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Lessons I learned from the failure of my first startup, Dinnr

356 pointsby jefflinwoodover 10 years ago

41 comments

chvidover 10 years ago
I am reading thru this and it is a good, recommended read however I am getting slightly annoyed with academic attitude of the author. Like batman in the cartoon I want to slap him but not for &quot;sloppy market research&quot;. But for using the term &quot;market research&quot; at all.<p>(This is essientially the first and maybe the second point reiterated.)<p>Suppose you were a cook with your own restaurant. How do you figure out what works and what doesn&#x27;t?<p>Do you go and do market research, have questionaries, focus groups, do statistics, user-driven cooking or whatever?<p>Surely not. You create dishes, put the new ones in the menu as today&#x27;s special. Then you figure out whether people like them or not.<p>How do you figure that out? Do you ask them? Of course you don&#x27;t because you know that if you ask &quot;did you enjoy your dinner?&quot; People will just be polite and tell you &quot;yes - it was excellent - thank you very much&quot;. No. You look at whether they finished their plates or send it back half-full. Whether you get any sales. Whether they come back for more.<p>Even my mother knows this. When she cooks cookies, she doesn&#x27;t ask me &quot;do you like them?&quot; Because she knows I will just say &quot;yes - they are the best cookies in the world, mum&quot;. She asks me if I want another. And if I stay the night, she looks at whether I get up at 3 am to roam the kitchen for more of them cookies.<p>This is basic human behaviour but somehow lost in the academics of business administration.<p>The second thing is that I get the feeling that the author simply haven&#x27;t explored the huge &quot;product space&quot; between takeaway and ready-to-cook prepackaged ingredients with a recipe at all. How about - this is essientially takeway but you have to heat the curry in your microwave and then add the fresh coriander yourself - the upshot is that it will last a week in your fridge should you not eat it all tonight. Or maybe: It is protein shakes and vitamin pills for a week - no problem - it stays &quot;fresh&quot; for 5 years. Or: It is the latest Jamie Oliver book with ingredients to get you started on the first three dishes.
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l33tbroover 10 years ago
Post mordems like this make me sad.<p>Not for the founder&#x27;s bank account per se, but for the fact that he has all the wrong takeaways from his startup experience.<p>You started off well. You did the market research. Great. You&#x27;ve clearly gotten people interested in the service. Even better. You demonstrated in your post that a clear-headed approach was taken and you objectively determined people would want your product.<p>But then ... what ... you just buy a bunch of groceries and think people will just engage with your service? Not once in your start-up debrief do you mention your marketing approach. That&#x27;s a huge red-flag for me about how you thought about your business.<p>Lesson 8. Marketing.<p>I believe this idea would have worked if you had decent marketing. Do I live in England? No. But I still know that the Brits are getting a lot more concerned about health. Even Jamie Oliver with school dinners and other social ventures. It&#x27;s a sentiment that has cultural traction and I think the idea here is great.<p>But marketing ... oh yeah that thing:<p>- What was your overall engagement strategy?<p>- What genuinely creative concepts did you come up with that would make your service compelling and sexy to your people?<p>- How did you demonstrate how to use the service?<p>- How did you make others see the value your market research subjects saw?<p>- What compelled people to emotionally invest in your company as a consumer?<p>OP, you&#x27;re a smart guy - so I&#x27;m using your failure as a case-study for a greater trend I see amongst startups around &quot;pain points&quot;. Sure, pain points are important. But people forget that marketing, done well, is the creation of pain points.<p>I believe most startups die because founders don&#x27;t have a vision beyond the mechanics of the business. It&#x27;s sad to see post-mortems like these that point the finger back at the idea - which was inspired and had legs. I&#x27;m not sure what the marketing strategy was here (OP didn&#x27;t think it was important enough to tell us), but I&#x27;m assuming like most he was happy enough with I-stock artwork and a quirky explainer animation that the public is so thoroughly bored of.
