Roger Ehrenberg is Managing Partner of IA Capital Partners, LLC talked about what we can learn from his failures. In his first entreprenurial adventure, he failed for several reasons.
First, the company lacked a Buck Stops here leader. It had a flat management by committee structure with two partners, both with a different vision for the company, which caused a lot of friction. There was no single vision. Having two leaders with different visions led to an inability to manage through a crisis, which typically requires quick, decisive action. The technology team rallied around the vision of the technology leader and the sales & marketing team rallied around the vision of the business leader. Factions developed around the two leaders. Source of conflict with the board.
Hubris in thinking that they could engineer the ultimate product led the company to be too internally focused. Instead of reaching out and engaging prospective customers early in the development process, they created an offering not geared to customer requirements. The team was not accustomed to interacting with and servicing customers. Customer-centric was not part of the company DNA. As a result, they fostered an isolated, insular, tech-focused culture. The company eventually ended up with an over-engineered, proprietary and costly architecture.
Product development was driven by the technology team, instead of by the people actually interacting with customers and bringing back business requirements.
Too much PR too early created unrealistic market expectations. This lead to unrealistic internal expectations and also facilitated raising too much money too early. Yes, it’s possible to raise too much money. Too much money allowed the company to continue the science project of creating the perfect, bloated product instead of getting something small and lightweight to market to get feedback and continue to make iterative improvements.
Too much venture funding allowed the company to defer the pursuit of revenues. Instead of putting a functional, albeit faulty version 1.0 of the product, and getting necessary customer feedback to then create a product the market actually wanted, the company had the luxury of delaying bringing the product to market. Too much funding also worked against creating a scrappy us against the world culture. The company wasn’t worried about generating revenues until it was too late.
So what are the attributes of failing successfully? Roger Ehrenberg sums it up with the following:
Humility – possessing the ability to acknowledge and learn from failure
Insight – having the perspective to extract the lessons learned from failure.
Persistence – embodying the toughness to take lessons learned and move forward.
As Segway inventor Dean Kamen once said about entrepreneurs, “It’s not that they’re brilliant or well-educated…They work all the time. They don’t let failure demoralize or destroy them. They pick themselves up and keep going and eventually, every once in a while, one of your ideas actually breaks through and works, and makes all that stuff seem worthwhile.”
The Software and Information Industry Association added a start-up focus to the annual Information Industry Summit. Previews is an opportunity for start-ups to get in front of investors.
Early-stage, innovative content companies and companies that enable content creation, distribution and commerce solutions were invited to present before an audience of industry leaders and corporate development executives, bankers, technologists and other influencers at SIIA Previews.
Each start-up company was given five minutes to present and five minutes to answer questions from the audience.
Watch company presentations from all invited start-ups.
