I've interviewed quite a few CEOs who drove their companies into the ground. Usually, to hear them tell it, it's anybody's fault but their own. The company died because the market tanked, a competitor was unscrupulous, new laws screwed them...anything except "I made mistakes."
So it was refreshing to read Wesabe co-founder Marc Hedlund's frank analysis of why his personal-finance Web site lost the race for that space and closed this summer, while rival Mint.com was bought by Intuit last month for a reported $170 million.
His tips may help many another dot-com startup avoid Wesabe's fate. Here's what he learned.
- Being the first mover isn't everything. Though popular rumor had it that Mint started first, in fact Wesabe launched 10 months earlier. Waiting allowed Mint's team to analyze where Wesabe fell short and design a better offering.
- Choose your name carefully. Wesabe went with a goofy name in hopes it might be the next Yahoo! or Google. But Mint's far more intuitive name attracted more visitors, and browsers had no idea what Wesabe was about based on the name.
- Earning revenue does not equal success. Wesabe was generating money from late 2008 on -- it just wasn't enough money to sustain the business.
- Going viral isn't necessary. Neither Wesabe nor Mint had explosive visitor growth, and since its acquisition, Mint's has gone up and down. Total traffic matters, though, and Mint ultimately attracted five times the visitors of Wesabe, he reports.
- Make the user experience easy. Hedlund gives himself 40 lashes for not jumping on Yodlee, a technology that makes it easy for consumers to pull together their financial data. Wesabe's system was harder to use as a result, driving customers interested in personal finance into the arms of Yodlee-enabled Mint.
- Get noticed. Mint garnered buzz by winning the first TechCrunch 40 conference. From there on, it was like Wesabe didn't exist in the minds of key influencers, and the company faded from view.
The bottom line, Hedlund concludes, is it "all adds up to me having absolutely no one to blame for Wesabe's failure but myself." He's probably not cut out for politics, which is the world of "never apologize, never explain." But his willingness to honestly analyze his mistakes at Wesabe could lay the groundwork for his next startup to succeed.
Have you had a company go bust? If so, what did you learn? Leave a comment and tell us about it.