A {grow} Community Week Contribution by Caroline Di Diego (aka Casudi)
Failure is a stigma in our culture, so we tend to put it out of our minds, and avoid it at all costs. Yet, failure is unavoidable … and according to Seth Godin and many other entrepreneurial gurus, quite desirable.
I have been in business more than 20 years and consider a successful FAILURE as a pivot point, not necessarily a stopping point. Here is the story of my most recent “FAIL” credential!
In May 2010, I founded emidaASIA with Alex Conrad, a seasoned entrepreneur with vast experience in Asia. We had the idea of introducing ‘mobile money’ to the “un-banked” population in Asia. Those without bank accounts could engage in commerce via their mobile phones, thus taking a giant step into the 21st century.
We licensed technology from Emida, a leader in prepaid global solutions, with operations in 40 countries outside Asia and $1+ billion annual payments. They are a smart, profitable, established company, and I had personally known the CEO for over 10 years. In fact I had brought some of the first angel investors to the company!
We did all the right things: we set goals, and had measurable milestones to success, with realistic time frames. We separated strategy from tactics and knew the signs to look for in a strategic FAIL (failure to execute the overall plan in the defined timeframe) versus a tactical FAIL (failure to execute the individual steps which result in accomplishments along the way).
Our first goal was to test the viability of this exciting new business model in Asia.
Our mobile products were developed to target opportunities for mobile customers to connect through our product — driving more traffic on the network, more transactions and more revenue and profits. Good for everyone’s bottom line!
Fast forward — a year later — we were just not getting traction and the team was faced with the fact that we were failing.
But a bigger decision was HOW to fail? We had to review assumptions, and analyze missed goals, (and there were many), including our conviction that we would be able to spread the Emida ”rest-of-world” scenario straight across Asia.
Some of the tactical goals we missed were related to the time & cost to bring a partner to contract; technical back-up for multi-language implementation; and finding key personnel to run local operations.
We also found that our market assessment and business model assumptions were incorrect:
- Market saturation was rapidly increasing with seemingly competitive products often with no transactional history…..
- Local operators were reluctant to get too far ahead of the market, they were unwilling to select our product over competitor’s mobile wallets……
- Government and bank approvals can be excruciatingly slow. We should have given more consideration to the ‘gray’ and ‘black’ aspects of soliciting approvals……
- Our licensing model was too thin to support a viable business to pay us, and multiple 3rd parties who expected a piece of the transactional pie…. As a self-funding company, staying power to wait a couple of years for critical mass was not there.
We were facing rapidly saturating markets, impossibly slow and murky approval processes, and seriously diminished margin expectations.
So now what? We recognized that we had a “strategic FAIL”, and came to a quick decision. While it no longer made sense to move forward as planned, it also did not make sense just to simply walk away … there was a lot of brand equity established.
We quickly established a new partnering agreement with Emida, which transitioned the emidaASIA brand equity and market intelligence over to them. Combined with their resources and experience in other parts of the world, our equity enabled Emida to build on our gains with a fresh look.
Although we failed, we did salvage the project and gained a wealth of knowledge through our demise:
- Build in flexibility to account for changing market conditions — even when we thought our assessment was solid.
- Licensed technology is a great way to get a quick start in a marketplace, but you have to be able to accurately communicate to the marketplace what they are investing in? (IP and/or mega traction)
- Scaling rapidly across a continent benefited from a key partner.
- Although our major thrust was a failure, in the process, we identified MANY exciting business opportunities in related niches, including predictive analytics for the mobile money transactions.
So stay tuned, we’re not done yet! New ideas and businesses will emerge from the ashes!
Don’t you agree that this was a successful failure?
Caroline Di Diego (CASUDI) is a multi-faceted entrepreneur with more than 20 years of experience with early-stage companies, building effective start-up teams, creating workable business models, and bringing new technologies successfully to market (well usually!). You can find her blog at www.esse-group.com and follow her on Twitter @CASUDI
