Every failure has a lesson to teach

Sometimes all you need to become a success is to fail first. There are numerous examples around us. LinkedIn co-founder Reid Hoffman first started a social networking platform called SocialNet that failed. However, he attributes the success of LinkedIn, which raked in $1 billion in revenue in 2017, to his failure with his earlier startup.

If you are thinking about creating your own startup, you first need to look around. The failure rate for startups is too high. That should not discourage you but give you more opportunities to learn before stepping on the ground. You will probably still make mistakes but studying other people’s experiences will save you from repeating their mistakes.

Here are nine notable startup and product failures you should know about:

1. Beepi

Beepi.com looked like a promising venture on paper. The used car selling and buying marketplace was released at a time when such online marketplaces had a lot of potentials. They even managed to get $60 million Series B funding round.

It finally shut down in 2017 after being in business for over four years. The used car dealer DGDG tried to buy the startup but pulled out eventually.

What went wrong?

Beepi was a classic example of bad leadership and management. Some would say they went too big too soon. The founders were able to quickly raise a lot of money but did not spend it carefully. Apparently, the company was burning through $7 million monthly at one point just paying salaries which included very high salaries for top executives.

What lesson should you learn?

Money runs out eventually if you do not spend it carefully. Time and again, startups have failed because of running out money. For many it is simply bad luck, however, in the case of Beepi, it was bad management.

2. Google Glass

Google is one of the biggest companies in the world but it has its fair share of failures as well. Google Glass was a futuristic smart device by Google that brought a new twist to wearable technology. Even after much hype, it failed immediately.

What went wrong?

Perhaps it was a bit ahead of the time or it raised privacy concerns. Most importantly, it was super expensive for the masses. It just failed to connect with the consumers who did not see a much value in it.

What lesson should you learn?

Innovation is great as long as it benefits the consumers. Also, you have to do anything and everything including cutting costs to bring the price down if you want to sell your product. You need to set up a smart marketing strategy where you can offer discounts in a way that it benefits you as well as your customers.

Also read: 5 lessons I learned from a startup failure

3. Jawbone

When talking about failed startups, nothing could be of a bigger scale than the consumer electronics company Jawbone. It produced products like headsets, Bluetooth speakers, and fitness trackers. It raised over $930 million as a venture-backed startup. VC companies like Sequoia, Khosla Ventures, and Andreessen Horowitz invested millions in the company but it failed in 2017 and announced liquidation of its assets.

What went wrong?

Experts say that overfunding killed this startup. They artificially increased its valuation and the company was almost force-fed with funding. Their wearable technology failed to compete with the industry leaders Fitbit and Samsung. The company became only the second biggest VC backed startup failure according to CB Insights.

What lesson should you learn?

Too much money is not good either, especially if the future of the product is uncertain.

4. Yik Yak

When Yik Yak, an anonymous chatting app, was first released it became an immediate success. This was back in 2013 when the smartphone boom was happening and innovative apps were coming out. It became very popular among college students. However, it starting losing following after Snapchat came out.

There were many controversies as well involving cyberbullying and harassment. It peaked at $400 million. Then in 2017, it closed its doors when no one even knew about it anymore.

What went wrong?

Yik Yak picked up on a trend and could not live up to changing expectations and dynamics. Somehow, it lost its appeal and sound among myriads of other chatting and dating apps (Tinder, Grindr, and Snapchat).

What lesson should you learn?

Your startup idea needs to be pivoted towards a long-term solution and not just current trends. Also, adapting and changing is survival in the cut-throat world of digital startups.

5. Canadadrugs.com

CanadaDrugs.com started as a viable solution to providing simple mail order medications to millions of patients across the country. Before it could even test the time for success, they were shut down by authorities and left with a long legal battle.

What went wrong?

This company made a grave mistake of misleading the customers about FDA approvals. It was selling drugs saying they were being manufactured in FDA approved facilities. However, the truth was that they did not know where it was being made. The US federal prosecutors accused the people behind the company of illegally importing and selling misbranded and unapproved drugs.

What lesson should you learn?

Never ever cheat your customers and risk their lives. Not only is it unethical but can send you to prison.

Also read: Unfazed by 3 failures, this 20-year-old is building a new startup, with some big names backing it

6. Doppler Labs

Doppler Labs flagship product was the Here One, wireless earphone and microphone. It stayed in business for four years and raised a whopping $51.1 million. When the product came out, Doppler Labs anticipated sales of 100,000 Here One but only a dismal quarter of that actually sold.

