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I returned home from Silicon Valley and built a failed startup

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Re: I returned home from Silicon Valley and built a failed startup

#21

Post by eterm »

kaitai wrote: post #11

I am a bit surprised that the article doesn't have any introspection about knowing the market (or not). It seems like the reasoning was: we want some money; women have money; women buy clothes; let's do fashion. It doesn't seem like there was much of a value proposition for the customer. Maybe the customer likes browsing Instagram. Maybe the customer asks all these questions (stupid questions as well as clarifying qu…

I think people really underestimate the value add from "easy, free returns" for clothes shopping.

I remember using ASOS 10 years ago and at that time most online retailers had poor returns policies. (Legally all must have a 14 day returns), but ASOS went further with free returns and even provided shipping labels and bags for returns with the original shipment.

I think my then girlfriend returned maybe 70% of everything ordered, it was just how it worked. You'd browse, impulse purchase then see how it looks and probably return it.

As a result they took almost all of her actual purchases. And because they provided shipping bags/labels/etc they no doubt reduced the turnaround time so they got stock back quicker and reduced the chance of lost or damaged stock they couldn't then sell on.

I don't know but I hope that most retailers have caught on and provide similar now.

Re: I returned home from Silicon Valley and built a failed startup

#22

Post by matrix »

This is interesting to me more because it's rare to see a story about someone building products for the Indonesian market, which is very large. To the author: I'd love to see an article with more about some of the challenges and opportunities you see in Indonesia for startups.

Re: I returned home from Silicon Valley and built a failed startup

#23

Post by melvinmt »

gexla wrote: post #20

I couldn't imagine doing something like this in the Philippines, which I'm guessing is much like Indonesia. Nobody has credit cards to buy anything online. Credit card alternatives haven't gained traction. People use cheap alternatives to Western Union to send money. Nobody surfs the web except at internet cafes. And at internet cafes it's either FB or homework. Nobody aimlessly browses when they are dishing out mone…

It's definitely super hard, but not impossible. You should read [1] how Rocket Internet expands in developing countries: they hire their own couriers who go out, deliver and take cash at the door. This way they solve both the distribution and the payment problem. This is similar to how many of China's biggest ecommerce players operate, they all have their own distribution/payments systems. If the infrastructure doesn't exist, you need to create it.

[1] http://thehustle.co/rocket-internet-oliver-samwer

Re: I returned home from Silicon Valley and built a failed startup

#24

Post by aherlambang »

exelius wrote: post #19
aherlambang wrote: post #15

Earlier quoted context omitted.

We did raise funding it was around $100k-$500k (not going to disclose the real amount). We realized that we needed some boost to test the market overall, but after 1.5 year of using that money and got to 30-40k UV per day, the path of profitability from that point seems far away, numbers just don't add up. It gets worse as I stated in the article that new startups in the same area are raising behemoth amount of fundi…

The hard part in building a two-sided market is getting users AND buyers on your platform. This generally means epic shit-tons of brand marketing to end users, which is where a lot of those millions of VC dollars go. There's really no way to get brand recognition otherwise -- you have to spend some ad dollars to inform users of your product. Ad spend is a zero-sum game from a competitive lens, so if your competitors…

Yes, so what you're saying is college student who sells aren't qualify as a part of my market since they can't fix this supply chain issue.

Which I also mentioned the way to solve it is to cut down the market size, so that only first hand suppliers are the ones majority selling

Re: I returned home from Silicon Valley and built a failed startup

#25

Post by aherlambang »

matrix wrote: post #22

This is interesting to me more because it's rare to see a story about someone building products for the Indonesian market, which is very large. To the author: I'd love to see an article with more about some of the challenges and opportunities you see in Indonesia for startups.

