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Well, We Failed – Wattage is shutting down

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Re: Well, We Failed – Wattage is shutting down

#121

Post by jnbiche »

smackfu wrote: post #81
ryanSrich wrote: post #38

Earlier quoted context omitted.

Right? I see this a lot and it's often an investors first response when asking for small seed rounds: "Well have you considered raising money internally? Ask around your friends and family". If I had friends and family that could just toss me a $250k I don't think I'd be in this position.

But they have to ask, because if the answer is no, that's a huge red flag. "You are willing to lose my money, but not your friends or family?"

If this is true, then I'm even more wary of ever seeking VC money than I was before. No way in hell I'm asking my middle-class and lower-middle class family members to support risky venture X. That's the job of the wealthy venture capitalist, who can afford to lose X dollars on my venture (that's the whole rationale behind the "accredited investor" thing, as much as I disagree with the regulation).

If they expect someone else to do their job, I wouldn't want anything to do with them, anyway.

"You are willing to lose my money, but not your friends or family?"

"Yes. Because if I asked my family to fund a business venture, it would be something bland, low-risk, and low-return. Exactly the kind of things you guys can't stand funding."

Re: Well, We Failed – Wattage is shutting down

#122

Post by jkestner »

pjc50 wrote: post #117
jkestner wrote: post #16

The good news is the vision of mass-customized electronics is a huge deal. The bad news is, Apple proved it in 2007-2008 with the iPhone + App Store. The points that you could've focused on a specific object are good. It would've made you think like your intended customer, the designer. You would've been forced to answer the question "Who wants this?" instead of planning layers of abstraction. You should've taken a s…

? The iPhone is less customisable hardware than the old Nokia candy bar phones.

The customization people actually want is met by the software layer. With a responsive touch screen and apps, you can satisfactorily reproduce physical interfaces, and more importantly, their functions.

Re: Well, We Failed – Wattage is shutting down

#124

Post by patmcc »

smackfu wrote: post #81
ryanSrich wrote: post #38

Earlier quoted context omitted.

Right? I see this a lot and it's often an investors first response when asking for small seed rounds: "Well have you considered raising money internally? Ask around your friends and family". If I had friends and family that could just toss me a $250k I don't think I'd be in this position.

But they have to ask, because if the answer is no, that's a huge red flag. "You are willing to lose my money, but not your friends or family?"

An investor should be willing to make a "10% chance for a 100X return" type investment, but no, I wouldn't usually suggest that to my friends and family unless the amount of money was not significant to them. I don't think that's a red flag; investors have different risk tolerances for good reasons.

Re: Well, We Failed – Wattage is shutting down

#125

Post by orionblastar »

As part of a business plan you have to research your target market. I highly doubt the average person wants to customize their own electronics, much less a radio in the 21st century were people have smart phones with music streaming apps.

Hardware is hard to sell, look at the OUYA project and how it is struggling and trying to sell itself to save itself. They too had quality issues, they too raised a lot of money but had a hard time selling units. Most people just play video games on their smart phones these days, they don't need to buy a video game console that runs Android.

Good research and a good business plan would have saved them from these mistakes. Instead of making a radio, maybe they could have made wireless Bluetooth speakers for smart phones to play music in the house/apartment for the average person. I'm sure that would have sold better than an AM/FM radio.

Re: Well, We Failed – Wattage is shutting down

#126

Post by downandout »

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. Further, the signal that a $50M investment sends to the market about a company is far different than that of a $10M investment.

Combine that with other things like preferred shares, and these large investments wind up being horrible for entrepreneurs, unjustly rewarding for the primary investors who are actually risking small sums in exchange for large portions of equity, and unfair for others that invest based upon what the "smart money" invested with a huge headline number.

Re: Well, We Failed – Wattage is shutting down

#127

Post by flashman »

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…

That's a really cool customizer. Good job.

Re: Well, We Failed – Wattage is shutting down

#128

Post by jakejake »

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…

Cool looking customizer - nice work! I created a super simple product customizer that allowed users to slap their logo on promotional products (similar to cafe press, but a few years before that). Even with that ridiculously limited set of options it was a challenging project, so kudos to you on the bag customizer.

Re: Well, We Failed – Wattage is shutting down

#129

Post by meric »

daenz wrote: post #51
ryanSrich wrote: post #38

Earlier quoted context omitted.

Right? I see this a lot and it's often an investors first response when asking for small seed rounds: "Well have you considered raising money internally? Ask around your friends and family". If I had friends and family that could just toss me a $250k I don't think I'd be in this position.

Reminds me of Mitt Romney's entrepreneurial advice: "Borrow money if you have to from your parents." Such a disconnect. Must be nice to have parents to be able to bankroll your businesses, Mitt.

My parents (who owned a house) offered to lend me five figures to buy a house, together with my savings I think that would have been enough to bankroll a small business. I earn more than they do these days. I think Mitt's advice is valid for middle class families who don't max out their credit to spend on cars and holidays.

Re: Well, We Failed – Wattage is shutting down

#130

Post by carrotleads »

advertising wrote: post #113

Really hard to start something you have to educate people about in the first place, before selling them. Case in point: it was not quite clear to me what they wanted to do (for a layman like myself in this space) after reading the post-mortem. I felt like I was filling in the blanks in my head and making assumptions.

This is one of our pain points as well, educating our customers/users
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