What went wrong?

Doppler Lab ended because of faults in their product and their delayed release. First of all, few manufacturing problems delayed release which made them miss out on crucial holiday season sales. Secondly, when customers used the product, they found out that it only lasted about two hours on full charge.

What lesson should you learn?

Do not create a product you cannot sell. Also, there is too much competition and high-standards to face when it comes to producing hardware.

7. Wonga

The UK-based company Wonga has a somewhat typical story of the rise and fall of a company. It was a unique idea backed by private equity investors. It was a payday lender giving short-term credit at high interest. It was going well until it was not. Turns out people were struggling to pay back the money. The situation got so bad that it got a £10 million injection.

What went wrong?

The company started making good money but it soon became clear at what cost. When stories emerged about people struggling to pay back the credit, authorities started regulating the company. They also admitted that they were lending money to borrowers who could not pay back. Then there were too many complaints whose compensation was costing Wonga on average £550.

What lesson should you learn?

Profitability is important but do not get greedy.

8. Juicero

Juicero’s failure can only be described in one word: epic. The company started crowdfunding in 2013 but the product did not come out until 2016. And when it did it was an immediate bust thanks in part to a lot of negative press. The founder promised a high-end luxury juice machine that was much more than a juicer. The company raised a whopping $118.5 million.

Also read: Why failing your startup does not mean you are a failure

What went wrong?

When the machine was actually released, it used proprietary juice packs to squeeze the juice. The machine basically just squeezed juice out of the packets. Obviously, $699 was too much for such a thing.

What lesson should you learn?

Entrepreneurship is about solving problems not reinventing the wheel or in the case of Juicero, breaking the wheel.

9. MyBizHomePage

Founded by a serial entrepreneur, Peter Justen, the site worked with QuickBooks software to help companies keep a track of their finances. It was started in 2006 and became a quick success. At one point, the company was valued at $100 million. However, the company drowned when its site’s security was compromised.

What went wrong?

Founder Peter Justen did not want to sell the business and had issues with the company’s Chief Technology Officer. After the CTO was fired, the website suffered multiple attacks and crashed. The backup data was compromised and the site had to be shutdown.

What lesson should you learn?

Web security is extremely important. And so is working with people you can trust.

The Bottom Line

The bottom line is that every failure has a lesson to teach. And it is better to learn from other people’s mistakes than your own. Startups face an incredible amount of challenges and there is no magic formula for success. However, you can improve your chances by avoiding the obvious pitfalls.

It is quite clear from the examples above that even if you find investors and get all the funding you need, you might still fail. It is an ever changing world and you need to stay at the top of your game no matter what.

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The complicated relationships and partnerships among all the key players involved means the AI battle is more about alliances between platforms

There has been much discussion and dispute around who will be the winner in the battle for global dominance of artificial intelligence – the US or China. I discussed it in some depth recently.

However, viewing the AI war as being between just nations – most commonly the US and China – is drastically oversimplifying things. In reality, the complicated relationships and partnerships among all the key players involved means the AI battle is more about alliances between platforms than nations.

These days, most products and services are a combination of arts and breakthroughs from all around world. “Designed by Apple in California. Assembled in China,” sums up the globalised reality.

What’s more, the very entrepreneurs building AI technology often have complicated identities themselves. The majority don’t work with a nationalist vision of their companies. But they often do identify with brands and platforms.

Look at the established tech giants who are also leaders in AI: Google, Amazon, Microsoft, Alibaba, Tencent, Samsung, and IBM. Most of these companies are building alliances with each other in one way or another – usually through APIs which allow competitors and collaborators connect with their services – so long as they also stand to benefit from it themselves.

According to Kai-Fu Lee, author of AI Superpowers, the big AI giants (Google, Amazon, Facebook, Alibaba, Tencent, and Baidu) are mostly focusing on creating “AI grids”. They then “act as the utility companies, managing the grid and collecting the fees,” he said.

It’s the platform, stupid

Last year, I read Platform Revolution by Geoffrey G. Parker, Marshall W. Van Alstyne, and Sangeet Paul Choudary, a profound book that changed the way I thought about the tech race. I have since applied that thinking to AI.

