Backed into a corner by a tech startup?
from our Sunday reading series - a weekly blog post (subscribe here)
Having been personally involved with several tech start-ups over the last few years, I have some insight behind the statistic that 90% of them fail*. As the digital world continues to evolve, increasing numbers of professionals, ranging from one-person artist businesses to museum staff, are being approached by such companies to become early subscribers. The question is this: How do you know if joining is a good idea – or not?
About 15 months ago, I was introduced to the “Co-Founder of an Art/Tech Startup” who was building a Client Relationship Management (CRM) solution for the art world. In an initial call, he told me what the platform could already do and what features were being added in the coming weeks and months. He boasted that 17 new users had been “onboarded” in the past week alone and that his team anticipated being ready to charge $$ for subscriptions in another six weeks’ time. “That’s fast!” I observed.
With prior experience of advising a failed CRM startup under my belt, having been an art world adviser to a startup with the same idea, I took note of the intent to start charging for a platform that wasn’t yet market-ready and the tendency to throw around jargon like beta, MVP (minimal viable product) and more. (I’d already worked with a business owner who raved about the book The Lean Startup, yet didn’t really get it.)
During a second call, I asked about the team. A red flag was raised upon the discovery that the Co-Founder was performing multiple roles. Worse yet, he was adamant about not taking “feature requests” from users. And despite stating that they “spend a lot of time thinking before doing,” it all seemed rushed and only partially done.
Fast forward past another online meeting when I grilled the poor guy in a way he had probably never anticipated, and my team set to testing. We quickly realised that the solution was less developed than given to believe, resulting in the system being more of a Contact Management System (CMS) than a CRM. Our assessment was that it was still a far cry from reaching MVP, or in other words, being ready to take to market.
During a visit to Armory Week in New York in March 2016, I had the opportunity to meet the two Founders and a full-time assistant for a lunch meeting. This was when I unearthed the reality: the company was going for a round of investment and needed users to secure funding. They were determined to access my networks to increase user numbers with raising $$ in mind, not because the platform was ready to deliver. After going around and around, repeating myself who knows how many times while seated at the corner of the dining room, feeling increasingly blocked in, the team finally accepted that 1) I was not going to budge in giving them access to my network; and 2) I needed to see that they would implement a list of features prior to reconsidering point number one.
Before and since that time, I’ve observed many enthusiastic tech startup founders explain how their product is going to revolutionise the art world, become the industry’s officially certified solution and generally be amazing. While they mean well, the reality is that only 10% of these enterprises (if that) will succeed.
Where does this leave you? Think long and hard before investing time and money in a new tech solution. If you’re being chased or are having money / introducer’s fees thrown at you, be wary. Don’t take celebrity users as proof that a system works, either, for its folks like you whose experiences and reviews are important. Be bold and ask savvy questions like “What will happen with my data and your platform if your company fails?” And, should you decide to try out a platform, be open-minded to what happens in the end.
While being backed into a corner by a tech startup isn’t my idea of fun, it was a great revelation that shows the importance of critical thinking when it comes to digital age solutions, however revolutionary they can be.
* See Why startups fail, according to their founders, by Erin Griffith. Published in fortune.com, Sept 25, 2014.
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