Deepak Vinchhi, co-founder of ninemotion shares his insights/experiences:
“The only real failure in life is the failure to try.”
nineMotion Story, The End, Learnings
We started nineMotion more than two years back. The idea was to capitalize on a fast growing SMB outsourcing market of USA & Europe. Over the first 6 to 9 months, we developed a pretty good online product with key differentiators in connecting buyers and providers of services, helping them manage their offshore engagements, minimize risks, provide collaboration, visibility and many other features. After that, we have been trying to market and sell our offerings mainly in the US over the last 15 to 18 months.
From our experiences, we realize that we almost need to take a consumer marketing approach to reach our market. This is because our target segment consists of very small businesses, and in order to build a brand recall, we have to spend marketing dollars.
Secondly, an online marketplace is a winner-take-all game. More number of sellers will attract more buyers, and that in turn will attract more sellers – this can become a self propelling growth story but only if we reach a critical mass. There is room for only one player to succeed in the end. For example, there is only one eBay in the product marketplace space although many others have spent billions of dollars over the years trying to emulate eBay.
Thirdly, the competitive landscape has changed considerably in the last 2 years. Elance has raised a total of $65 Million, Odesk has now raised $35 Million and Microsoft has entered the space. We think that Google will also enter this space very soon. This is now a business of very deep pockets.
Under the circumstances, we decided that it is better to close the business rather than continue to throw good money after bad money. This decision has nothing to do with the current economic downturn.
What we could have done differently?
The approach we took was a more or less a big bang approach of addressing the entire market breadth which is pretty big, and the approach was too ambitious. If we had executed better and succeeded, it could have set us on an interesting growth path, but obviously it hasn’t worked.
If I were to do this again, I would choose a series of micro markets and try to penetrate them one at a time with deeper domain centric user experience. Even today, there are opportunities of working on such markets, but both I and my co-founder (Bala) have no appetite and energy to work on such opportunities any more.
Key lessons that can apply to other startups
If I were to distill some of the key lessons that can apply to most startup, they would be as follows:
- Even if the market is huge, it is better to cover it in a step by step manner – a small segment at a time. There are numerous examples of this from the past, but we ended up making the same mistake
- Make constant incremental progress in penetrating your market over a long period of time – one customer at a time – rather than banking on big bang marketing or PR
- Try out many different things that are broadly in your defined space in terms of product features, target audience, marketing and sales, etc. You never know what works or what may provide you with a significant leverage
- Build business for cash flow. There is no substitute for cash generated from the business
- If you are able to raise capital, raise it as early as possible and as much as possible – doesn’t matter at what cost. This gives you time to try out more approaches and a longer runway before take off
Wishing Deepak and Bala best of luck for their next venture.