After things hitting the wall, the five reasons entrepreneurs fail summary hunting cloud network June 18 report (compiled: white) Note: Yash Kotak Indian startups FundaMine co-founder, with several partners in the field of things after the breakdown of business failure error committed by team . The following summary of its business history and: start from scratch networking hardware products designed to obtain angel financing, after five consecutive months of frenzied work 14 hours a day, I and two other co-founder of a sudden woke up from a dream! Our products did not seem to market! The harsh reality abruptly in front of us, unless we come up with a viable solution or we start our future darkness. At this point it in December 2014. Prior to this we have been busy Imagine a better future, but never realized we had no experience actually committed countless errors. Although we believe that failure in the business world is the best teacher, but failed in the end it is a failure, we do not want such an outcome.
Today I had to list the wrong committed, with their own painful lessons start on the road to remind you not to repeat it. Date: July 2014 Let's go back a few months ago, look at the background of the situation at that time. In July 2014, we began to build a smart network and switches are connected through these switches and network can record the user's behavior and automatically control all electronic equipment at home. We found it all originated in life, everyday search results and newsfeeds are highly personalized features, but every day we consume a lot of time on household electronic equipment rarely personalized element, which is undoubtedly a major shortcoming, but we just discovered this shortcoming. So we devised an intelligent switch, you can learn the user's behavior, set up an electronic device according to the user's home personalized habits. Even companies that we want a good name, called \u0026 ldquo; Lumos \u0026 rdquo ;. (Note: The Harry Potter series of stories in the mantra, meaning \u0026 ldquo; Lumos \u0026 rdquo;.) Then we got some investment from an angel investor hands, then back to our alma mater began to join the incubation program. Finally, in an experiment, our Lumos adventure kicked off! We dove into work. Polytechnic male is this: If you give us some interesting task, we will dedicate to it, you can put the whole world behind. Our first prototype outcomes \u0026 mdash; \u0026 mdash; automatically control lighting \u0026 mdash; \u0026 mdash; 45 days after joining the adventure successfully tested. The second prototype \u0026 mdash; "digimon cosplay costumes " \u0026 mdash; can automatically control lighting, fans, battery converters and food \u0026 mdash; \u0026 mdash; the next month after successfully completed. Production standards in accordance with the hardware, our efficiency is simply scared to Heaven. Date: November 2014 mid-November, we have ushered in a new team of product designers, to help us complete the final product design. To 12 months, we have invested in and discuss their next round of financing. Click here to progress, in less than a year's time with our hardware products can enter the market. We are satisfied.
Our investors are also satisfied. The future looks bright. Date: December 2014 until awakened by the moment, we realized the grim reality. We underestimated a hardware products to market to do the preparatory work. At the same time we need and usefulness of the product is far too optimistic. Cost of sales of hardware products is generally the hardware itself costs 4-5 times, and we actually have to have no consciousness? ! The price of the product, we are ridiculously wrong. When all these terrible facts together before, you can imagine we Xinrusihui. Date: January 2015 to April and then we have to face the end of a nearly fatal turn this company. We have made a bigger mistake \u0026 mdash; \u0026 mdash; The things separated into a separate section. The result is one of the three co-founders dropped out. But this is another long story, let us not go into the details today. The above is some background on start-up companies. Recalling this experience, I summarized the five most deadly mistakes we committed in Lumos, and lessons learned. One mistake: We know nothing about the product being designed. We have never been used in their own homes existing home automation products.
