The Decline And Fall Of Flowtab, A Startup Story
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Kyle Hill and I are already back at it. Together, we launched www.homehero.org a marketplace for senior caregivers, let me know your feedback!
- Mike Townsend
For example, I would have loved to have seen a community-maintained version of Glitch [1] take over after the game died out, but Tiny Speck refused to open up the source code because they believed it would be too complicated for anyone but themselves to run—a justification which has never made sense to me.
And if nothing else, it gives a deep peek into how a production system is run, something I'm always grateful for.
How are you going about (or are you going to go about) doing that?
Also noting on the page that there is a lack of information that can be had (it's one page) w/o supplying information and signing up.
Flowtab provided a service that wasn't needed, this doesn't either.
From http://alpha.flowtab.com/:
We also set a major company milestone to reach 50 "Flowtab regulars" (defined by 2 or more orders in a trailing 30 day period) by March 1st 2013.
Sadly, one of the lessons listed on http://alpha.flowtab.com/ is "Do things that don't scale."
Its like a convenient way to remove your obligation of actually encouraging people to do something because "they'll do it on their own"
Many things that seem inevitable are only so in retrospect. At the time, they were probably seen as unlikely or simply possible.
Only two of our bars in Denver actually paid for the product ($1,500 for license + hardware upfront, plus $99/month), which wasn't enough to justify the $3.5 million valuation we raised on. What got our investors excited is tapping into the $3 billion of advertising dollars spent by the liquor companies every year. In 2012 less than 3% of this was actually dedicated to mobile, these were the deals we wanted to go after. So it became more about user growth and number of orders than revenue.
I still think there is an opportunity there -- giving liquor companies a better way of marketing their products on-premise through mobile. But I doubt it will be a mobile ordering app that cracks the nut.
Kyle H.
This seems like a good example of how investors can be a detriment. Your original concept was designed to solve a problem you thought existed with the drink ordering process. The marketing "pivot" is completely unrelated to that and assumes a completely different problem for a completely different customer.
Personally, I don't think there's much to the marketing concept. When at a bar, most people are going to order what they like, and they're going to be engaged in a social experience. Both of these things work against a mobile app that is trying to serve as a channel for delivering in-bar advertising for liquor companies.
Serious question - was it ever going to? It always seemed like a backend-heavy way to optimize for a trivial inconvenience. I have to say, It seems to me this was a failure because it was just plain a bad idea. That makes for a pretty short story, though, I guess.
Mike T
What's the poor ordering experience? Trying to get the bartender's attention? I would submit that a poor order experience is a consequence of the establishment, not the fundamentals of the ordering process. Personally, I like the bar experience, it's personal, it's immediate, you can get recommendations, and it's fairly equitable for everyone around (shovers will be ignored by a good bartender, though a good bartender is by no means guaranteed). On the other hand, a remote ordering situation turns every bar into a drink machine activated by an impersonal, drive-thru-like interface. If you prefer that to the existing system, perhaps you should patronize a better bar!
I agree that there is probably some interesting way to leverage personal technology in this space, but it's not this. This app does not improve the "ordering experience," it eliminates it. That's a bad idea.
Sure we were saving people time, and making the drink ordering experience more efficient (no cash, cards, open tabs and an easily-accessable drink menu), but what we learned is that people in bars are there primarily so socialize, and they don't always need maximum efficiency like you do when you need a ride home (enter Lyft, Uber) or want lunch delivered (Seamless, GrubHub). People in bars like the social friction, and we were offering them a solution that took the social aspect out of the drink ordering process. Hindsight 20/20.
Hopefully other entrepreneurs read our story before dedicating valuable years of their life to a similar product in the space.
Kyle H.
They're very common within the game development world, after becoming a regular, beloved feature of Game Developer Magazine (now defunct). Here's a big list of them, perfect for a Saturday afternoon:
http://www.pixelprospector.com/the-big-list-of-postmortems/
Is there any collection of these kinds of articles for contemporary startups, or similar postmortems that are also worth reading?
This seems to be more on the vitamin end of the spectrum. It doesn't solve a pressing issue I have when I walk into a bar. On a related note, this idea also seems to suffer from almost a marketplace-style issue: both the seller and purchaser need to use the app, which just makes things even harder.
If you do decide to tackle a marketplace idea again in the future, I recommend adopting a multiple phase approach where the first part doesn't require buyers and sellers. Build a product that will benefit one side or the other (I recommend the sellers), and then pivot into a marketplace strategy once you have sufficient traction.
Edit: in reading over the article in more detail, I have one thought. I personally would've tried positioning the software as an easier means to order room service in hotels. Ordering room service sucks, and I'd much rather use the equivalent of Eat24 or GrubHub than picking up the phone.
Depends. I've seen and heard multiple stories of cab drivers or business owners failing to process using Square. For them, it certainly was more of an annoyance than a painkiller. In most these cases, I ended up paying cash.
Also, here's a truth about painkillers that few talk about: painkillers are quickly commoditized. This is why you'll find vitamins to cost more than tylenol even though it's the Tylenol that helps you when you have 102 fever.
Incidentally, worldwide vitamin sales are expected to reach $3.3bn in 2015[1] while pain management drugs (ranging from OTC drugs to opiates) are expected to hit $60bn the same year[2]. So, painkillers revenue is ~20x vitamins.
[1] http://www.prweb.com/releases/vitamins/food_supplements/prwe...
I worked for a company called DoTheGood way back in 2001 that had a similar issue, although our problem was even worse since we really needed 3 parties to adopt us (businesses, nonprofits, and users).
I think these sorts of ventures are just incredibly difficult to make work without a massive amount of money to throw into advertising and sales. There's a huge chicken and egg problem where, in the FlowTab case, users want bars to adopt it and bars want users. You can't just hope that your technology is nice enough because no matter how nice it is, without enough bars and users the tech is worthless.
If you have millions (or tens of millions) to push into advertising (to acquire users) and sales (to acquire businesses) then maybe it could work, but it just makes things that much harder.
Of course, we can identify some startups that did make it despite the chicken and egg problem, like AirBNB and eBay, to name a few.
Flowtab could not be distributed through partnership with companies that sell Point of Sale (POS) systems.
Anyone have insights into why this is?
Mike Townsend
Integration with a POS would make that a better experience than everybody trying to get the bartenders attention to close out the tab.
Mike
I like to think of startup guys as scientists... even if we didn't find the cure for cancer, there's still value in discovering the 100 antidotes that DIDN'T work.
FYI the alpha site is the same as our main site, www.flowtab.com.
Kyle H.
Well actually there have been quite a few of these lately.
I am sure this was a fantastic learning experience for the founders.
Best of luck next time!