NB: This is a guest article by Keith Petri. It originally appeared on his blog, KeithPetri.com. Petri is a small business consultant focusing on implementing new technologies and providing traditional consulting services for his clients in the restaurant and hospitality industries. He conducts market research analysis to implement strategies to increase customer base. Follow Petri on Twitter.
iGottaGuide was my first scalable technology startup. Prior to working with my co-founder and developer Michael Griffiths, we both had extensive experience in service-based businesses.
We saw tourism as a fragmented industry, hard to navigate with a massive amount of information and options available. While the best way to experience a new city is like a local, connecting with a local expert willing to share his insight and, more importantly his time, was not something easily accessible.
Trying to be lean, we designed, developed, and launched a beta site with limited functionality and only a handful of tour guides within two months.
Leveraging a small network of entrepreneurs in New York City (thanks to Grant Griffin’s Poor Man’s Dinner) we arranged for initial user testing and feedback on what we believed to be a minimum viable product (MVP).
Once initial feedback was gathered we improved our user experience, product positioning, and our go-to-market strategy. Unfortunately, our efforts to avoid over-developing our product distracted us from analyzing our competitors.
We officially launched on April 15 2011 [TLabs Showcase - iGottaGuide] – three days prior to Vayable [TLabs] and at least three months prior to SideTour’s first iteration.
Without seeking funding or applying for an accelerator program (Vayable and SideTour sought funding from Dave McClure’s 500 Startups and TechStars NYC, respectfully), Michael and I were supporting our venture by splitting our time between consulting and iGottaGuide.
iGottaGuide inevitably failed due to a number of reasons. While I stopped focusing on iGottaGuide seven months ago, I have not had the time to reflect on its failure and learn from my mistakes.
However, I have recently taken the time to think about my professional experiences in hopes of better understanding my career goals and minimizing the chances of repeating past failures.
Similar to my peers, I view an entrepreneurial failure as the result of an isolated issue: in this case, bandwidth. However, after a discussion with Michael, we have outlined a number of issues that ultimately contributed to iGottaGuide’s failure.
1. Bandwidth
Time is my most valuable asset. As a recent graduate, I was faced with the decision to secure gainful employment and begin paying my dues as I worked my way, over time, up the corporate ladder, or pursue my entrepreneurial itch.
All jobs are demanding. Being an entrepreneur presents unique difficulties that are typically viewed as more challenging and time consuming than employment at a larger, more established firm. Starting a business requires time to strategize, formalize processes, sell, refine, and repeat.
I made a mistake and simultaneously started a consulting firm to self-fund iGottaGuide. Splitting your time between a full-time job and a startup decreases your chances of success both as an employee and an entrepreneur.
I jeopardized the chances of iGottaGuide succeeding from day one by dividing my time. It is now 19 months later, and only one business survived.
2. Chicken versus Egg
iGottaGuide was a peer-to-peer marketplace for unique experiences. An all too prevalent challenge with technology startups, our platform was only as valuable as the number of service providers (guides) and consumers (tourists) who utilized it.
When launching we realized the importance of growing both sides of the marketplace to ensure there were equal parts supply and demand.
We leveraged our network and contacted registered guides in New York City to provide supply while creating partnerships with Eventbrite, the Roger Smith Hotel, the Sanctuary Hotel, and Gomio to increase demand. Unfortunately, our strategy of leveraging existing supply and demand within an industry created a larger issue, further contributing to our failure.
3. Compete instead of disrupt
While initially setting out to bypass existing sales channels and inspire individuals to create unofficial tours based off of their personal hobbies and expertise, our tactic of aggregating existing supply within the industry made us a competitor to everyone who could originally help.
While we did have limited success with amateur tour guides, it was hard to extract value from them without sufficient scale.
4. Positioning
iGottaGuide was one of the first open marketplaces for unique experiences. However, as (one of the) first movers in the industry we were unable to capitalize on the opportunity to differentiate and gain market share.
Within months the landscape was flooded with similar business models ranging from social networks for travellers to unique activity listing sites and many, many more (constantly updated, thanks Tnooz). Increasing competition meant that it was harder to get market participants’ attention.
We found that a slight shift in positioning proved to be an underlying reason for success between numerous, localized competitors. For example, iGottaGuide directly competed with SideTour during the summer of 2011 in New York City.
With similar listings (many guides co-listed between the sites), we could exclude supply as a contributing factor.
While SideTour advertised its platform as a way residents could explore their own city by taking advantage of local experts, iGottaGuide positioned its service for tourists exploring a destination like a local.
As a result, SideTour could centralize its marketing efforts, for both sides of its marketplace, in one geographic location.
Whereas, iGottaGuide needed to, once again, split its efforts between increasing the number of local tour guides, and garnering the attention of the most highly sought after consumer group: travellers. And, the 50 million yearly visitors to the Big Apple, do not all originate from the same hometown.
5. Vanity milestones valued too highly
From an extravagant launch party to press mentions, iGottaGuide valued entrepreneurial milestones that did not result in an increase in the number of transactions.
While having the New York Times cover your startup may make a great speaking point at the next NYTM, its message doesn’t necessarily reach your target audience.
6. Feedback
Although efficient, our operations and development procedures did not allow for real informative user testing. Both Michael and I regret not being more thorough in gathering initial feedback on mock up designs, interactive mockups, and even simple surveys.
At no point in our creation process did we have a clear understanding of the conversion funnel. While shipping-it may be important, thinking through a process to minimize the likelihood of a negative response is even more so.
Overall, I have no regrets that I started iGottaGuide. I am certainly embarrassed by creating or contributing to so many of the issues that caused its failure, but the knowledge and lessons learned from experiencing it first hand will allow for me to take on my next challenge and further explore my passion for technology and business.
By taking the time to write this reflection I am hoping to better understand my past actions. Furthermore, I am hoping that by sharing them publicly I will be able to make others more aware of potential pitfalls.
When I was starting out I’d read about similar difficulties that I was sure I would evade, but I went on to repeat them anyway. Reading about the mistakes of others doesn’t always resonate directly with the reader, but experiencing mistakes first hand will allow him to more easily avoid repeating them in the future.
I am looking forward to making a few more mistakes, avoiding repeating similar blunders, and having continued success with CNSLT.us.
NB: This is a guest article by Keith Petri. It originally appeared on his blog, KeithPetri.com. Petri is a small business consultant focusing on implementing new technologies and providing traditional consulting services for his clients in the restaurant and hospitality industries. He conducts market research analysis to implement strategies to increase customer base. Follow Petri on Twitter.