Lessons From a Failed Startup — From and For First Time Founders

Is it a case that some VC's are willing to take the extra risk to fund companies that are still in the stage of finding proper product market fit? With the associated possibility that this might never actually happen?

No one here would be surprised if Bob, a literature professor, who played tetris five times in his life would fail at building a video game startup. This is Bob, a literature professor, who gets his clothes at Macy's on sale ( still at ~400% markup ) building a fashion startup and failing.

That is why they failed. The founders are all men. The biggest consumers of apparel are women. Those that run successful boutiques are women and they largely service... women. Those that decide to do their own knock offs of the on trend are owners of the successful boutiques. Surprise surprise they are also women. What do they all have in common? They know that the market is in the throw away clothes that are supposed to last just one season ( trends move ), be cheap ( trends move ), and look kind of like what has been walking down the runway during the Milan FW, Hong Kong FW, New York FW and London FW. Turn around on this stuff in design is about 1 week, manufacturing is another 1 week and mass production is in 3-4 weeks. Designers of the knockoffs ( ok, call them inspirations ) can be talked with in NYC fashion district and in NYC Chinatown (I'm sure it can also be done in LA and during MAGIC in Las Vegas but they are in NYC weekly). Those that want to tweak designs can request it right there and in 3 weeks time i.e. a month after Willow Hand walked down the catwalk in Pineapple pants and well before D&G supplies their stores all those boutiques would have $40-$100 pants inspired by that.

I bet they did not hear what their potential customers were telling them.

And that's not even talking about the likes of Zara and H&M.

There was no market for this kind of a company.

But just to provide a contrarian perspective on #4, one of my previous jobs was at a company that did both, where we have dev department that built the software, and a growing and profitable consulting arm that helped customers customize and use our system.

A better example is Microsoft, many of its enterprise solutions, like..cough..SharePoint, is supported by an army of consultants hand-holding their customers on non-trivial use cases.

The larger clients tend to be less willing to adapt their internal processes to a new solution, and in many cases it'll require special customization or hand-holding/training to make a sale. On the plus side, they also tend to be able to afford those kind of things, you just have to charge them at a profitable price point.

Even if you don't make the mistake of bringing in a VP of Sales too early, it's easy for founders to get lost during this stage of the company.

When founders struggle to get those first paying customers, I wonder how many conclude that they haven't yet found product/market fit when really, they're just terrible at doing sales. It's especially difficult for technical founders (who tend to be bad/new at doing sales), and particularly challenging when selling B2B software.

And that basically makes this company less of an apparel or even a tech comapny and more like a dedicated supply chain service company for the apparel industry. Which requires solid SCM skills and the corresponding solid organisation and network. And maybe it's just me, but I have the impression that they focused almost exclusively on the tech-part. It's nice offer a service to manage "logistics" through an app. But what happens in the background of said logistics? That customer seemed to complain about long lead-times whatever happened wasn't that great. Considering vertical integration, the micro-factory in China, is not a solution if you don't have the experience running apparel manufacturing, in China of all places. And if you do have that experience you don't need an own factory, just use local partners like everybody else. Or don't in order to avoid all the ethics issues that come with it. Thing is, lead-times are reduced by cutting waste out of the process, and I didn't read anything regarding how they wanted to use technology, which is great in doing just that when used right, in order to achieve that.

It's not about having the time to think up and try a bunch of different ideas, but executing a list of prepared hypotheses. This would pitch way better to VCs, too.

VCs should be more vigorous about grilling founders on their hypotheses, imo. The experiment logs also make for content-marketing and investor documentation.

LA Koreatown has an entire and modern apparel industry.

They could have validated anything they wanted from SoCal.

> At the beginning, startups are simply a belief that a problem out in the world needs solving and that someone is willing to pay for the solution. This can be based on intuition or experiences, but they’re still assumptions and hypotheses that must be verified.

You don't need 7 different steps to find excuses to pat yourself on the back. Either someone pays you, or they don't.