April 30, 2014
In the words of Ralph Waldo Emerson, “Our greatest glory is not in never failing, but in rising up every time we fail.” These were the final words posted on their homepage as Gui.de fell into an already inundated abyss of failed startups that include the likes of Kosmo, Widgetbox and Napster.
Founded in 2012 by Freddie Laker, Gui.de set roots in Miami with what many in the local community considered the “tech dream team” behind it. They were able to raise $2.5 million of seed funding in only two years. When the rumors of Gui.de’s troubles started to circulate, most of the community was surprised and disappointed.
Like any Shakespearean tragedy, there is a lesson to be learned in any startup fail. By looking at the rise and fall of Gui.de, perhaps other entrepreneurs can learn from their mistakes, as has the team.
Act 1 — Exposition
Gui.de was a software company that used the latest generation avatar and text-to-speech technology to turn web content into an audio-visual stream on-the-go. Basically, users were able to have a virtual news anchor of their choice.
The founder and CEO, Freddie Laker is a notable entrepreneur, with prior successful endeavors, including Internet service provider Laker.Net and the digital agency iChameleon Group. He is also the son of Sir Freddie Laker, the founder of the British airline Laker Airways. In fact, Sir Richard Branson has credited much of his success and the success of Virgin Airlines to the valuable mentorship of Sir Freddie Laker.
Laker recruited one of the country’s top female executives in the technology industry, Leslie Bradshaw, from creative agency JESS3. Bradshaw has received various industry awards including The Wall Street Journal Fins’ “Top Women in Tech Under 30.” Furthermore, he built a top-notch development team, which included Ed Toro, MIT graduate and one of Miami’s top developers, amongst others. That’s just on the top-quality team.
Gui.de was able to raise $2.5 million from investors like Sapient, The Knight Foundation, and actor Omar Epps.
In March 2013, only a few months before they closed shop, Laker attended SXSW, where Gui.de was selected as a finalist in the 2013 SXSW Accelerator Pitch Competition. The following month, Laker was selected to present at TNW Conference Europe in Amsterdam.
Act 2 – Complications
In the words of Laker himself, “Even transformative ideas need early validation.” Although Gui.de had a vision of a product that was both functional and could create an emotional connection with users, the product failed.
Tech Crunch described the avatar as “freaky” in an interview where Laker quickly responded by saying, people are “hyper-focused on the avatar technology” — when they first use it, they’ve seen with their test groups that over time, they focus less on the tech.
“In the product world there is tension between creativity and utility — a tension between temporality and longevity. We created something really cool, it used all the groundbreaking technology of the day and it wowed people. We invested heavily in the creative in the face of utility. It was a trade-off,” Bradshaw explained in an exclusive post-mortem interview with Tech Cocktail. “We really believed people would like the product. But we never validated it. We kept the product to ourselves and then launched it,” adds Bradshaw.
Act 3 — The Climax of Action.
Eric Ries, a proponent of the lean startup methodology, once said, “If you add a great user experience to a product no one wants — they will just realize faster that they don’t want it.” This was true in the case of Gui.de, where they launched and couldn’t find passionate early adopters. Instead, the company continued to build the product.
“We were trying to build three platforms at the same time: iOS, Android, and a web version. There was too much to do, and lots of money was spent on building these platforms, ” says one developer who asked to remain anonymous.
“At the end of the day, they didn’t have a product direction that was proven and had an expected revenue model that was inflated. But Freddy did not want to quit. He believed that it could be done,” he adds.
Act 4 — Falling Action.
“When we realized that the vision was not sustainable, we looked around to see what our other options were,” explained Bradshaw. “We decided to build a B2B product.”
Even after changing their strategy, which included losing the avatar, there still wasn’t any traction.
“It was the classic case of B2C focus, pivot to B2B and start monetizing too late in the game. We didn’t hit the revenue numbers every month or expected metrics,” said Bradshaw.
Act 5 — Catastrophe.
Gui.de was a great idea that didn’t convert to a successful business. “Focus on businesses where you add the most value; avoid building businesses around ideas that simply excite you,” Laker explained when Tech Cocktail interviewed him about lesssons learned.
Only a few months after Gui.de announced they were no longer in business, Tribune announced the launch of Newsbeat, a similar concept to Gui.de.
“The beauty of our industry is the meritocracy where anyone can rise to the top, but it has a humbling effect even in the greatest of men and women. And that is what it has done for me,” Leslie candidly admits.
“The reality is that I had many little different ideas or experiments, that I thought might have been businesses, over the years that I just didn’t take anywhere. Trying and failing is a very healthy part of being an entrepreneur,” explained Freddie.
It is not easy for any entrepreneur to accept failure. Laker and Bradshaw were frank and open about Gui.de’s mistakes and lessons they wanted to share from this experience. Perhaps, this is a sign of a maturing ecosystem: one that allows entrepreneurs to reflect upon failure openly.
“We just came up short this time. It was hard because Freddy and I were used to success. You can have the funding and the people, but we are susceptible to the conditions in the market,” Bradshaw went on to say.
Moral of the Story:
“The key isn’t even having more wins then losses in terms of numbers of attempts. I’d say it’s just making sure your wins exceeded your losses in dollars,” says Laker.
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