Why Our Startup Went Bust. Part IV is Friction.

Re-educating the market
Re-educating the market

Let us define “friction” in this instance.  Friction means you’ve got an education problem.  Education problem means you’ve got one or multiple groups who need to be trained / learned / reprogrammed in some way to make your business grow at a fast enough pace to survive.  Friction in the sales process means trouble. Two groups that need education doesn’t double your friction, it squares it.

With our startup, our product required both the sellers to sell in a new way, and the buyers to buy in a new way.  The way they had been buying hadn’t changed in 70 years.

Old way: Someone asks you to buy wrapping paper, cheese, cookie dough, baked goods to support their cause.  You can see it.  You can touch it.  You can flip through the glossy catalog. You give cash.  You get goodies.

Our way: Someone asks you to buy a mobile coupon book.  You ask to see it. Seller probably doesn’t have a smart phone and can’t show it.  Seller shows a flyer instead.  Seller has a smartphone and tries to show a demo.  Maybe it works.  Seller shows a flyer instead. Buyer gives cash.  Buyer gets activation code, not the actual product.  Buyer goes to computer or phone to enter code to activate account.  Buyer has to learn to navigate the site. Buyer must redeem virtual coupons.

Seems pretty obvious that this was going to be a tougher sale after writing it out, doesn’t it?

What conclusions can we draw?

  1. Frictiony sales = reduced sales or no sales = less cash = sad founders/investors.
  2. Educating a market takes a long time.

If your awesomesauce new product that’s gonna disrupt the [choose your niche here] industry requires re-training sellers, buyers, or any other group critical to the success of your startup,  you are in for a long, long, long road. Plan on at least three years minimum to teach the market.  

That’s probably generous.

And sometimes your startup just goes bust because the forces of nature are working against you.  That’s Part V, coming up.

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