Lessons from a start-up folding...
For obvious reasons we hear less about a start-up when it ceases trading, but the demise of Doocuments ( a start-up that provided secure ways of sharing documents on the cloud) has left us with some essential and valuable feedback.
The statement that Carlos Polo, the ceo, recently put out on his official blog was as follows
"Since launching in Summer 2010 your feedback has been outstanding; from ideas to improve the product to stories about how much of a difference Doocuments has made to your lives. We know from our stats that many of you are still active and have achieved really impressive improvements. We’ve had our ups and downs – including some serious setbacks – but you’ve always kept us motivated and we’re grateful for that.
However, Doocuments has not been the commercial success we wanted and it’s costing us too much to keep running. We’d love to pass it over to someone else, but unfortunately that is not possible so the only option is to close down."
It's always invaluable for other entrepreneurs to learn from others' mistakes (rather than having to make them oneself), and so when Carlos and others explained in the following articles why the venture had folded, I had to sit up and take notice. Carlos has earnt a lot of respect by his honesty and transparency in this matter..and it surely can't be long before he's involved again in an internet start-up, given the experience he has built along the way.
In this interview for El Confidencial Carlos points out valuable lessons learnt - He's found that life is too short to continue with ideas that the market rejects and that one's own predictions are bad markers - it is the market that decides a company's fate.
But he also makes the point - the best entrepreneurs do not measure themselves (solely) by the failures, but (also) by the times they get up again and succeed.
Doocuments was launched in 2010 and during the next 3 years developed a cloud hosting system that allowed companies and entrepreneurs to control the documents they shared on the web. But in the end it was not enough to make the enterprise economically viable.
Furthermore, in this interview for todostartups.com the financial analyst Antonio Manzanera praises Carlos, particularly his brave honesty in relating the reasons for the company demise, and emphasises the following:
i) It's the banknotes and coins coming to the company that provide a future - any other metric is just vanity publishing
ii) It's essential to put in place a financial stop line - beyond which you refuse to throw good money after bad
iii) When the most significant error is the overvaluation of the problem that the technology is designed to solve, you need a lot of money to pivot and change direction to a more profitable route.
Carlos - thank you very much for having the bravery to pass on your lessons learnt. It can't have been easy at such a difficult time, but I'm sure that you will be able to utilise other opportunties in the future to take advantage of the experiences you've gathered during this process.
An older interview with Carlos Polo explaining Doocuments