As the authors noted, “In recent years, more and more businesses are shifting from the pipeline structure to the platform structure.” Examples include cloud computing and computer services platform Salesforce, which generates 50 per cent of its revenues through APIs, and Expedia, for which the figure is as high as 90 per cent.

Indeed, every tech giant is racing towards a specific goal in the area of AI. It is now about becoming the platform for AI, the new lifeblood technology that is being layered across almost every product and service rather than being offered as a separate module or capability.

The Watson AI assistant, a platform being built by IBM, is being used by companies like The Royal Bank of Scotland, among others, to better engage their customers.

Also read: How artificial intelligence is disrupting education

The reality, of course, is that we cannot easily predict who will win the AI race in the long term. The situation is further complicated by the growing number of impressive AI startups, some of which sprout from nowhere to become frontrunners in their respective industries in just a few years.

According to Lee, startups now have have opportunity to build “highly specific ‘battery-powered’ AI products for each use case,” instead of waiting for the overall AI platforms, or “grids” to take shae.

Don’t miss the AI moon

The point that I want to drive home, though, is that while countries like the US and China – and even the UK, for that matter – hold incredible potential for research and development in tomorrow’s AI technologies, we still ought to think in terms of platforms, not nations, if we really want to understand where the real war for AI dominance is being wrought.

Otherwise, we risk committing a technological faux pas equivalent of that great Zen saying, so well captured by Bruce Lee in Enter the Dragon: “It is like a finger pointing out to the Moon, don’t concentrate on the finger or you will miss all that heavenly glory.”

While countries, in this analogy, are the fingers pointing, platforms are unmistakably the moon. Just make sure you are not paying attention to the wrong thing!

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The startup will deploy the funds to expand to newer markets and geographies besides increasing its logistics network and supply chain across India

India-based B2B commerce company Moglix has secured US$23 million in Series C round of funding, led by existing investors Accel Partners, Jungle Ventures and International Finance Corporation (IFC), a member of the World Bank Group.

Venture Highway, Shailesh Rao (former VP at Twitter and Google), and InnoVen Capital also participated in the round.

The company plans to deploy the raised fund to expand to newer markets and geographies besides increasing its logistics network and supply chain across India. It also continues to beef up its integrated digital supply chain technology solutions with data science and machine-learning capabilities.

“The funds will play a critical role in fuelling our expansion efforts by optimising efficiencies in our focus areas such as technology innovation, analytics and building a wide logistics infrastructure network. We foresee that there is immense strength and scope of innovation in the B2B commerce space and the sectors we operate in. We are now focussed on our next phase of growth across diverse markets and going forward, we will continue to bring in new talent and strengthen our talent base,” said Rahul Garg, Founder and CEO of Moglix.

Also Read: The extraordinary tale of a Filipino geek who swam against the odds in life

Founded in August 2015, Moglix is a platform for industrial products catering to suppliers and buyers across the globe. With a team comprising 450-plus people, Moglix currently operates across 10 centres in India and caters to both institutional customers (B2B) and individual customers (B2C). It works with over 400 large manufacturing clients and over 250,000 SMEs. The team has built a network of over 5,000 SME and big suppliers across 25 states in India and brought them on a digital supply chain platform.

Anurag Srivastava, Founding Managing Partner at Jungle Ventures, said: “With businesses becoming globally competitive and decisions taken with the speed of thought, automation is the new keyword for any industry. Moglix has been performing commendably for the manufacturing sector and we are delighted to be a part of their success story.”

Moglix has previously raised pre-Series A and Series A funding of approximately US$6 million from Accel Partners, Jungle Ventures, SeedPlus and Venture Highway.

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How Nuren Group, Fave, and DahMakan are shaking up the Malaysian digital marketplace ecosystem

As with all traditional forms of trade, when it comes to eCommerce it is important to gauge consumer behaviour. This ranges from what consumers want to what consumers need, and bridging those interest points with capturing a market that’s actually willing to make a purchase.

This is the beauty of eCommerce: it revitalises conventional markets by introducing new and innovative ways to deliver products and services anchored on wants and needs. More importantly, eCommerce puts these products and services in a digital platform, making it accessible and convenient to use.

In the attempt to harness the power of digital as a means of powering Malaysia’s growing economy, three startups are coming up with ways to innovate the marketplace through smart solutions and to revolutionise customer experience.

