New startups hit the PR machine every single day, each promising to revolutionize some facet of our lives and to disrupt their entire industry. 60% of them fizzle out within their first year of existence, and a full 90% fail by year five. We hardly hear about these as sending a press release when a founder shuts the doors for the last time is hardly top of mind. This one-sided view of industry distorts the actual state of the startup economy, and removes any possible chance for others to learn from previous mistakes. Thankfully, the “startup postmortem” has become more popular both with the public and the press and large.
Recently, two such diagnoses were released for a pair of very different small companies. Sonar’s postmortem is an excellent antidote to the typical Quixotic charging of first-time entrepreneurs trapped in the Silicon Valley echo chamber. The Sonar social network was a press darling that promised to alert its users whenever a connection or potential connection was within walking distance. This so-called “ambient social networking” was all the rage – and continues to rear its promising head from time to time – and Sonar capitalized on that buzz to the tune of $2MM raised and millions of users in more than 100 countries. Alas, the users did not stay and the money dried up. The full read as to what happened is a bit lengthy, but well worth your time.
Flud’s postmortem paints a different picture. Unfortunately many new products, whether from a startup or a Fortune 500 heavyweight, are designed to be achingly beautiful but have ignored the key user pain. Lack of beauty is not pain enough, and Flud’s failure makes that picture quite clear. User demand is all that matters, while gorgeous UX is simply tensile. Look no further than Craigslist or Reddit for proof of that. Flud banked its life on the ability to deliver your preferred news sources to you in a seamless and beautiful package. Yes, it was another newsreader. No, they were not able to differentiate themselves. Co-founder Bobby Ghoshal detailed his experience of the train-wreck with TechCrunch, and it shows how easy it is to be seduced by secrecy and sparkly design rather than actual user feedback and alignment tests.
Thankfully the best entrepreneurs are now realizing that is behooves them to discuss their failures and learnings. By showing what went wrong, they prove to future investors that they have learned, all while providing future entrepreneurs with salient wreckages to learn from. Happy reading.
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