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tchock23over 10 years ago
It&#x27;s a bad idea for founders to be doing their own market research. The prevailing advice from &quot;startup gurus&quot; like Steve Blank is that you must &quot;get out of the building&quot; and talk to customers face-to-face. Here&#x27;s the problem with that advice (as Dinnr found out):<p>1. Very few people will tell a founder their idea is bad right in front of them; and<p>2. Founders suffer from the worst case of confirmation bias ever. They are only looking for positive signs that their idea is good.<p>There are ways around this error if you know market research methods well enough, but unfortunately the prevailing wisdom in the startup community is the only way to do thorough market research is for the founders to &quot;get out of the building&quot; and do in-person interviews.<p>It&#x27;s refreshing to see articles like this where the founder realized their errors and didn&#x27;t just outright blame the process of market research.
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burgersover 10 years ago
<i>&gt; even if your company isn’t tech-heavy (such as Dinnr).</i><p>I feel like this would be a giant red flag to me. You are essentially a logistics startup, and you believe this is not &quot;tech-heavy&quot;. Logistics is likely one of the most complicated tech-heavy problems being solved right now.<p>Things like pricing(30% margins in grocery food sounds very high), recommendations etc. Was there ever a way for food bloggers to have their recipes automatically pulled into Dinnr for readers to purchase?<p>This is almost a 100% tech company. I wonder how much of underestimating that, combined with the founders possible(I&#x27;m guessing) lack of tech knowledge contributed to the failure.
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rcarrigan87over 10 years ago
This seems like a fairly easy idea to test without any capital investment but a bike and a landing page.<p>1. Throw up landing page explaining service<p>2. Have people put in orders via email or form submission<p>3. Ride bike to grocery and deliver items<p>4. Collect cash or use Square upon delivery<p><i></i>Market test complete. Failure with minimal $ committed.<p>It worries me that an idea that could be done for so little capital is able to raise money. These are heady times.<p>Question to OP: did you ever consider targeting caregivers who would like to cook for their loved ones but can&#x27;t leave the house for significant periods?
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idlewordsover 10 years ago
I like post-mortems but I vehemently disagree with the author&#x27;s approach of trying to draw more general conclusions, to appeal to a startup audience.<p>What specifically happened? What were the recipes like?<p>Did anyone like the food?<p>Your experience is the most valuable thing you gain from a failed experiement. I urge you not to try to distill it into business platitudes. Be specific and descriptive!
DontBeADickover 10 years ago
&gt; b) People are too optimistic about their future behaviour.<p>I read about a focus group once where a company was asking consumers about different color tea kettles. They had tea kettles in a dozen colors and asked people which one they would purchase. The responses were split fairly evenly among all the different colors. At the end of the day, the people who participated in the focus group were allowed to take home one of the tea kettles for free. Almost all of them chose white or black.
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mbohanesover 10 years ago
Hi all, I am the author of this post. Thank you very much for your comments, some of which were really thought-provoking. I will address them in a separate blog post when I find the time, probably next weekend. @mbohanes
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girvoover 10 years ago
Amazingly negative comments on this. How interesting. I thought the post has value, even if they are mistakes that people make over and over... which is interesting, to my mind, and means I should try extra hard to not fall prey to them. It seems like that&#x27;s easier said than done however, no matter how &quot;obvious&quot; and &quot;simple&quot; it is...
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tptacekover 10 years ago
This post links to an e-book by @robfitz called _The Mom Test_, which I hadn&#x27;t known about before. It&#x27;s fantastic and totally worth the price; also, that guy can write. I can see so much of my own bad pitching in the &quot;how not to do it&quot; examples he gives.
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bhaileover 10 years ago
Thanks for writing it up. Processing what went wrong will lead you to better opportunities up ahead.<p>Interesting though on #5: &quot;As one of my first investors later told me, you must have developers on your core team in the same room.&quot;<p>I think this is never the guess and am surprised when some startups take their devs offshore.
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hartatorover 10 years ago
&quot;I will try not to go too much into the Dinnr specifics. Most of the readers of this post will not be interested in Dinnr itself.&quot;<p>It&#x27;s actualy the interesting part. Advices or lessons don&#x27;t have a lot of value without context.
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gioeleover 10 years ago
&gt; No way it would be an investment that would give investors a 10x return.<p>I think this kind of expectations ruin good business ideas.<p>A thing like Dinnr may have worked well if run for years, not just tested out for 18 months. It may have not produced a 10x return, but it may have been enough for four people to live on and, maybe, then expand to another city and have four other people live working at Dinnr 2.
