At a mid-week event hosted by The Bakery accelerator, ex-founders took the mic and explained why their old businesses didn’t work out.
The event was co-hosted by Autopsy, which has tracked why over 300 tech startups failed. It’s identified five common pitfalls: poor product-market fit; running out of cash; not the right team; premature scaling; and poor business model.
Some top bits of advice from the evening:
Find the right audience. Target too many customers and a product may not do much for any of them; equally, not understanding a niche audience can lead to disaster. Sam Salih’s utility bills-splitting company, Dividabill, focused on the student market – only to realise that group is, on average, far more likely to default on bill payments.
Don’t discount. It can be tempting to give away product for free to acquire customers in the early days, but this can make it hard to get them and others to pay for what a service is really worth later on.
Articulate ambitions. ‘Your investors will make or break you,’ said Salih; be crystal clear early on about where the company is headed, and make sure that investors share that vision.
Decide how best to grow. Plenty of profit-making businesses risk it all by devoting time and energy to raising investment and chasing lightning growth. Founders need to figure out the right kind of growth for their business.
After a gruelling four years hunting for a permanent space, street-food trader Mother Clucker has announced it’s finally opening a permanent restaurant in Exmouth Market, soft launching from 15 May.
The modest 20-cover site was formerly a fish-and-chip shop, meaning the deep fat fryers can be repurposed for Mother Clucker’s fried chicken menu.
Finding a suitable unit to open a restaurant can be a frustrating task. Mother Clucker founder Brittney Bean’s advice to other wannabe restaurateurs is to take into account unexpected costs like business rates, refurbishment spend and ‘premiums’ – payments made to the current tenant for taking over its lease. She says to take over a lease in London fees can reach upwards of £350,000.
Bean had previously taken on a lease for a large unit that later fell through. ‘We bit off more than we could chew,’ she says. ‘We didn’t understand the cost of turning that space into something we could use – it was a £20,000 lesson.’
Another court dispute emerged this week, this time over who owns ‘Crispr’ gene-editing technology.
The tech, which allows geneticists to snip out and replace microscopic sections of DNA, has the potential to transform the biotech industry. It’s around 1,000 times cheaper to edit a gene this way, and could unlock the path to curing conditions such as HIV or sickle cell anaemia.
Now, two US organisations – The University of California and the Massachusetts-based Broad Institute – are fighting over the right to profit from the technology. Both claim to be the inventors.
How much money can be made from holding the patent isn’t yet clear. As a benchmark, when Columbia University patented its own gene-splicing tech, it collected over £440m before the patent expired.
Earlier this month, Mammoth Biosciences launched with a diagnostics platform based around Crispr technology.
Driverless cars will soon be roaming the streets of Oxford – and communicating with each other as they do so – as part of a trial led by autonomous vehicle company Oxbotica.
The experiment will find out what data the vehicles collect while driving around, and see how it could be shared with insurers in the future. It’s hoped that greater buy-in from insurance companies will lead to self-driving cars being tested more widely on public roads.
Oxbotica, founded in 2014, produces software for autonomous vehicles which can be installed in cars, trucks and delivery robots.
Pet-care giant Purina (owned by Nestle) took a majority stake in personalised dog food business Tails.com this week, in a sign big companies are taking direct-to-consumer challengers seriously.
Pet food is a £1.75bn market in the UK and a spate of young companies have emerged with organic, healthy or hand-made offerings (Issue 22 digs into this trend).
There are several interesting brands in this space. Butternut Box sends out grain-free, home-cooked dog food that’s tailored to each pet. In February it raised £5m to add to its product offering.
Another, Cotswold Raw, has raised over £985,000 for its premium raw dog food brand since launching in 2015.