Over on Medium, the creators of Wattage, a hardware-centric startup based out of Toronto, have posted an extensive postmortem of why their company failed, and it contains some handy lessons for anyone who’s trying to launch their own app or software platform.
Although Wattage produced a nice-looking pitch deck—which doubtlessly helped the startup with its initial funding—it couldn’t get the traction necessary to build an audience. “Being a hardware company, we focused on building prototypes to validate that our vision was technically feasible,” the posting explained. “Instead, we should have realized something far more lightweight, and as quickly as possible.”
That advice comes off as a variation of the “fail fast” ethos that governs many startups, and it makes sense: When you have limited money and only a short amount of time to prove yourself on the open marketplace, iterating rapidly is often the only way to reach your goals before the clock runs out. By the time Wattage decided to focus on a highly customizable radio as its core product (as seen above), it was too late.
If that wasn’t bad enough, Wattage suffered from a lack of focus. “We had grand plans for the platform and were only working on a small subset of features,” the posting added. “But we should have been working on even fewer.” Fewer features or a single product are easier for a startup to ship, which in turn demonstrates proof of concept.
The killer blow, though, came with funding: Wattage’s creators feel they played the venture-capital game badly. “In retrospect, it looks like we attempted to raise too much, too soon. Instead of raising a large pre-launch seed round, we should have raised a smaller amount from angel investors.” Nor did they feel ready to launch a crowd-funding campaign, mostly because they had little confidence in their product costs; there’s no point in getting a thousand people to donate to your project if producing their rewards ultimately makes the campaign a loss leader.
The posting delves into a lot more detail, but here are the key takeaways; call it your “Avoiding Startup Failure” checklist:
- Make sure your deks (and other materials) are sharp and focused
- Know your market
- The product/plan must work from the beginning
- Fail fast, release fast, and iterate fast
- Focus on a single product or small set of features at the outset
- There’s danger in too little money… but also too much money
- Make sure crowdfunding can be profitable
Got all that? Good. Nobody ever said that running a startup was easy, but with some preparation and acknowledgment of the risks, you can increase your chances of success.