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jqmover 10 years ago
I&#x27;m sorry to hear all the &quot;psh...of course it didn&#x27;t work. he should have done this and that&#x27;s!&quot;.<p>I thought this was an interesting read. Armchair after-the-fact analysis when you weren&#x27;t the one involved (which can cloud judgement) is pretty easy.<p>Thanks to the author for taking the time to write up his experiences.
pbreitover 10 years ago
Count me among the many wondering if the correct lessons were learned. I still have the feeling that the basic concept is OK and that the execution was lousy. He needed 10 very good, easy-to-provide&#x2F;make recipes at a decent price point. And then market&#x2F;sell the bejeezus out of it.
mgkimsalover 10 years ago
&quot;Having such detailed feedback wouldn’t require diving into the data, but having someone spend an hour stress-testing my thinking and assumptions would have been gold dust and could have prevented a lot of effort wasted.&quot;<p>Hrm... I get asked (on occasion) to do this sort of &#x27;stress test&#x27; on someone&#x27;s idea - and <i>usually</i> they don&#x27;t want to hear the negatives anyway. Sometimes it can morph a not-great idea in to a better&#x2F;great one, but sometimes the reality is &quot;this should be dropped&quot;. I wonder if the author had actually received some of that hyper-critical thinking on dinnr earlier, and the feedback was &quot;this is bad, don&#x27;t do it&quot;, if he&#x27;d still pressed on or not.
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vinceguidryover 10 years ago
&gt; I really would have needed a critic who said: &gt; “Look, you have the following problems: &gt; 1. Show me your market research. &gt; 2. You do realize there’s no comprehensive online supermarket in Sweden, right? &gt; 3. What are your assumptions about the customer’s problem?<p>Yeah, after trying, I&#x27;ve found it&#x27;s very difficult to get people to listen to this kind of advice and give it the weight it deserves. I feel like most would-be entrepreneurs either can already think in this manner themselves and so don&#x27;t need me or anyone else to do it for them or are destined to learn how, expensively.
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markdownover 10 years ago
An entrepreneur in New Zealand created such a service in March 2013. It&#x27;s now worth $27m and is expanding into Australia.<p><a href="http://www.brw.com.au/p/business/mid-market/how_frustrated_cooks_built_my_food_LRXkljPy7bKBAcvUiZ48JP" rel="nofollow">http:&#x2F;&#x2F;www.brw.com.au&#x2F;p&#x2F;business&#x2F;mid-market&#x2F;how_frustrated_c...</a><p><a href="http://www.myfoodbag.co.nz/" rel="nofollow">http:&#x2F;&#x2F;www.myfoodbag.co.nz&#x2F;</a>
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sgdesignover 10 years ago
Something I see missing from a lot of these startup discussions are the ideas of identity and community.<p>Sure, &quot;solving a problem&quot; is important. But Nike isn&#x27;t solving a problem that other shoe companies haven&#x27;t solved a thousand times over. The reason they&#x27;re successful is that buying into their brand makes you part of a bigger community, and that community has a positive identity attached to it.<p>Same thing with a startup like Exposure (<a href="https://exposure.co/" rel="nofollow">https:&#x2F;&#x2F;exposure.co&#x2F;</a>). Sure, the product is great, but they&#x27;re also fostering a community and projecting a very specific image. Without that special &quot;something&quot; they&#x27;d be no different from Flickr or the countless other photo sharing services out there.<p>This brings me to Dinnr. Did you try to grow a community of passionate members organically by writing a blog, hosting events, being active on forums like whatever the Hacker News for cooking is?<p>Or did you just try to &quot;solve a problem&quot;?
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mikpankoover 10 years ago
Looks like Blue Apron is doing much better with the same idea in the USA - according to CrunchBase they raised $50M in round C several months ago (<a href="http://www.crunchbase.com/organization/blue-apron" rel="nofollow">http:&#x2F;&#x2F;www.crunchbase.com&#x2F;organization&#x2F;blue-apron</a>).
dusklightover 10 years ago
Uh so the author ventures the hypothesis, that no one used his product because there was no demand. Can I venture a second hypothesis? No one used his product because it was too expensive? How much did things cost and how did dinnr experiment with pricing?
dkarapetyanover 10 years ago
This is only one level removed from what munchery does and I actually would pay for this service if it was in SF and they also offered on premise cooking lessons or something along those lines. This is still in my opinion a pretty good idea and has wings.