Digital platforms enable businesses to cut costs and offer goods affordably

One problem that’s being solved by a startup is the need for healthy meals amid a fast-paced and busy lifestyle. Because of society’s growing demands, people have less and less time to prepare food for their daily meals. DahMakan, a startup from Malaysia, seeks to solve this problem by providing hassle-free, high quality everyday meals to make people’s lives easier.

They achieve this by delivering affordable and ready-to-eat meals at the push of a button through their purely digital platform, cutting out traditional F&B business costs. This allows them to regulate their prices and make sure their products stay affordable.

“Starting in Malaysia was the best choice we made. There is so much support from the ecosystem and people are generally curious and super supportive of new ideas and concepts. Malaysia is truly outstanding compared to the many other countries I’ve visited,” said Jonathan Weins, CEO and co-founder of DahMakan.

Weins credits much of his success to the collaborative help he has received from various entities. He enthusiastically adds, “the ecosystem and government linked organisations such as Malaysia Digital Economy Corporation (MDEC) are doing an outstanding job, and we are excited about the many upcoming initiatives!”

Also read: How Malaysia helps bolster the less glamourous side of tech

DahMakan has expanded to Thailand with their Thai office growing twice as fast as the one in Malaysia. Weins said, “The best way to deal with cultural differences and customer types has been to approach a new country with a completely open mind and without any assumptions.”

The food delivery startup was part of Y Combinator’s summer 2017 programme – the first-ever Malaysian company to participate in Y Combinator. It has since raised $1.3 million seed round in 2017, and a $2.6 million pre-series A in February this year.

He added, “we are about to close another funding round which will give us additional capital to continue attracting incredible talent, and to make high quality food accessible for everyone.”

Important for startups to have a strong sense of identity

Another thriving Malaysian startup is the Nuren Group, the largest female engagement platform in Southeast Asia.

Guiding women through their journeys of wedding and motherhood, Nuren Group operates content-driven marketplaces, which enable thousands of small, medium, and large global brands to sell their products and services. On top of that, they also run digital content and activation campaigns with their community of female influencers and celebrities.

The idea behind the company was simple: three years ago, they started as a wedding platform. But as their customers aged and shifted to different interest points (from wedding to motherhood), they knew there was an untapped market waiting to be addressed.

Their platform allows the company to retain existing clientele through a simple paradigm shift. What had to be consistent was making sure that their products and services always empowered women and catered intrinsically to their best interests.

“There are many opportunities and challenges ahead for eCommerce. Domestic players are facing competition from marketplaces that heavily subsidised and offer cross border cheaper OEM products. Merchants and platforms like us will have to master the combination of showrooming and webrooming, events, product demos, in-store experiences – focusing on after sale customer service,” said Petrina Goh, CEO and co-founder of the Nuren Group.

“We also foresee ecommerce companies that use data to predict consumer spending and trend setting to perform above the peers,” she added.

Nuren Group currently maintains a solid community of over 1,000,000 moms, 5,000 wedding businesses and 1,000 baby’s and children’s brands. With their regional presence in Singapore, Malaysia, and Thailand, they are assessing borderless transactions that enable their sellers to sell and fulfill across the countries.

Supporting the “old” by harnessing the new

The third startup we spoke to doesn’t appear to fit the eCommerce model that we know, but they are also certainly revolutionising the market in their own unique way.

Fave is a startup that focuses on helping offline businesses to succeed, by bringing them to new customers (Fave Deals), retain their existing customers (FavePay, Fave stamp cards), and reengage customers who haven’t come back to their stores, as well as leverage on their customers’ behaviour, trend and demographics. In addition, Fave provides comprehensive merchant solutions (FaveBiz) to enhance their understanding their businesses, and drive further growth.

Essentially, Fave digitally optimises brick and mortar retail stores that do not have the understanding and the capacity to digitalise their business practices. Doing this helps offline businesses to take advantage of data and tech in gathering new customers and retain old ones.

“It’s been great experience so far. We have built up a team of 200 people in Malaysia where all our products, technology, innovation, data, and so forth are performed from Malaysia for the region,” said Chen Chow Yeoh, co-founder of Fave, which has expanded its brand to Singapore, Indonesia, and built some presence in the Philippines, and Hong Kong.

“MDEC has been instrumental in helping us through this journey, especially in facilitating the process to enable us to bring in quality knowledge workers to join the team here, and make Malaysia our hub,” he added.

