26. March 2013–
Accepting that your startup just isn't working, and that it's time to move on and cut your losses, can be one of the hardest things for a founder to do. Some become completely disheartened and decide to give up on entrepreneurship, preferring to avoid the huge effort of launching a company that statistics say is more likely to fail than succeed.
And despite being a part of everyday life in the startup industry, failure is something that is rarely spoken about and largely excluded from the tech press, which prefers glorifying successes to reflecting on failures. The significant stigma surrounding failure has inspired the FailCon movement, which wants founders to embrace failure rather than hide it, and has even led to one disillusioned German founder calling for the word failure to be removed from the dictionary.
However, the more optimistic entrepreneurs bounce back from non-successes to keep working until they're onto a winner – whether that comes after two tries or 20. Peter Clark, the British cofounder of Silicon Valley-based newsletter management service Userfox, is one of them. He launched Userfox just a year after pulling the plug on his previous startup, Vimessa – and with a fresh $700,000 funding round from Y Combinator, 500 Startups, Berlin VC Point Nine Capital and others, the horizon is now looking bright for Userfox and its founders.
We caught up with Clark to find out why there's so much hype surrounding failure and why he's convinced that Userfox won't be going down the same path as Vimessa...
What inspired you to launch Userfox?
We were solving a problem we had in the past – maintaining user retention through emails and newsletters. We built some of Userfox from our previous startup, Vimessa – we realised what was working in it and what wasn't and went from there.
So what Userfox does is help companies send better, more targeted emails and newsletters to encourage users to buy products. It does this through drip welcome, inactivity, and retention email.
We are now sending about five million emails a month on behalf of companies, we have hundreds of companies using it. Userfox is growing about 20 per cent per month, I think. We're aiming at software companies that have a trial period, as we have a significant conversion rate from free to paid users, or to paying more money.
You've dealt with a failure before launching Userfox, can you now pinpoint what the problem with Vimessa was?
If you're a consumer product, you have to be really, really viral in order to grow and Vimessa wasn’t. It was an app that let iPhone users send video messages and the thing was that people only really had video conversations with two or three people, and so they only did it occasionally because they very quickly exhausted the viral loop. So it was very hard to get the hockey stick growth that you see from WhatsApp and so on.
What was it like deciding to give up on Vimessa and move on?
I think I’ve always believed that it is important to kill the product if it isn’t working, so if you are spending far too long on the wrong idea. After launching and seeing the influx of users and then the amount of users that remained, we had maybe 10,000 users straight after launching, then it was five and a half, then two and a half – so I think it was fairly obvious it wasn't retaining users.
Personally, I've been doing this for quite a few years now and I have been in this position in the past and you have to approach launching a product with the expectation that you'll have to let it go if it doesn’t work. So having feedback that no one wants your product is one of the best outcomes – because at least then you know and you can move forward.
Do you believe failure is overly stigmatised in the startup industry?
I mean everyone looks at this like it is such such a terrible thing, but to be honest this is something that happens in every profession – journalists have articles killed, architects have buildings that don’t get approved. I think it is part of the hype of startups; they are so over-hyped, and the work that goes into them.
There are so many jobs that are harder than working in Silicon Valley. You could be serving in Iraq or something. So I think what is really important is to keep your head down and continue working even if it doesn't work out the first time.
You have a British background. How do you think the attitudes towards failure differ between Silicon Valley and Europe?
You also have startups in the US that need to change their idea and are too embarrassed to. Killing a product or not killing a product, it’s the same no matter what country you are in. But I think in the US it is less awkward to tell your friends that something didn't work out. In England, it could be more embarrassing.
Why did you chose to launch your startup in the US?
I think because there is more money from investors. I think the investment market of the city you are in makes a very profound difference to your startup. And in Silicon Valley, this is sort of a fringe benefit. But, generally speaking, I think most companies can exist in Europe, though there are definitely some benefits being in Silicon Valley – especially if you are working with companies based there.
Did you find it challenging to get investors on board for your next startup after Vimessa didn't work out?
That wasn’t an issue at all. I think it shows a certain amount of aptitude. I mean, investors are interested in you building a whole company not just a product. So having to kill products isn’t a good thing but it isn’t a bad thing. I think the whole thing is exaggerated, so I don’t think if your previous company died that investors will be more or less likely to fund you. I think it is just a non-issue.
For related posts, check out
“Deviate, iterate and try something else.” Why one disruptive Berlin founder thinks there’s no such word as failure
How founders should deal with startup failure – Six stages of failure and redemption
“Germany’s startup ecosystem is 20 years behind Silicon Valley”: 10 Things I Know – Startup Camp’s Sascha Schubert