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Devver , maker of developer coding tools and TechStars 2008 graduate, announced last Monday that it would be shutting down after being active for nearly two years. News of a startup closing up shop is never a fun thing to hear about, but fortunately many lessons can be gleaned from the experiences of the entrepreneurs. Today, co-founder Ben Brinckerhoff provided just such lessons with an insightful blog on the Devver journey and why he and co-founder Dan Mayer are choosing to move on. Sponsor An unfortunate truth about startup culture is that a lot of the most valuable lessons are learned when entrepreneurs fail to heed them. Some notice their mistakes early on and can pivot their products and business toward a more successful future, but sometimes they don't realize their mistakes until its too late and there is nothing that can be done. This was the case with Brinckerhoff, Mayer and their startup, Devver, which they say failed to focus enough on one of the most important parts of building a startup: customer development. As Brinckerhoff points out in Monday's blog post, the company assumed they had found their minimum viable product (MVP), and as a result focused more on product development than listening to customers' needs. "You can teach a hacker business, but you can't make him or her get excited about it, which means it may not get the time or attention it deserves." - Ben Brinckerhoff "Our mistake at that point was to go 'heads down' and focus on building the accelerator while minimizing our contact with users and customers (after all, we knew how great it was and time spent talking to customers was time we could be hacking!)," writes Brinckerhoff. "We should have [been] asking, 'Is there an even simpler version of this product that we can deliver sooner to learn more about pricing, market size, and technical challenges?'." Both Brinckerhoff and his co-founder are "technical founders," which means their specialities are on the development side, not the business side. The only other person the pair hired to help out, a fellow software developer, also fits into the technical side of the startup. Brinckerhoff says this may have been one of the hurdles that led to the downfall of the company. "Looking back, it would have been to our advantage to have a third founder who really loved the business aspect of running a startup," writes Brinckerhoff. "Having solely technical founders is non-optimal. You can teach a hacker business, but you can't make him or her get excited about it, which means it may not get the time or attention it deserves." Brinckerhoff also adds that having a split team located in different states contributed to the company's struggles, but it seems to me it was more of a hassle than a reason for failure. Split teams are actually growing in popularity and probability for success, as we discussed earlier in the year with companies like Blank Label and chocri . Devver undoubtedly had issues with its split setup, but its likely that it didn't contribute toward its closing as significantly as the other errors. Regardless of this issue, its clear that the Devver team learned and shared some valuable lessons about the importance of customer development. As Steve Blank noted during his presentation at last week's Startup Lessons Learned conference, startups shouldn't be too eager to product management before customer development. Devver may have jumped the gun a bit in terms of over developing their product, so learn from their mistake and remember to develop your customers before throwing the kitchen sink at them. Discuss
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Learning From Failure: One Startup's Story of What Went Wrong
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Last night, we asked folks if they'd rather have cash or services (like marketing, development and HR services) to help their early stage startup grow. While our readers' responses were pretty evenly split, the split between startups that seek capital first far outweigh those that seek to make equity-for-services deals. Also, the number of VC firms (well in excess of 700 in the U.S. alone) is far greater than firms offering services or a mix of cash and services. Are we just too used to capital? Are "venture services" firms still too new? Why don't we have more services-for-equity programs? Sponsor The readers we polled last night were about evenly divided when asked if they'd take services (54%) over cash (46%). However, our commenters last night were overwhelmingly in support of taking services over cash alone. "You need money to buy services, and most of the time, since you do not know where exactly to shop, you overpay or pay for something you do not need," wrote commenter Marfi. Commener Jorge made a good case for mentor-driven accelerators when he said, "Just getting the cash won't get me some good mentors The main reason why startups need cash is because the model is either not clear or not set to work in the short term Just cash ins't enough unless you're an experienced entrepreneur." Power commenter Warren Bendetto spoke to the sometimes arbitrary nature of valuation , saying, "When you're starting out, you really have no idea what you'll need. You base your anticipated amount of capital you need to raise based on assumptions and guesstimates that are 99% bullshit. If you're lucky, you'll raise too much money So you buy servers you don't need, you hire too many people, everyone gets 36" double LCD monitors, and your kitchen has a vending machine that spits out free MacBooks. That's all fun, until you realize that you gave away 80% of your company in exchange for the funding. By the time you realize that you could have raised less and kept more equity, it's too late." Salient points, all. So, what is it