Start-up dreams: What happens to companies that don’t make it?
Start-up dreams: What happens to companies that don’t make it?
Founders of Shake, FoneSense and Brim Brothers share their regrets and mistakes
Shake’s co-founder Kevin Holler: “We went straight for the US . . . aiming to ‘go big or go home’.”
What happens to start-ups that don’t quite make it?
We’re all familiar with the various competitions and academies to help advise start-ups in their early stages but much can also be learned from where others went wrong.
Galway-based ExerWise was co-founded by Laura Hanlon, Ciarán Walsh and Nicola O’Sullivan while they were studying together in National University of Ireland (NUI) Galway.
The trio decided to give the children’s activity tracker business a go once they’d graduated, hoping that the device – which uses a traffic light colouring system to monitor activity – would come to fruition by the end of their first year.
But, having started in September 2015, the company called it a day last August.
“We set our goals out from week one. We had a year down and we had to meet certain criteria for us to continue and to make sure that the business was going to grow at the rate we needed it to,” says O’Sullivan.
“We weren’t reaching those goals and we couldn’t see ourselves reaching them in the next three to five months. That’s ultimately why we stepped away in the end,” she adds.
Spending much of their time on business development – and not on building the actual device earlier – is one of the issues O’Sullivan feels worked against their success, prompting her to give this piece of advice: “Make sure you are solving the problem that needs to be solved.”
‘Fail fast’ theory
“It’s only when you actually do fail that you understand the importance of the ‘fail fast’ theory that people talk about,” she says. “You learn so much from the failure. It does put a lot in perspective.”
All three are working in other start-ups now.
Hanlon and Walsh are with Colmac Robotics, which introduces robotics to children through workshops, while O’Sullivan has joined Night Vision which is developing technology to keep camera lenses on vehicles and machinery, in the mining and construction industry, clear – by way of a self-replacing filter.
Their story is not unique.
A number of other failed start-ups attended a “start-up wake” recently – toasting farewell to their former ambitions and imparting knowledge to other budding entrepreneurs in attendance looking to learn about the issues they should avoid from those who have gone before them.
Shake.io was created to help college students and graduates connect with companies seeking their talents.
FoneSense was a mobile advertising platform where brands would reward users who use their advertising jingle as a ring tone.
Brim Brothers developed the first wearable power meter for competitive cyclists.
Talking about these things in public can’t be easy, especially for Brim Brothers which folded only shortly before the event.
‘Tangled up in a mess’
CEO and founder of Brim Brothers Barry Redmond explains how they simply ran out of funds.
The device works but – due to technical issues that kept arising during the process – the company ran out of funds before the product was brought to market.
Shake’s co-founder Kevin Holler says they were in a similar situation and can pinpoint exactly where things went wrong.
“We went straight for the US, trying to avoid Irish investors, and aiming to ‘go big or go home’. But we didn’t raise enough to make that vision possible.
“The quarter of a million [dollars] we’d raised would have been great capital to build the first real phase of our business in Ireland but we got tangled up in the whole mess of working with so many lawyers and accountants setting up over there that, by the time we had completed that phase of the transition, we didn’t have the capital ready to execute on it.”
It’s six months since Holler closed Shake.io but the whole process is long and drawn out so he is still going through the motions.
It’s given him plenty of time for reflection and, now that the pain of the process has waned, he can offer advice to anyone that was in a similar position to him.
“Blind ambition can be dangerous,” he says.
“It’s something that I’ve only thought about recently. There’s this mantra in the start-up world that you always need to keep believing even when everyone is telling you you’re wrong.
“That’s true, you do need that a lot of the time because it takes a while to break through that barrier.
“But, after a while, someone needs to start asking the serious questions. Are we doing this the correct way? Is this feasible? If you’re blindly just leading the charge and your team is following you, you can really get yourself in some tough situations.”
‘Never got a deal’
Christian Ryder’s company FoneSense made no revenue. While the product had willing users, he was unable to pin down any paying customers, he says,
“The major failure was that we never got revenue, we never got a deal over the line. We came close but we just couldn’t do it.
“We tried everything possible, we had no problem getting users of the two-sided model, we couldn’t get the paying customers. We were in the wrong market in Ireland. This product wasn’t really suited, it was designed for the emerging markets.”
Originating the idea in 2006, it was 2012 before Ryder went full-time with the business, which shuttered in 2014.
It’s taken two years to close the company and now it’s in the final liquidation process.
Aside from the paperwork and financial side of letting it all go, there is the emotional burden of coming to terms with it, too, as Ryder explains,
“It’s tough, it’s something that you don’t really speak about. It’s probably the first time I’ve actually spoken about it. It’s something that people know – your friends know it happened but no one actually mentions it, it’s a kind of elephant in the room.
“I’ve never failed in my life, I know I failed but I learnt an awful lot from it but what I feel bad about is that I’ve let people down because they trusted me.
“People don’t think I let them down but my gut is saying ‘I wish I had succeeded for those people who backed me’.”
Talking to all these entrepreneurs, in an era when so much attention is on the spectacular success of some start-ups, the pervasive feeling is of being alone in your failure.
Going to a “start-up wake”, if nothing else, reassures that this is anything but the case.
And for the hardy souls picking over the ashes of their dreams, all is not lost.
Holler is now head of product for Change X, a non-profit which provides a platform for non-profit communities and Ryder has taken a leap into entrepreneurship again with OpenBack – a piece of code which provides apps the best user experience in relation to delivering notifications.
As for Redmond, the process of drawing things to a close is just beginning but something tells me that we haven’t heard the last of the cycling enthusiast.
Previously published in The Irish Times.
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