Author -Thomas Vles - Leading Dutch Startup Association | Serial Entrepreneur | Business Consultant | Startup Investor & Advisor
3 lessons that might have led to survival of my startup
A year and a half ago we decided to revolutionize the wedding industry and founded wedoido: the only platform in the world that allows couples to directly view locations and suppliers and book their wedding through one platform. We were off to an amazing start and many couples trusted us with the most beautiful day of their lives, but then.. the corona outbreak happened.
Today I have got some sad news to share. We have ceased operations at wedoido.com and together with the other shareholders we have decided to terminate the company.
Due to the coronavirus 100% of weddings booked via wedoido were either postponed or cancelled. For the upcoming season the situation remains unclear. Couples are not booking yet for next year, some haven't even made their decision on what their wedding is going to look like. Being a wedding planner, this means that we don’t know when bookings will be back to normal. As a company we simply can’t afford a year or more without revenue.
We have spent 1,5 years developing the platform, attracting couples and onboarding partners, but we weren’t big enough to survive the pandemic. I want to thank the core team Jorg, Wendy and Dominique as well as everyone who have worked on the project for all the hard work, the fun times and the inspiring ambition to change this industry. My gratitude also goes out to our three investors who showed their confidence and support in revolutionizing the wedding business.
Being an entrepreneur, I started reflecting on the situation. Is there anything I could have done to prevent this? What could we have done differently to survive the pandemic? I’d love to share 3 important business lessons that I’ve learned throughout this experience:
1. Tech development should not be budgeted from your revenue After raising funds we had our budget for the first year. As founders we decided not to take any management fees, so all resources could be spent on creating both product and traction. We budgeted roughly ⅓ in tech, ⅓ in marketing and ⅓ in wedding planning & support. For our product development this translated into a full time CTO with the support of 1-2 part-time employees.
For a startup with a strong technological component this budget was never enough to realistically create a truly distinctive product. Thanks to the efforts of our CTO we created the MVP regardless. A few months in we noticed that the product didn’t match the market needs and that the scalability was lower than expected. We needed to make a pivot and change the preliminary product.
As we missed our opportunity to make serious revenue in the first wedding season, resources were even lower and we had to create the product with almost no support. In the tech world money buys you time, so our development slowed down. We never were able to create our envisioned product and getting there took way longer than we initially planned.
I recommend founders to budget adequately for product development and presume that future revenue cannot cover these costs. This way you can ramp up development and will always be able to pivot to reach the perfect product-market fit.
2. Consider finding an industry partner to accelerate disruption wedoido was founded as a disruptor for the wedding industry. With a small, but significant market size worldwide and the absence of true tech innovation, we found a market space that was ready to be revolutionized. We wanted to bring transparency and innovation to an outdated sector, making the entire experience better for both couples and vendors.
It is impossible to change an entire sector all at once. Our model featured a double-sided marketplace which means we had to convince couples, wedding venues and other suppliers (flowers, cake, photographers) of our new business model. We were successful on both sides and showed traction, but in order to have a solid product we needed to onboard a wide spectrum of wedding vendors.
During our journey we always considered ourselves a challenger of the status quo. After the shower of Covid-19 cancellations came upon us we started talking to other companies in the market to sell our concept and technology, as we truly believed in our mission and we wanted to give it a second chance. We quickly found out that the status quo we were rebelling against, actually was very open to innovate and wasn’t that protective of their own outdated business models.
This opened my eyes: we wrongfully assumed their unwillingness to innovate. If we would’ve opened ourselves up to them at an earlier stage, we could have improved our vendor offering far beyond the critical minimum with a lot less effort. I would advise anyone disrupting their industry to get in touch with their peers in the industry and see if this can accelerate your development and therefore accelerate innovation.
3. Does your founding team fit the industry? According to a study done in 2019 by CBInsights about 25% of startups fail due to team related issues. If you haven’t read the article yet, it has many valuable insights and I would definitely recommend you read it.
A compatible team with complementary skill sets is critical to the success of a startup. Whilst from a tech and operational perspective we had a lot of experience in house with a CTO and CEO, we still missed some key areas. In our case these were related to user experience and industry specific knowledge. In hindsight, not very surprising for the first two guys ever starting a wedding company.
We had thought too lightly of entering the female dominated wedding space. Our first hires were women and they were more successful talking to customers and onboarding vendors. This is something we could have anticipated. Never forget how important your understanding of the target audience is.
Weddings are probably one of the most important events in peoples’ lives and many vendors have years of experience in guiding couples through this emotional journey. Although we did speak to a lot of market experts and wedding planners, having one in the founding team would have provided knowledge and a network. Something that now took too long to build up.
We cannot change the course of Covid-19, nor do we blame the end of wedoido on the virus. We simply expected better results and not being able to hit them right away affected the team’s confidence.
With a disappointed team, no resources and an uncertain outlook on the upcoming season, we had to make a decision. Although it is a shame of such a beautiful brand, a good tech concept and a market begging for disruption.
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