about the magic and allure of VC that keeps startups pitching for more funding when they might be better served to take services instead? Chris Wanstrath, founder of the bootstrapped and profitable GitHub , was in the to-VC-or-not-to-VC panel I moderated at SXSW yesterday. When I asked him if he'd ever considered taking capital to get his business up and running, he said that he absolutely hadn't. He had instead chosed to make business deals, strategic partnerships that would allow him to get the goods and services he needed without being financially dependent on others or having to give up equity. In that panel, I asked audience members in the packed room how many were currently considering seeking or were actively trying to secure capital for their startups. Between 80 and 90 percent of folks indicated that they'd be making the rounds on Sand Hill Road. I wish I'd had the chance to ask them if VC was still their preferred option after the panel was over. It seems now that there are more options and alternatives for smart, lean startups to get further with less reliance on the complicated and sometimes predatory business of venture capital. As for why there aren't more venture services firms in existence, some have said it's because getting the capital to run a VC firm is a heck of a lot easier than building the infrastructure to offer startups mentorship, office space, and other business-building services. Do you think there's enough justification - both in terms of demand from startups and in terms of return on investment for firms - to warrant more of this new breed of startup support? We'd appreciate your thoughts in the comments, particularly if you're involved in the VC/startup ecosystem. Discuss
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Why Aren't There More Venture Services Firms? POLL RESULTS
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In part 1 of our interview with Adam Greenfield , author of Everyware: The Dawning Age of Ubiquitous Computing , we discussed the impact of the iPhone and other smartphones on the Internet of Things . In Part 2, we explore how the Apple iPad may also become a key device. Adam Greenfield thinks it may become the missing link between Internet-connected items in your home, for example the Internet fridge, and the Web. Sponsor In yesterday's post, we talked about how Asian cities are ahead of the curve in deployment of Internet of Things technologies. One reason is that quality of life can be more easily be delivered as a service in a country like Korea, because its citizens are more open to futuristic appliances like the Internet fridge . The counter-argument is that the Western market has never taken to the Internet fridge because of the poor utility of such appliances. The answer may be a device that acts as an effective intermediary between the fridge and the Internet. The iPad could be that device. Adam Greenfield explained to me that the iPad may become the kind of device that people carry around with them everywhere inside the house, from the lounge to the bedroom to the kitchen. That got me to thinking. Imagine this use case: you're feeling peckish, so you wander into the kitchen for a snack. Your trusty iPad is tucked under your arm, as usual, and you place it on the kitchen bench while you open the fridge. You guiltily pick up a chocolate bar and you're about to close the fridge door when your iPad beeps. You glance at the iPad, where a diet management iPad app has automagically opened and is flashing the message: "Hey buddy, you've already had too many calories today - put that back!" Blushing, you return the chocolate bar into the fridge and pick up a punnet of strawberries instead. You glance back at your iPad, which now displays a large green check mark on its screen! There are many other scenarios I could describe, but the point is the iPad may well become a linking device between Internet-connected appliances and objects in your house, and the Web. Adam Greenfield explained that the mistake we've made with Internet fridges in the past was to think of them like a dumb sensor. He remarked that it's not the instrumentation that is important in an Internet fridge - it's the network. The data will probably be collected by the fridge, in time via RFID-enabled food packaging. But the fridge itself is a clumsy interface to that data. Early examples of Internet fridges have tried to be an interface for the consumer. Although some have had tablet-like devices that could be disconnected from the fridge and used on the kitchen bench, users have not found even those very compelling. There are a variety of reasons, including limited utility of fridge-tablets, poor user experience, and the sheer awkwardness of attaching a tablet to and from a fridge. The iPad, however, will be used anywhere and everywhere by its users - inside and outside the house. So it's a natural device to use to connect (virtually, not physically) to your fridge - along with other appliances and objects. This isn't restricted to inside the house either. We've written before about cars as a service . This is where you, the consumer, can effectively subscribe to a car or a car provider. This is already happening with the American service Zipcars . Greenfield noted that cars will become a "network resource" - addressable, scriptable, queryable, and so on. And once again, the iPad may be the device which connects you to cars and all of the data that is pumped out by cars and connected web services. In the not too distant future, household appliances and other real-world objects such as cars will be connected to the Internet. The iPad may well become the connector to all of those things. Discuss
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Why The iPad May Save The Internet Fridge
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