Startups Fail

With so much attention to the glory of the acquisition, a lot of startup junkies (myself included) don’t realize how many startups fail. Flat on face, 2 days to get out of your office space, fail. Startups are really hard. Startups fail, a lot.  It sucks for investors, it sucks for founders, it sucks for users, it sucks for employees.  Fail. Fail. Suck. Suck. Blah.

In the last week 3 local startups I love bellied up. Good people, strong business models, and brilliant marketing, and still, no tomorrow for them.  Nau, Organica and Falling Fruit.  A clothing line, coffee shop and audio production company.  Seems like startups are bellying up at a rapid pace this week.  If you look at the front page for Read Write Web now, there are 2 startups in the deadpool: News Alloy and Omnidrive, a year ago hot startups, are now no more.

I just got back from a firesale at my favorite clothing shop in the world, Nau.  They had it all for me, sustainable clothing that fit well and a friendly shopping experience.  I told everyone I knew about them, I really loved them.  Yesterday, their 5 stores were told they were going out of business (about 24 hours prior to this post), and tomorrow is their last day open for business.  That shows you how fast things can move.

What is weird to me about Nau, is that (this information is from the employees) they were meeting their sales goals.  They were being written up in almost every major national publication.  Their design was amazing, their marketing was fantastic and their stores engaged and inspired.  But somehow, something happened.  They closed up shop.  An employee Niel Robertson wrote his thoughts on the matter.

I would love to know the behind the scenes take on what happened to it.  There was an investor only call this morning, I would have loved to listen in.  I can only imagine what was said. Perhaps it was the economy scare, perhaps it was some competition or perhaps it was something that isn’t public yet

A classic startup move is to make mistakes. A startup mantra I hate is “you learn more from your failures than from your successes.” I think you make the same mistakes from your successes, you just made the right adjustment.  And there is that ‘luck’ thing people tell you about.  These startups pulled out at the right time, perhaps, but they are viewed as failures to the investors, founder, customers or employees.

What is tragic about this is that there is a sense of shame in regard to this, and founders tend to keep quiet about. If you look at the Organica blog or website, it is like nothing has happened.  Falling Fruit just has a witty post at the bottom of the page (linking to a full post).  Nau has a sincere letter and a big sale.

But where did these startups go wrong?  What can be learned from their experiences?  Why is it so horrible to fail?  Paul Berberian wrote a brilliant post on his latest startup, which if you have not read, it is a must read.  I would love to read more ‘classic’ posts.

This will be something I continue to be fascinated by, the public reason for closing and the actual reason for closing.  I will look into Nau as much as I can as an outsider, and would love to know what went wrong with such a great startup.