Startup idea analysis
This article continues our series where we elaborate, analyze startup ideas. The author – Artur Prokopchyk – possesses product management background, develops his own food tech startup and sometimes consults local founders-newcomers. Sometimes he comes up with startup ideas and carries out simple desk research, publishing it in Code Inspiration’s blog.
By the way do not forget that if you have a startup idea, we can review it and publish a desk research similar to this one. This option is 100% free of charge.
Many founders and product managers learn startup success stories and do not pay much attention to failed startup stories. So, there are 2 questions:
- Is it useful to analyze failed startup stories?
- From this, is it a good idea to create a startup – a website-aggregator of failed startups stories?
Current situation, startup success stories
There is a lot of content on the internet regarding startups and product management. And content describing success stories of great companies of nowadays has a special place among all the content. This startup success stories analytics is extremely popular, on the one hand experts carry out research and publish articles about this or that startup success reasons, on the other hand users read this analytics and try to apply something for their own products and services. This is, no doubts, great.
Anyway, there is another important aspect. Indeed, learning startup success stories is interesting and useful. Simplifying the matter, learning startups success stories helps to answer the question “What to do to become a successful startup?” And here is the problem: acting this way we encounter a so-called survivorship bias. That is, successful startups and companies only occupy all the field of view, and there is no place for failed startups and their stories in our vision. Nevertheless, there is a great value in failed startups stories elaboration. Analysis of failed startups is not less useful than learning success stories because it helps us to answer the question: “What not to do in order not to become a failed startup?”
By the way there is a section about survivorship bias in business right on Wikipedia. The same situation with startups: looks like no one cares about dead unsuccessful startups and their stories, mistakes, wrong decisions that led to a startup’s failure. And it would be useful enough.
Startup idea: a website that collects failed startup stories
Startup idea description: to address the survivorship bias in a startup and product development there is a need to create a website where users can share failed startups stories and discuss them.
Key parties to the process and their benefits of using the website:
- Founders and/or employees of failed startups – can share the story on the website to get feedback, help other founders, make useful contacts.
- Startup founders – can read about failed startups, their mistakes and decisions so that not to repeat them and be prepared for possible risks. Startup founders can check this failed startups’ knowledge base and, possibly understand:
- A similar startup failed, and it makes no sense to repeat it,
- Or doing a startup there are mistakes not to repeat and risks to keep in mind.
- Product managers – can read about failed startups for professional development, propose and discuss possible successful solution(s) for a given failed startup.
- Investor, mentors, experts, marketing specialists, analysts: find aggregated information about failed startups, catch some insights about the given industry and market, use this information in their research.
Even though there are many parties to the process, the website is aimed at startup founders mainly. Imagine how many efforts could be saved if a founder knew the given startup had been launched and failed.
At a high level (according to Lean Startup Business Model canvas) how the startup idea could be described? – Probably, something like:
- library of failed startups
- failed startups’ knowledge base
- failed startups’ catalog
- digital graveyard of startups
Making any product or service, it is important to know about the existence of similar solutions and competitors. For the given startup idea we have:
- Crunchbase – world leading aggregator of startups and innovative companies – it is possible to sort and browse closed companies and information about them.
- Specific forums and groups in social networks where users discuss failed startups. This aspect requires more research than the single link provided, but enough for the article. Existence of forums and discussions where users talk about failed startups is a direct evidence of interest in the topic – the startup idea to create a special website makes sense.
- Failory website: aggregator of interviews with both successful and failed startup founders – probably, the most similar to the startup idea we discuss, but the content is not limited to failed startups and startup stories are presented in the form of interviews.
The research of existing solutions should be continued if we decide to create a startup, however, for the needs of the article this is enough. Existence of mentioned platforms almost lets us confirm interest in the topic.
Failed startup stories website
Let’s describe some features of the website. At its core, it should have a page with a failed startup cards list. A card of a failed startup should contain the following information;
- Startup name;
- Startup description;
- Startup’s industry;
- Secret sauce, description of any technology a startup is based on;
- What was done;
- What was planned to do;
- Reasons for failure, bullet points.
Then, a user can select and open a failed startup card and get information in full, including everything from the short card, namely:
- Startup idea and hypothesis generated;
- The problem or pain startup tried to address;
- Relevant content: video, photos, infographic, images, schemes, business plan, one-pager, presentation, etc., if any;
- Competitors and similar solutions at that moment;
- Startup team, information about each team member and his/her expertise, role in the project;
- What was done, what was planned to do and why;
- Market research data, if any;
- Investment history;
- Reasons of failure.
In addition to simple reading and learning startup failure stories, a user can take part in a discussion. It should be possible to discuss startup failure on a forum or right on the failed startup’s page. Probably, users can not only discuss mistakes, but also try to elaborate what should be done to make the given startup successful. And maybe unite and relaunch it?
Actually, the platform should also have some features to encourage users to take part in platform development. For instance, failed startup founders, who are expected to submit their stories, might not like to spend 1-2 hours filling in fields mentioned. So, some motivation should be added. Probably, it makes sense to apply some monetization features for the website, but right now I cannot elaborate any suitable monetization models. Maybe simple paid access to the database with a free of charge access to the one who submitted a failed startup story could work, but I’m not sure.
Knowing the success stories of this or that startups is great. It lets founders understand what competitors do and how to improve their own products or services.
And knowing failed startup stories is even better. This provides founders with the knowledge “what not to do to not fail”. In other words, to avoid mistakes in startup development.
This means that it makes sense to create a special website where, on the one hand, founders of failed startups will submit their failure stories and, on the other hand, product managers and other founders will browse these stories and learn what mistakes to avoid. Or even do nothing and think of a new startup idea, because the same startup was launched and failed.
More startup ideas’ analysis
Please have a look at more articles where we analyze startup ideas:
- Startup Idea: Aggregator of Startups with Automated Investment Feasibility Assessment.
- Startup idea: E-Government Solutions Development Outsourcing.
- Startup idea: Mobile application for Schoolers and Students.
- Growth Hacking Strategies – carried out a research and interviewed more than 100 business professionals who share more than 50 growth hacks.
- A selection of 20+ articles about startups.