management and software development. A lot was skipped in the interest of moving fast. The thesis was that we would figure it out when we need to. When I look back, I now know that the team didn't ask enough questions to create opportunities for me to teach them. And since I was busy with sales, I wasn't incentivized to dig deep anyway.
Going back to that management meeting - what was clear was that the plans for Nimi Kash were out of the window. There was no talk about R&D today.
Over the next few months, I would patiently work through my team leaders to try our best to save this customer. But the effects of the SaaS Crash of 2022 were already underway. We saw a decline in inbound interest, customer cancellations, and price negotiations. Some customers we had a long relationship with were in such a dire situation that they decided not to pay us.
As layoffs were occurring globally, the Nimi team continued to hire interns. My team leads gave me the confidence that we would make up this shortfall in income by growing revenue from our other customers. Nimi's head of engineering, Achini, performed a comprehensive industry salary analysis and requested that we raise salaries significantly. In some cases, we were increasing salaries for certain members by as much as 300%.
Achini convinced me that if we did not make these salary increments, we would lose the entire Nimi team to other companies in Sri Lanka that were still hiring. I had already spent 20 months with this company and was unwilling to let it go. As a CEO, I had to trust my team, right? All those business books told me to delegate authority, so I did and supported this decision.
Nimi's financial situation was becoming horrible as the year was coming to a close. With the increase in salaries and reduction in customer revenue, we were cash flow negative. I had to cancel my Q4 trip to Sri Lanka because the company couldn't afford it.
The Nimi team had put together a holiday party at a hotel in Colombo. Nimians were glammed up and were on a high. From their perspective, things were going great. The company was still hiring, was handing out some nice swag, promotions, and pay raises, and had just thrown a lavish holiday party.
The team called me over a WhatsApp video and asked me to say something inspirational. Due to the time difference, I received the call in the morning. I was exhausted from the night before from the stress of the financial situation. I remember saying something generic to the team and wishing them well for the new year. When the camera moved around, I saw that it was a massive group. I saw a lot of new faces, and I didn't know who they were. It looked like there were over 40 people in that room. Were they Nimians? Friends or partners of Nimians? I didn't know. But I knew I was responsible for every person there.
I had put my faith in my customers, my leaders, and my employees. I felt handcuffed that I couldn't make any decisions. I couldn't terminate an underperforming employee because he was critical to a customer project. Instead of terminating underperformers, we lowered our performance bar and gave them promotions and salary hikes.
In retrospect, I now know I waited too long. But I was stuck. The right thing to do for the company was to reset - tighten up the budgets, cut spending, freeze hiring, and even consider layoffs.
But I was unwilling to make any changes because I didn't want to be the bad guy. My inaction would do little to avoid the inevitable. And delaying cost us invaluable runway.
While bootstrapping had taken my eyes off the goal for why I started Nimi, it was scaling too quickly and the need to save face that had broken Nimi's business.
Dilip Ramachandran has over 15+ years of building teams, shipping delightful and highly successful enterprise software products in MarTech and FinTech at companies like Walmart, Experian, Marqeta and Bond.
Dilip wrote Gangsta Vision to help folks in product management to figure out their path and a plan to break into senior leadership.
At Nimi, Dilip is CEO and Chief Product Therapist helping high-growth FinTech startups with product and payments advisory and matching them with highly reliable and skilled experts in Sri Lanka. Learn more about Nimi at www.nimidev.com
Dilip has a Bachelor’s in Electrical Engineering from the University of Pennsylvania and resides in Oakland, California with his partner Alla, daughter Ariadna and son Wiley (a papillon-sheltie rescue). The family occasionally travels to Colombo, Sri Lanka for his work with Nimi.