It’s rather unusual for a founder to review, analyze and publicly write on the failure of his company. Roger Ehrenberg – the co-founder of Monitor110 – which went down in July 2008, turned to be an exceptional entrepreneur and investor who wrote a candid and objective account about his own company’s failure. He concluded with seven deadly sins which Monitor110 committed and which ultimate brought it down. These sins, presented in the post-mortem analysis, are:
1. The lack of a single, “the buck stops here” leader until too late in the game
2. No separation between the technology organization and the product organization
3. Too much PR, too early
4. Too much money
5. Not close enough to the customer
6. Slow to adapt to market reality
7. Disagreement on strategy both within the Company and with the Board
One or combination of these “sins” are characteristically contribute, directly or indirectly, on slowdown, shrinking or eventual failure of businesses. A little later, Roger posted again, this time more elaborating and digging deep in search of underlying issues and their interconnections. His The Good, The Bad, and The Really Bad provides practical advise and warning against possible pitfalls. The “good” part of his advise to all entrepreneurs concerns especially the idea articulation and fund-raising – two essential pillars any businessman and entrepreneur must give a serious thought to early on:
1. Believe deeply in the mission and vision of the company; otherwise, no one else will.
2. Use few words, many pictures and be brutally clear. If the audience doesn’t get it within 60 seconds, it’s tough sledding.
3. Think of lots and lots of use cases and be ready to share them at will. This isn’t just for pitching; you’ll need this to understand the market opportunity as well.
4. Pitch early and often. We learned so much from speaking to dozens of smart, insightful people. I think we would have failed faster and better and/or increased our chances of success if we had listened more.
5. Hone the pitch on lower-likelihood prospects early and ramp up to the real targets after polishing the presentation and the delivery. The first bunch of times you will suck. After sucking for 5-10 times you’ll tend to get much, much better. There is no way to short-circuit the process; there is simply no substitute for experience.
After thorough and clear-headed analysis of what went wrong and after connecting the dots, he realized that Monitor110 essentially mis-performed in following aspects:
1. Great team, wrong team
2. Inadequate metrics
3. Resources spread too thin
4. Poor cash burn management
Self-analysis and open-mindedness in critical times are essential not only individually but even more so for our business and entrepreneurial undertakings.