Have You Ever Wondered How and Why a Startup With Lots of Funding Failed?

Here is the story of Everpix

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Current Everpix site – After Demise

Everpix made some fundamental mistakes despite being very intelligent and experienced entrepreneurs.  I came across an article about their rise and fall noted that the biggest mistake they made was by focusing on growth too late.  I believe their mistakes were much greater than just that flaw, but fits as a glaring example of their oversights.

At its core, a startup is a human organization experimenting to find a scalable business model in order to develop a sustainable, high growth company.  That definition demonstrates some fundamental necessities that startups must consider in order to succeed.  Of course, this involves growth which Everpix admits was something they did not consider.  They did not consider how they would get large, become sustainable and scale to reach many users.  The Everpix team focused more on developing the product to its full-fledged form rather than how to get more customers or feedback to meet customer needs.  This feels more like a passion project that was hastily brought to market rather than a major business enterprise that meets customer needs.

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You need to balance it out and get away from the computer and face-to-face with customers (via bellapetite.com)

This error of not understanding customer needs leads nicely into the Everpix teams even more fatal mistake.  The founders seemed to have thought they were just like all of their customers rather than finding out exactly what customers want and are like.  I have to admit this is an extrapolation because there isn’t sufficient evidence to make this claim definitively, but there are hints that implied their customer neglect.  A business provides a product or service to a customer which usually provides funds or time in exchange for use.  The central interaction in a business is between the company and its customers.  That is why it is essential to listen to, understand, and build according to the needs of customers or else they won’t pay for it.

Steve Blank’s theory and practice of customer development from his book The 4 Steps to Epiphany explains in detail the benefits of and how to gather insight on your customer and experiment until you build what they need and want.  I use an even simpler ebook that sums this process up much quicker called Beginning Customer Development by Kevin DeWalt.  According to this process the founders must humble themselves and understand that their solution is only a hypothesis, an assumption, and not a true solution.  You can rarely (Steve Jobs) know what a large market of customers want and need, and even if you do, testing it out to be sure before money and time are wasted unnecessarily is needed.

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via quickmeme.com

I can assume that the Everpix founders were not so oblivious to these mistakes.  They did bring up some growth strategies early and hired a marketing specialist later, but it was too little too late.  The team also may have done some customer development because they did build something that a small group did love and need.  The problem was that they believed the hazards they were experiencing were issues that most consumers had.  They thought the whole world was just like them and had the same problems or did things like them.  The market that they actually scaled for was probably just too specific.  I believe they were very smart individuals, but what happens a lot with smart individuals is that they get swept up in the brilliance and novelty of their idea/technology, especially in the supportive ecosystem that silicon valley provides.

About the Author

Maxime

Maxime Paul – Entrepreneur, autodidact, and creative problem-solver designing and implementing solutions for the marginalized’s problems today…[more].

MP, Brand Partnerships – Washington, DC
–Connect: Website / Twitter / LinkedIn / E2.is 

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