The Ghosts of Start-ups Past: What Failure Taught these Entrepreneurs
Lessons from the crypt of unsuccessful businesses
PHOTO CREDIT: Getty Images
There's a lot that the dead can teach the living, and it's the same in business: by visiting the graveyard of failed start-ups, entrepreneurs can pick up a thing or two about how not to run a company.
Here are a few lessons that start-up founders in Southeast Asia have learned from having to bury their unsuccessful ventures.
1. Make sure you're solving a real problem
It's easy to get caught up in the thrill of building what you’re sure will be an awesome product. But many find out the hard and costly way that what they've created is, in fact, just a solution in search of a problem.
Chris Chong — who found success as co-founder of Beeconomic, a daily deals site that was subsequently bought by Groupon, followed by quick failures in the form of online grocery delivery GoFresh and photography marketplace AirClick — says entrepreneurs need to make sure that their product or service is filling a gap in the market.
“You have to have a natural problem that you want to solve,” he tells Inc. Southeast Asia in a previous interview. Be diligent with market research, and vigilant of changes in your business environment.
Melvin Soh, co-founder of Singapore-based Enlightened Profits, a company that holds workshops on personal growth, business, and marketing for entrepreneurs, agrees.
“A lot of people focus too much on their own business and don’t look up to observe the changes happening in the business climate… You need to create an offer that people actually want… So you need to pay attention to what people want and notice the trends and advancements, and adapt accordingly,” the young serial entrepreneur, with several failed ventures under his belt, says in this Inc. Southeast Asia article.
2. Know why you're in business
Aditya Herlambang, co-founder of the now-defunct Indonesian e-commerce site Shopius, advises other entrepreneurs to be clear about their goals and vision for the company before launching. He and his co-founder chose to bootstrap instead of pitching to VCs, but in their second year received some funding from angel investors, he says.
In an article he wrote detailing the failure of Shopius, Herlambang asks: “Do you have a life mission that you want to carry along with the start-up? Do you want to start a start-up just to sell it to some other company and become rich? Do you want to build [and] run a profitable [and] sustainable business?”
Herlambang didn't start Shopius with the goal of selling to a bigger company later on, or raising VC funding and eventually going public. He wanted to make the platform profitable and sustainable on its own, and when they saw that it was going to take a lot more time and money in order to stay afloat, especially given the fierce competition in the Indonesian e-commerce industry, they decided to shut down.
The key is to be upfront with yourself and others about why you're doing what you're doing. If the goal is clear, decisions will come easy.
3. You don't have to do everything yourself
Danny Taniwan is another person who is no stranger to the crowded and competitive world of Indonesian e-commerce. In 2014 he had to close Alikolo, a C2C platform that he launched by himself. He's applying the lessons he learned from that experience to his new venture, a private marketplace called Afforia.
One thing that the failure of Alikolo underscored for him is the value of teamwork. He started the company by himself and “relied on his own readings and on the help of angel investors who were his friends,” according to this Inc. Southeast Asia article. This time around, he enlisted the help of a friend, who now takes care of the technology side of things while Taniwan plays the role of “product guy.”
While going the solo-entrepreneur route has its own perks, it's good to keep in mind that teaming up with people who have complementary skillsets and expertise can be just as fruitful and rewarding.
Just be sure to pick your co-founders wisely and maybe steer clear of malevolent spirits: says Harvard Business School professor Noam Wasserman in his book, The Founder’s Dilemmas, about 65% of promising start-ups fail due to conflict between co-founders.