Startup Lumos was launched by the founders in July 2014. “Five months later, in December 2014, spending a lot of time and money of others, we woke up and realized — our product will not be sold. It was urgent to do something,” writes Yash Kotak. As entrepreneur says, both the founder of a startup were inexperienced and made a lot of mistakes when launching your own product. In his blog Kotak summarized the key milestones of the project and obstacles faced by the creators.
In July 2014, the entrepreneurs engaged in the development of smart hub with access to the Internet, which collects data about user behavior and automated operation of electronic devices in the house. The startup was called Lumos — by his own admission, Yash Kotak is a big fan of books about Harry Potter. In the same month, the company raised seed investment from a business angel. By these means the team is planning to conduct product development.
After 45 days was ready the first prototype device. “We worked like crazy — just because we were interested in doing it. The second prototype was ready for the next month. For hardware this is a very small period of time,” says the entrepreneur.
In mid-November, the team hired a designer who had to draft the final version of the product. In December, the founders were in talks with investors about raising additional Finance for output devices on the market. In December, the founders became clear that the product will be in demand. According to Passed by, the team underestimated the work that would have to be done to bring it to market, and, in addition, overestimated the demand and usefulness of the product. The creators also are unable to correctly estimate the final cost of the product.
“Hardware products are usually sold at a price 4-5 times higher than the total cost of components. How could we not know about this?”. During these three months the team several times to change the direction of a startup. The creators have abandoned the idea to create the “Internet of things”. Left the company one of the founders of.
Kotak chose five major mistakes that, in his opinion, killed the project. As recognized Yash Kotak, none of the founders of a startup have never used in my house how the “Internet of things”. In addition, none of them was involved in the development of such gadgets — and therefore could not call myself an expert in the industry.
Kotak believes that the creators of the product have become victims of the so-called effect of the Dunning-Kruger cognitive distortion in which people who are not experts in anything, make erroneous judgments and failed to realize they were wrong because of their incompetence. If the team members themselves used the subjects Internet of things, they would comprehend that their solution offers not many benefits, says Kotak. “We didnt know the market and did not understand what the competition is. We have not figured out who will become our client.
t know whether a potential client what were going to offer him. However, we do not doubt that we will be able to provide the value of the product,” says the entrepreneur. According to Kotak, many hypotheses about any device you can check without having to develop a full version of the product. Yash Kotak talks about the method of testing hypotheses, which he learned while passing acceleration program. The entrepreneur offers to write in one column all the events or hypotheses that can destroy the product and may actually give a significant boost to its development.
Thereafter, the resulting assumptions should be ranked compared to each of the probability that the founders make a mistake and the startup will fail. Then you need to start to test each hypothesis is still not the finished product — the one where the risk is higher. Kotak notes that even when entrepreneurs realized all the problems of the product, they are unable to get rid of doubts about the change strategy. The team spent on the creation of the device for a much time, money and effort, and all the staff liked the result. And none of them, says the entrepreneur, was not ready to part with their development.
Startup teams encourages all budding entrepreneurs to try in advance to accept the idea that perhaps they will have to start over and build a product from scratch. In addition, he says, is to establish in the team atmosphere of transparency — so that everyone could share his concerns and ideas. The creators of a startup trying to develop a product that would control virtually all devices in the house. TV, fridge, oven, water heater and so on. The functionality of the device in this case was not limited to control — he was also supposed to help the user save energy.
To implement all this, it would take a lot of money. As noted by Kotak, the founders of any startups limited resources and time. “It is best to identify a problem and try to solve it at the proper level. Do not try to solve all the problems — it will not work”. “Building a successful startup is very difficult.
Building a successful hardware startup is ten times more complicated,” says Kotak Yash. He notes that the development of the prototype is the simplest part of the job. The real problems start when it comes to design, marketing, production and distribution of the product. In addition, hypothesis testing hardware takes significantly more time, and investors invest in such companies with less hunting.
They need a guarantee that the device will be in demand. Now the team of a startup working on a new project — a service for professionals in the it industry where they can communicate and work together to tackle the issues. Yash Kotak believes that this project will help budding entrepreneurs to avoid many of the mistakes that have made the creators of Lumos.