As of today, Fave is doing over 100 million USD worth of sales per year within its first two years of starting up. They are currently gunning to find breakthroughs that will score them their first billion-dollar sale.

Next steps for Malaysia’s eCommerce

All three startups agree that some work still needs to be done. Goh said Malaysia could provide more support through projects, endorsements, and recognition. “There should also be more collaborations or partnerships between conglomerates and startups to support innovation and growth,” she added.

This sentiment is echoed by Weins who believes that better terms should be made between investors and startups. He said the current investment frameworks tended to be unfair, which reflects poorly on how money is being funnelled into businesses – and the kind of businesses that are willing to accept those investments.

Also read: Navigating through Southeast Asia’s startup industry the Malaysian way

“Investment terms should be standardised, similar to other global ecosystems. I have heard from other entrepreneurs in Malaysia about very ‘erroneous’ terms from investors. We have to change this mindset here regarding this,” said Weins.

Yeoh on the other hand thinks there should be more industry-relevant academic training for tech-based professionals at a university level. He believes this would help the pool of talent in Malaysia become more ‘startup aware.’

Ultimately, all three startups are happy with many things that they have experienced in the Malaysian framework. Much of their success derives from support received from other startups in the ecosystem, as well as government-sponsored initiatives under MDEC’s helm.

This paints to a hopeful future for Malaysia’s startup ecosystem, and consequently enhances the positive view of the nation’s vibrant digital economy bolstered by its eCommerce sector.

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Patients can check clinic crowd and queue online, and receive queue notifications via text messages, in the comforts of their home

On a fine day, when his baby fell ill, Online Travel Agency (OTA) veteran Frederick Wong took him to a clinic to consult the doctor. Upon reaching the clinic after travelling more than 30 minutes, he found himself squeezed in the huge crowd. Wong had to wait for more than two hours before his turn came.

“There was no way for me to be informed on the queue status beforehand,” Wong tells me. “It was particularly baffling to me as to why this problem exists even today. So, I set out and committed to solving this problem once and for all.”

Wong started ClickClinic in Singapore in late 2017. ClickClinic is a web-based real-time online queue and notification platform for clinics. Patients can check clinic crowd and queue online and receive queue notifications via text messages. It tells you how many patients are waiting for the doctor, so you can make better planning.

Also Read: 10 social impact startups in Southeast Asia that caught our attention in 2018

“You can get a queue online for yourself and your loved ones without having to be at the clinic. We will send you real-time queue status notifications so you can stroll nearby the clinic vicinity at ease,” adds Wong, who previously worked at companies like OctopusTravel, Travelocity, and Expedia.

ClickClinic launched its first pilot in October this year. Wong claims currently it has a total of five clinics on board and has over 2,000 registered users.

“We recently on-boarded Island Family Clinic, which operates five clinics in Singapore. Thousands of their patients can now check their clinic crowd, get an online queue in the comfort of their home, and receive queue notifications nearer to their turn,” explains Wong, who until recently led the APAC business of OTA company TrustYou.

According to Wong, there are quite a few online doctor booking platforms in Singapore to help patients bypass long queues in clinics, but the majority of them are appointment and app-based.

“ClickClinic, on the other hand, is solving the problems of clinics. For our small market, there are over 20 million queue based visits per year. This does not include the queue-based specialists such as paediatricians, traditional Chinese medicines, vets and other queue-based alternative care providers,” he says. “Also, we find that is is not necessary to build an app for our use case, as it creates more friction than a web-based solution.”

ClickClinic considers itself a QaaS (Queue-As-A-Service), and charges an annual subscription fee from its clinic partners. The web app is free for the end customers.

“We are currently focused on growing in Singapore. Having said that, we already have enquiries coming from clinics in our neighbouring country,” he claims.

Talking about the challenges in the industry, Wong says that onboarding customers and training them is an arduous task. “B2B services require onboarding and training that I have very limited capacity. We can only grow as fast as I can onboard and train.”

Also Read: Doctor scheduling and healthcare news portal GetDoc raises US$1.6M to expand to Thailand

Bootstrapped so far, the venture is now seeking funding to grow quickly and aggressively. “Our product is now proven and scaling is now the priority for us. Hopefully, we will be able to get a good investor partner soon,” he signs off.

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