I wrote about some challenges in doing growth hacking in my other medium post :)

Re: I returned home from Silicon Valley and built a failed startup

#26

Post by gexla »

melvinmt wrote: post #23
gexla wrote: post #20

I couldn't imagine doing something like this in the Philippines, which I'm guessing is much like Indonesia. Nobody has credit cards to buy anything online. Credit card alternatives haven't gained traction. People use cheap alternatives to Western Union to send money. Nobody surfs the web except at internet cafes. And at internet cafes it's either FB or homework. Nobody aimlessly browses when they are dishing out mone…

It's definitely super hard, but not impossible. You should read [1] how Rocket Internet expands in developing countries: they hire their own couriers who go out, deliver and take cash at the door. This way they solve both the distribution and the payment problem. This is similar to how many of China's biggest ecommerce players operate, they all have their own distribution/payments systems. If the infrastructure doesn…

Which brings up a caveat that I didn't mention. If you want to hit the Philippines market, you probably don't need to go much further than Manila and Cebu. Manila could be among the top 5 largest cities in the world soon. Couriers could work in this case, assuming they could get through the insane traffic. But with wages so low here, you could employ an army of them.

Re: I returned home from Silicon Valley and built a failed startup

#27

Post by skewart »

aherlambang wrote: post #16
seibelj wrote: post #14

Earlier quoted context omitted.

Yes I understand the thought process, but as you wrote in detail, it was a failed model. The benefits to being an aggregator (lack of stock and shipping headaches) is far outweighed by the negatives (lack of control, competition, lack of loyalty, little money). If you were building a shopping platform, and getting loyalty, perhaps you should have just sold the items yourself. The experience would have been much bette…

So any successful aggregators out there? I think the closest one seemed to be pinterest

There are lots of successful aggregators: NerdWallet and Credit Karma for credit cards and financial products, all the different car shopping sites, also Trulia/Zillow for real estate.

All of those companies have a clear value proposition for buyers (one place where you can get information instead of lots of scattered websites that might or might not be helpful). They also tend to have strategically strong customer acquisition channels that give them some degree of leverage with sellers (i.e. they can say, do what we want or else we'll stop passing buyers through to you).

Re: I returned home from Silicon Valley and built a failed startup

#28

Post by eterm »

skewart wrote: post #27
aherlambang wrote: post #16

Earlier quoted context omitted.

So any successful aggregators out there? I think the closest one seemed to be pinterest

There are lots of successful aggregators: NerdWallet and Credit Karma for credit cards and financial products, all the different car shopping sites, also Trulia/Zillow for real estate. All of those companies have a clear value proposition for buyers (one place where you can get information instead of lots of scattered websites that might or might not be helpful). They also tend to have strategically strong customer a…

I think it's interesting you mention real estate and cars, neither of which are impulse buys.

Aggregation makes sense in markets where the buyer knows that they have to buy, but don't know what/which/where to buy, but seems to do worse in markets where purchasing is done on impulse.

Re: I returned home from Silicon Valley and built a failed startup

#29

Post by isoos »

eterm wrote: post #21
kaitai wrote: post #11

I am a bit surprised that the article doesn't have any introspection about knowing the market (or not). It seems like the reasoning was: we want some money; women have money; women buy clothes; let's do fashion. It doesn't seem like there was much of a value proposition for the customer. Maybe the customer likes browsing Instagram. Maybe the customer asks all these questions (stupid questions as well as clarifying qu…

I think people really underestimate the value add from "easy, free returns" for clothes shopping. I remember using ASOS 10 years ago and at that time most online retailers had poor returns policies. (Legally all must have a 14 day returns), but ASOS went further with free returns and even provided shipping labels and bags for returns with the original shipment. I think my then girlfriend returned maybe 70% of everyth…

My experience backs yours. While living in the Bay, my wife bought most of the clothes through Macy's online interface, and we brought them back to the stores (we kept more than 60%).

Moved out of the US, and we do miss the convenience of that kind of shopping, and would love to use similar services, even with premium.

Re: I returned home from Silicon Valley and built a failed startup

#30

Post by skewart »

gexla wrote: post #20

I couldn't imagine doing something like this in the Philippines, which I'm guessing is much like Indonesia. Nobody has credit cards to buy anything online. Credit card alternatives haven't gained traction. People use cheap alternatives to Western Union to send money. Nobody surfs the web except at internet cafes. And at internet cafes it's either FB or homework. Nobody aimlessly browses when they are dishing out mone…

That's fascinating. Thanks for sharing.

FB and Microsoft's excitement about chatbots makes a lot more sense now.

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