Things we are not experts in the field. When you are ignorant of certain things like, when you make decisions easily troubled Kruger effect. The so-called Kruger effect, Wikipedia defines it as a cognitive bias that smattering of people tend to overestimate their abilities, are unaware of their own ignorance. However, because we do not know anything about and overestimate their own abilities. If we already experienced intelligent switch products, we know that increasing the value of our products is very limited. If we have more in-depth professional knowledge of things, we will know the true price of hardware products and build a market-oriented hardware products where the difficulties. Avoid this one wrong, then you can avoid a series of errors arising therefrom. Lessons learned: In your familiar with the area or areas have become sophisticated users to look for opportunities and development. If you know nothing about it still insisted before the trip, it would be as a professional or experienced users this field. For example Homejoy founder Adora \u0026 middot; Zhang, in order to understand the domestic cleaning industry, she had personally when a return to vocational cleaner. Error two: before you start building the product, we have no idea of all aspects of due diligence we do not know enough about the market and face competition. We did not find out our customers crowd \u0026 mdash; \u0026 mdash; do not know the value of our products offer not you really need. We never doubted our ability to provide an initial value of the product. (Machine learning can not understand the human mind, at least for now can not!) Before the product has not been established, all assumptions about products, markets and competitors are full of variables. However, this can be implemented a program of sales to our existing products to potential customers. But we did not do. Lessons learned: In the incubator project where I learned a very useful approach. Your markets, products and competitors columns a complete list of key assumptions. Key assumptions refers to assumptions may have a significant impact on your company \u0026 mdash; \u0026 mdash; or success or failure. The possibility is not established in accordance with the assumption of the risk and size of the company's follow-up on key assumptions to sort the list. From the beginning the highest ranked at each premise as early as possible to confirm these hypotheses.
Error three: sunk cost bias influenced our decision we do not know the product transition problems but our hearts have "clover cosplay " concerns, hesitant. In the entrepreneurial process, it is hard to not have the slightest doubt and apprehension. But our concerns more than a little overdone. Our own products have deep feelings, but do not know how to ask where it is difficult to solve. Can we doubt their own products? This should dampen the morale of risking their concerns out loud? Or let your co-founder doubt whether you still keep the faith with them always of one mind? In the long run, appropriately express your concerns can make more transparent communication between the founders. If we had to do this, you can save time and money for several months. Lessons learned: the founders are, of course it is necessary to adhere to the company's development vision. However, the way to achieve this vision are numerous. Do not hang in a tree. You might want to strive to accept the fact that from the beginning. While forming a transparent communication of corporate culture in your company. Encourage co-founders who put forward different views, and then deal with it objectively. Error four: We tried to do everything to please everyone. We wanted to design a way to automatically control your lighting, fans, battery converters and intelligent heater switch. We also attempt to automatically control your TV, fridge, oven, and possibly also the car. We both want to conserve energy promising features luxurious. The result is very complex products and positioning. Lessons learned: start-up companies resources are often very limited. So we should not do a lot of things, but the general effect must be focused and brilliantly solve a specific problem. Error Five: We underestimated the difficulty of the hardware business. Entrepreneurial success is not easy. Successful entrepreneurs in the field of hardware is even harder. Pebble (a Smart Watch Silicon Valley start-up companies), despite all the success in the Kickstarter to raise it, but the company is still in trouble. Building a prototype is part of the process to set up a hardware start-up companies in the most simple and easy task. The real challenge lies in product design, production technology, manufacturing, distribution and marketing / sales, and have a number of partners in China. In addition, the hardware product validation and iterative cycle is much longer than the software products. Therefore relatively difficult to finance. Because of the inherent risk of hardware startups, VCs typically require a certain amount of traction funds (recently received the news about the Kickstarter / Indiegogo have to get $ 1 million of the public to raise funds.) Managing cash flow is also a difficult task, because you have to sell products give you dealer paid before profit. Considering these factors, we must admit that our team does not fit in the field of hardware business. Lessons learned: Before you begin cosplay costumes for sale the hardware company business, first you have to clearly understand the future state will face and make the appropriate plans. Looking for your team experienced members, or to join a professional hardware start-up companies such as incubators HAXLR8R. Situation Ultimately, we had to leave the field of hardware and networking, we are good at dealing with back problems. When we venture company established in Gandhinagar. There are few start-up companies. Therefore, interaction with other entrepreneurs and share their experiences for us is just wishful thinking. So we have to subscribe to a lot of blog just to keep abreast of cutting-edge business information. Taking into account this problem, we initiation of a new solution \u0026 mdash; \u0026 mdash; FundaMine, one of the professionals in his field of knowledge to interact with other people.