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ufmaceover 10 years ago
Right after I read this, my immediate reaction was to feel kind of annoyed at the author. A little superficially, no tech or design talent in house, no food industry experience, and not much marketing and sales expertise, so what exactly does he bring to the table here, besides really wanting a startup?<p>Also, this idea hits on one of those things that lots of people really want to believe that they would do - cook their own healthy, organic, gourmet, etc food - but very few will actually take much initiative to do on their own. That doesn&#x27;t necessarily mean that it isn&#x27;t viable, but it does mean that your big challenge is going to be marketing and conversions - getting people to go beyond saying things that basically mean &quot;I really want to believe that I am the kind of person who would use something like this, even though I&#x27;m not&quot;, and actually buy the product regularly.<p>After thinking about it some more and reading some of the posts on here, this might be a viable idea, but it&#x27;s going to need a lot better marketing to go anywhere. A few ideas, some stolen from other posts, mostly in an attempt to exercise my own marketing-think muscles:<p>Make the product stickier - try to sell a recurring plan of a meal a week that has to be explicitly cancelled. Or at least email people who have ordered regularly to suggest new meals for them. You do have new, promoted meals, right?<p>Have a spread of products, from things that just require heating, barely a step above microwavable, though mild prep, up to things that may require an hour or 2 in the kitchen to make. See which ones sell the best, and emphasize those.<p>Try to partner with anybody involved in cooking or recipes with an audience in the area. If they&#x27;re on the web, make it super easy for them to submit ingredient lists for their recipes to you, then an easy way for them to put a link on their site for &quot;Get the ingredients for my [whatever] delivered to your door today with Dinnr!&quot;, with affiliate payments for orders. Now you&#x27;re helping them monetize their sites too, so they have a good incentive to work with you.<p>In person, too. There&#x27;s probably some cooking classes in the area. Get those classes to plug your site for their students to get ingredients for an affiliate fee.<p>Get some cooking experts on staff, and start producing your own youtube videos and blog content on how to cook things, with an emphasis on explaining the basics for newbie cooks. It would probably help you make sure you&#x27;re actually getting good quality ingredients too.<p>Make social connections. Make a way for people to tell their friends on FaceTwitInstaPint that they just cooked X, and it was awesome! It might even be good to make it so that they can only order basic things at first, and they get points or something from cooking them, which will eventually make them eligible to order the more advanced things. They can brag about how many Dinnr points they have. They can see that they&#x27;re either getting more than the other guy, so they can think they&#x27;re better than them, or they aren&#x27;t getting as much as somebody else, so they need to order more stuff. Then you can suggest new meals, too, based on their skill level and their preferences.<p>The real pain point isn&#x27;t shopping, getting ingredients, or throwing away unused ingredients. It&#x27;s wanting to be seen to their social circle as the kind of person who cooks awesome stuff. Figure out how to hit that, and you&#x27;ll probably sell.
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porkerover 10 years ago
If anyone wants to hire a critic (per #4) I am your man! I find entrepreneurs don&#x27;t like hanging out with me because I am &quot;not positive&quot; enough (you&#x27;re meant to surround yourself with upbeat go-do people right?). However, this pessimism also translates to realism. I&#x27;m not always right, many times too pessimistic esp about new ideas, but many times right about why an idea isn&#x27;t going to fly and where the weaknesses are.<p>If you have ideas how to make that skill marketable (or even better received)...
