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Well, We Failed – Wattage is shutting down

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Re: Well, We Failed – Wattage is shutting down

#131

Post by pbhjpbhj »

jeremybell wrote: post #60
solve wrote: post #41

> “Now That’s A Beautiful Pitch Deck” Reminds me of this quote: "As a designer, this is hard to admit: Extremely beautiful design is a negative warning signal for startup success. (70%+ accuracy.)" https://twitter.com/dcurtis/status/571082598920925187 So, so true. Also, I've long noticed that startups who call themselves beautiful on their front page seem 99% bound to fail. Noticeably higher failure rate.

I would tend to agree with this, but it's usually a sign that the startup has incorrectly focused their energies and money on design, instead of focusing on the underlaying business itself. In this case, I simply designed the deck myself. I'm flattered that everyone thinks it looks nice, but my intention wasn't to make something with style over substance.

On the penultimate slide, p.24, what's the relevance of the company logos? It appears to be an endorsement, in what way is that true or false. The alternative interpretation is that the 70 years of product development has been for the listed companies?

Re: Well, We Failed – Wattage is shutting down

#132

Post by nly »

downandout wrote: post #126

I'm not sure how I feel about all of these companies shutting down prematurely to return investor capital (the following example is not based on this company, but it illustrates the point). If a $50M investment actually means $10M in risk capital, and the $40M will be returned at the slightest sign of failure, then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M. Fur…

> then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M.

Either that or the valuation is inflated artificially 5 fold.

Re: Well, We Failed – Wattage is shutting down

#133

Post by downandout »

nly wrote: post #132
downandout wrote: post #126

I'm not sure how I feel about all of these companies shutting down prematurely to return investor capital (the following example is not based on this company, but it illustrates the point). If a $50M investment actually means $10M in risk capital, and the $40M will be returned at the slightest sign of failure, then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M. Fur…

> then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M. Either that or the valuation is inflated artificially 5 fold.

It's probably somewhere in the middle. In any event, entrepreneurs and later investors are clearly getting the short end of the stick here. I can imagine the conversations that lead to these capital returns..."you're failing....if you don't return capital now, you'll never get another investment from a major firm again" (that's if the investors don't negotiate enough board seats/voting rights to just return it without the founder's consent).

Re: Well, We Failed – Wattage is shutting down

#136

Post by bandrami »

jeremybell wrote: post #97
Retric wrote: post #90

Earlier quoted context omitted.

IMO, the custom radio is not really a terrible idea; the problem was all the pictures where of the same radio with a new paint job. At least make the knobs look like chess pieces, rocket ships, airplanes, or cats etc. Then again who buys radios? Custom clocks seem far more universal and let people use a wider range of shapes.

To some extent, the initial product wasn't important. Yes, it needed to resonate with an audience, but it's sole purpose was to test the waters and prove that we could ship. We liked the radio because it was unique enough that we felt it would stand out. Instead of flipping between AM/FM stations, you'd be flipping between podcasts. I think that would have sold pretty well... or at least well enough for us to prove t…

the initial product wasn't important

Hats off to you for trying, but I'm going to file this statement under my "I'm reliving 1999 in 2015" heading...

Re: Well, We Failed – Wattage is shutting down

#137

Post by inthewoods »

tptacek wrote: post #105

That seems less like a pitch deck and more a professionally polished brochure for a product, or maybe the introductory section of a prospectus. I don't see how an investor evaluate the company in that deck; I can't see: * Go-to-market, or even a price point (did I miss it?) or COGS estimates, or a plan for distribution * Traction, up-front sales commitments, or a sketch of target customers * Competitors and substitut…

To me the issue with the deck is that it doesn't simplify the idea - it expands it over and over again until you get overwhelmed by the details of the business. That feeling of complexity, in my opinion, would leave investors feeling that the whole solution was so complex that there were too many ways to fail. Manufacturing? Marketplace? Hardware? It's too much for me - I can't imagine how an investor takes it all in and feels that the team could successfully execute on all the parts.

The best decks I've seen, in addition to everything you've brought up, also simplify the idea down.

Re: Well, We Failed – Wattage is shutting down

#138

Post by stevewilhelm »

jguimont wrote: post #83

I built the Timbuk2.com bag customizer ( http://timbuk2.com/customizer ) and I would say that 50% of their business is on the custom side. People are playing with the product and often they surprise us. Timbuk2 ends up charging a premium for the custom bag, but it a unique bag. Same applies to Nikeid or adidas or converse or ... A lot of people are trying to build custom products and let the consumer get access to th…

Two other show companies as well:

- New Balance http://www.newbalance.com/nb-custom/

- Vans http://www.vans.com/custom-shoes.html

Re: Well, We Failed – Wattage is shutting down

#139

Post by jeremybell »

downandout wrote: post #126

I'm not sure how I feel about all of these companies shutting down prematurely to return investor capital (the following example is not based on this company, but it illustrates the point). If a $50M investment actually means $10M in risk capital, and the $40M will be returned at the slightest sign of failure, then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M. Fur…

We burned through all of our investors' money, and worked until we couldn't meet payroll. Once it was clear that we were going to run out of cash, I took a job and negotiated a deal that allowed me to make our investors whole.

Re: Well, We Failed – Wattage is shutting down

#140

Post by downandout »

jeremybell wrote: post #139
downandout wrote: post #126

I'm not sure how I feel about all of these companies shutting down prematurely to return investor capital (the following example is not based on this company, but it illustrates the point). If a $50M investment actually means $10M in risk capital, and the $40M will be returned at the slightest sign of failure, then entrepreneurs are giving up far too much equity because the investor is actually only risking $10M. Fur…

We burned through all of our investors' money, and worked until we couldn't meet payroll. Once it was clear that we were going to run out of cash, I took a job and negotiated a deal that allowed me to make our investors whole.

As I said, my example didn't necessarily apply to your company. But just in the last few days I have read about 4 different startups returning capital to investors. Investors seem to be aggressively seeking the return of capital, which takes the "risk" out of "risk capital". Decreased risk should also mean decreased rewards.

If you chose to do it of your own volition, then that's a personal decision (though one I don't recommend because your investors made a calculated wager on you...sometimes wagers lose, and that's the nature of the game they have chosen to play). But if you were asked or pressured into it, they shouldn't have done that, and by doing it voluntarily, you are teaching those investors to expect it of others.

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