In our mad rush to encourage and support budding entrepreneurs, we journalists often only talk about the success stories: The ones with funding, the ones who exited and the Holy Grail of them all, the ones who reached unicorn status with a billion dollar valuation. Yes, the successes must be celebrated and lauded, but as the venerated Peter Graham often says: Nine out of 10 startups fail.
And there are lessons for all, including the failed startups, to learn from these failures so they can try and try again, till they succeed. Presenting now, the eight Asian startup shutdowns/pivots in 2015 in no particular order.
Lumos is a home automation IoT (Internet of Things) startup based in India, which was started in 2014 by three skilled engineering students from IIT Gandhinagar. It sought to make switches that could automate lights, fans, air-conditioners and water heaters, and even planned to automate TV, cars and fridges. The switches would have inbuilt sensors that would allow them to track ambient conditions and human presence to take accurate automation decisions. Additionally, they would learn from the user’s behaviour.
A dream come true — if the startup had delivered on its potential.
But the venture was doomed because the founders had technical know-how, but no practical knowledge of their market, no idea about PMF (product-market fit) and, in the words of Founder Yash Kotak, “We were trying to do everything for everybody.” An impossible task.
Hopefully, the intrepid trio of founders has learnt from their mistakes as they go about building their next venture: Fundamine.
TalentPad, previously Talent Auction, is a curated online marketplace started in 2014, backed by Helion Ventures with an impressive client list that included Flipkart, Housing, Zomato, among others. It even acquired a tech recruitment platform called Optimized Bits in May 2015.
While operational, the company claimed to have a revenue run rate of close to US$1 million and witnessed a growth of 50 per cent month-on-month in revenues. Citing that the market opportunity in the sector it was operating in was not large enough and that it couldn’t scale quicker, TalentPad finally shut shop in August.
Taiwan Startup Stadium (TSS) is a rare but heartening example of a positive pivot. When it started in August 2015, the startup was an ambitious project that was going to take the renovated Zhongshan Soccer Stadium by storm and use it for the good of entrepreneurs in the country. But, in just three weeks, on August 21, to be precise, the city designated the stadium to other purposes, leaving Taiwan Startup Stadium without…well…a stadium.
Taking this momentary obstacle in stride, Stadium Captain Anita Huang pivoted the mission and objective of TSS to ‘The world is your stadium’, and relocated its office. TSS then sent a pavilion of 12 startups to Tech Crunch Disrupt in September and conducted a ‘Ask your VCs Anything’ day in October, while tying up with universities, corporates and government programmes to keep progressing in its new, chosen direction.
Now that’s what we call the never say die entrepreneurial spirit.
Started in 2011, Rocket Internet-backed EasyTaxi was a contender in the ride-hailing space for the likes of Uber and GrabTaxi. It launched a cashless payment platform for the region and all was rosy with the company receiving a US$40 million series investment from Russia’s Phenomen Ventures and Germany’s Tengelmann Ventures among others.
Then it began facing regulatory problems in Taiwan and had to cease operations in Hong Kong, India, Pakistan and Indonesia due to local competition, while conducting layoffs in Thailand and Malaysia.
EasyTaxi’s Facebook page revealed problems about the app not functioning well and driver credits getting refunded, which added fuel to the fire. The last to fall was the Singapore office in September. Now, EasyTaxi has withdrawn to its home ground Latin America to fend off a possible expansion threat from other ride-hailing giants, namely Uber.
Goes to show how over-expansion without understanding individual markets never pays off.
Also Read: Hits and misses in Asian startups in 2015
Singapore’s Pirate3D began two years ago as a Kickstarter campaign crowdsourcing for a 3D printer for the masses called Buccaneer. It made news for having raised more than SG$2 million (US$1.43 million). But after failing to build product and with 60 per cent of unfulfilled orders in October, the press was merciless and the brickbats began.
Co-founder Brendan Goh admitted to a cash flow problem and the lack of experience being key issues that held the startup back. As of now, Goh claims to “need to go back to basics: Build a machine that we can sell well, generate profit for the company, and out of the profits, we will do the fulfilment.”
Abratable and AbraResto wanted to take on online foodtech giant Zomato and fought valiantly for two years before breathing its last. Begun in November 2013, the startup managed to raise US$1.5 million in funding (a part of which was eventually cancelled) and even launched a new and attractive loyalty programme ‘Carrots’ for its patrons.
In an effort to scale up, the company even closed a term sheet with an undisclosed family fund in Indonesia in May 2015. By August, negotiations had broken down and the deal was off. Despite trying alternative avenues of funding and trying to keep the company going, Abratable and AbraResto closed down in October.
IDG Ventures-backed e-commerce startup Project Lana had a lot going for it: an inventory of around US$100,000, an ERP system in which it invested tens of thousands of dollars and branding itself as ‘not a startup’. Yes, it was able to bring down zero-to-launch time within a month and a half for all its verticals and it was an IDG baby. But without cash infusion, adequate time and a customer acquisition strategy, that is key to succeed in e-commerce, the startup died a quiet death in November.
Project Lana pivoted down to Beyeu.com, a diaper-selling site which eventually had to close shop. The website is just a single page announcing ‘Project Lana is a leading Internet company in Vietnam with a focus on product and services for women.’
A sad end to a once-promising startup.
Founded in Australia in 2013, Play2Lead is a gamified and social audience interaction platform that has been nominated for several global awards, already. The application helps corporation trainers run activities including quizzes, polls, and activities so that employees across the organisation can engage and learn, then reflect, and move them closer towards the desired behaviour change.
But since its market was regional and the company wanted to expand and find a better product-market fit, the team joined the 100-day intensive programme, JFDI Accelerate, in Singapore. It was there that Founder Theresa Lim came up with the company’s new vision: We help companies deliver excellent service by making training fun, memorable and measurable.
And now it is one of the starring graduates of the JFDI 100 Day programme. Now that’s what we call a happy ending.
That’s the list, folks.
And while these particular ventures may have failed to achieve traction or pivoted from their original mission, the entrepreneurs behind them like Brendan Goh, Anita Huang and the IIT boys are sure to come back swinging in the new year with fresh ideas and more funding.
May the odds be more in their favour in the New Year.
Image Credit: lenetstan/Shutterstock