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usavover 10 years ago
Thanks for sharing this! I appreciated how candid you were. I&#x27;m sure a lot of startup founders are taking a look at what they&#x27;re building right now to look for the same patterns.
gingerlimeover 10 years ago
Funny, I just bumped into a startup[0] that seems to do the same thing, and looks like it received some funding[1]...<p>I wonder how well these guys are going to do.<p>[0] <a href="http://signup.marleyspoon.com/" rel="nofollow">http:&#x2F;&#x2F;signup.marleyspoon.com&#x2F;</a> - it&#x27;s operational in germany at <a href="https://www.marleyspoon.de/" rel="nofollow">https:&#x2F;&#x2F;www.marleyspoon.de&#x2F;</a><p>[1] $1.5M Seed according to <a href="https://angel.co/marley-spoon/" rel="nofollow">https:&#x2F;&#x2F;angel.co&#x2F;marley-spoon&#x2F;</a>
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sblankover 10 years ago
Hmm. Was this written in 1999? Or perhaps the notion of the Lean Startup is not understood in London?<p>Seriously, the author seems completely unaware that his &quot;lessons&quot; could have been avoided if he would have simply looked at the growing body of literature, on-line classes, Startup Weekends, blogs by Eric Ries, Alexander Osterwalder, et al that now exist.<p>Even in writing these lessons he seems to be unaware of them.<p>What&#x27;s missing?
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mrfusionover 10 years ago
So why is plated doing so well?
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mbohanesover 10 years ago
I am the author of this medium post. Thank you for bringing it to this forum and for the intense debate around it, some comments were highly interesting and brought me to re-assess my own lessons learned.<p>I will set aside some time in the next few days to write a response to most of the points raised. I&#x27;ll then post the link here (or you can follow me on twitter @mbohanes)<p>Again, many thanks for taking the time.
learnstats2over 10 years ago
All the A&#x2F;B testing in the world feels desperately pointless when a founder claims that the #1 lesson learned was a 7th grade statistics lesson. <a href="https://en.wikipedia.org/wiki/Suggestive_question" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Suggestive_question</a>
spydertennisover 10 years ago
You should have just delivered multiple meals at once. With an accompanying schedule and appropriate food that wouldn&#x27;t go bad before its time.<p>Then you are removing the inefficiency of buying food items that you only use portions of and eliminate things going bad.
xuxover 10 years ago
&gt;However, 5 months later, after the new website was up and running<p>Why take 5 months to make a new site?
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porkerover 10 years ago
I disagree strongly with the generalisations in #2. I do not find people in the UK people who actively do. The education model sounds very similar to Austria.<p>London Business School is world-class and the self-starters who go there are self-selecting.
thehal84over 10 years ago
Not suprising the story sounds similar to the pets.com failure.<p>Groceries distribution requires good experience and knowledge of logistics.<p><a href="http://en.wikipedia.org/wiki/Pets.com" rel="nofollow">http:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Pets.com</a>
james1071over 10 years ago
I am in London and just don&#x27;t see who the target customer was meant to be.<p>If I wanted to buy some ingredients, I would go to the supermarket or (usually a better choice) one of the many different foreign grocers that are 5 minutes away.
freddyduarteover 10 years ago
My only question is: Why would anyone invest on Dinnr when it had an insignificant client base and no profits? OP must be a great sales person or have great connections.
JackuBover 10 years ago
<a href="https://twitter.com/iamdevloper/status/432658088605515776" rel="nofollow">https:&#x2F;&#x2F;twitter.com&#x2F;iamdevloper&#x2F;status&#x2F;432658088605515776</a>
liuwover 10 years ago
The &quot;Turd Polishers&quot; picture really makes me laugh.
mrfusionover 10 years ago
What&#x27;s an online supermarket?
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endzoneover 10 years ago
this guy has some funny ideas about &quot;anglo saxon&quot; education. british education is by and large very much like the austrian model in delivery at least, though we are not as keen on specificity.
briholtover 10 years ago
I can&#x27;t help but have a very negative reaction to this, not necessarily at the author, but at the startup ecosystem as a whole. These are posted as &quot;lessons&quot; as if they were difficult to learn, when this really should be labeled &quot;things no responsible person would ever not know before even considering raising money.&quot; Of course you should be self-critical of your product, of course you should test with real customers, of course you need a technical co-founder, of course you should pick a market with a bigger niche than tech-saavy-foodie-cooks-in-major-cities. Every mistake was classic marketing grad trying to do startup things in a bubble environment. These are the types of &quot;lessons from my failed startup&quot; that have been written a thousand times before. I fear over-exuberant and irresponsible entrepreneurs will repeat these mistakes for as long as startups exist.
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