Empirical data on startups indicate that a large percentage (between 70 to 90% ) of startups are doomed to fail. Some founders realize that they are captaining a sinking ship and bail out early and gracefully, others decide to do a Titanic by failing dramatically. Many others, however continue on a slow burn.
Knowing when to declare “failure” is an art more than a precise science especially since we love stories of businesses raising out of ashes of failures. Here we feature an announcement by founder of Tradingrex.com deciding to shut-down the operations.
An announcement by Fernando & Eduardo, co-founders also appears on their website
A few days ago we decided to shut down our two years start up Tradingrex.com, a web app to analyze your trading history from Forex brokers. We weren’t able to find a business model and we didn’t get the metrics needed to get any funding so finally we had to shut it down.
I think we did all and every mistake you can find in the startup books, but at the same time followed every step in the same books.
We had our business plan, we had commitment, we started slow looking for our “market fit” and doing things that don’t scale, we pivoted, we looked for mentors and were in an accelerator program, among a long list of things advised by business literature and accelerators.
However, when you go to the market, the user is the last judge, the one that tells you if you did it well or not. And we failed.
If I could change something probably I would have tried to do just one thing, a very good one, but we were two IT guys and we wanted to have a lot of features because it was what would make the product remarkable, and I think it was, but people didn’t find enough value to pay for it.
Then we wanted to go from B2C to B2B, looking for companies that would integrate our product, but all of them wanted to pay in commissions even if we had to pay for hosting and integration costs, so again we didn’t offer enough value for them.
In any case it was an interesting journey, we learnt many things and we did a nice product, but as has been said a lot of times, you need something more than a good product to have success.
Note from our Editor:
Thanks for sharing your experiences and learning. Sorry that you couldn’t make it work. You are among the few entrepreneurs willing to walk away from their “baby” when you realize it isn’t going to work out. (Kudos for this !)
A couple of things you could do:
- a) Continue to operate the portal with lesser SLA and handholding
Fernando responds: “I tried a few different setups to lower the AWS bill, but the application does a lot of number crunching and statistical analysis, so there is a few intensive tasks that needs some minimal resources to provide a good user experience.
The thing is that probably some process could be optimized but since we wanted to go fast to the market and find our market-fit as soon as possible, we didn’t want to optimize the app too early (you know early optimization is the root….) so we decided to spend a few more dollars in hosting and not worry about optimization.”
- b) Sell it: if there is any IP or custom code you developed, you could consider selling it with the URL
Fernando responds: “About your suggestions, I’m doing “B”, if anyone is interested in the source code it’s available for sale.”
Check out an earlier feature on a failed startup, Cyanogen