FAİLED STARTUPS

 

50 Lessons From 50 Failed Startups And Their Mistakes

We wanted to share with you the article 50 Unsuccessful Startups and 50 Lessons to Be Taken From Mistakes by Emre Dalkılıç, Turkey Analyst from Classified Research Company, in Turkishtime magazine.

Those that were founded with large sums of money, that were founded by university students, that Sabancı and Doğuş started their own startups, and those that were brought to life by spending the main capital, Common points: They did not succeed. Although failure in Turkey is a source of shame, failure in many countries of the world is not a source of shame for the entrepreneur. Failure stories are told so that new entrepreneurs can learn from their mistakes… Here are the lessons of Turkey…

We can say that entrepreneurship has been a part of life in Turkey since 2010. Especially startups and internet entrepreneurship coincided with this period. The spree of online shopping progressed rapidly during this period. As a result of the research, nearly 200 sites were established in 2010. Again, according to the results of the researches, it is estimated that 500 sites have been closed since 2000 compared to previous years.

The situation is not very different around the world. It is estimated that 9 out of every 10 startups founded in 2010 fail. It is known that 4 out of every 5 enterprises in Turkey go bankrupt after five years. It is also known that one out of every five enterprises did not see their first year. In Turkey, there are many entrepreneurs who say "I didn't go bankrupt" even though they are not active because it is a shameful situation in cases where closing a shop or attempting fails.

Research in the world shows that the most common reason for startups to fail is that the market does not need that product. This is why 42 percent of startups that shut down go bankrupt. The situation is not different in Turkey. On the other hand, when a startup starts to make a profit, dozens of new startups are investing in the same field. Profit margins are falling and deadly competition ensues. According to Serkan Ünsal, this phenomenon is another of the main reasons for startups to close in Turkey. Ünsal lists other reasons as follows: Not being able to find the right business model quickly, establishing the right team, not finding the right partners, and analyzing the market and the customer correctly… Nearly a thousand websites or mobile phone applications in Turkey only in the last 10 years, the reasons listed above because it was closed.

FAİLED STARTUPS

1- Tazedirekt.com

It was not just a website, but an enterprise with a lot of effort and cost in the background, from shipping to production. The closure of Tazedirekt.com, which has managed to become Turkey's 'love brand' in a short time, has been one of the issues that have been discussed for days, especially in the internet sector. Investor Hasan Aslanoba had to make a statement about the reasons for this decision, after a petition was organized to reopen the site. He stated that they have achieved an average monthly growth of 30 percent in the last five months and that their net turnover in January 2016 is over 2 million TL, but their nominal TL loss is too high. Stating that he even takes the risk of making a loss for four to five years in order to achieve profitability, Aslanoba stated that a large gap has started to form between the loss they have budgeted and the actual loss, and that different scenarios have been worked on the profit/loss statements in order not to close it, but he has not been able to find a way out.

The biggest feature that distinguishes Tazedirekt.com from other startups was that it was much more than just software and a team of three or five people. According to Aslanoba, another reason for the closure of Tazedirekt.com was the excessive scrap-waste in the vegetable-fruit category at the order preparation center and the dramatic decrease in product margins. In addition, on the distribution side, seven to eight solid scales were needed to reduce unit costs to reasonable figures.” According to Hasan Aslanoba, another reason is the failure in the selection of the top management: “The assumption that I can build a good team and be successful by leading them did not hold at all. My hit rate was quite low in the selection of some of the friends I agreed with for the top management. Unfortunately, we experienced untimely layoffs and performance problems. I was also late in making some managerial changes because of the fear of incoming calls.” It is undeniable that Aslanoba had a detailed business plan and consumer analysis when entering this business.

Lesson: The biggest lesson to be learned here is; No matter how much research and analysis you do while putting your idea into practice, the factors that develop outside of you can take your plans to a much different dimension, even if they don't always cause closure.

2 – Square Meter.com

Metrekare.com, of which Serhat Karahan is one of the founding partners, brought a different technology-oriented approach to the real estate sector. The site, which was founded on the basis of the gap in the real estate market, had also received large amounts of investment from investors such as Aslanoba Capital and Earlybird Venture. The site also promoted technology-specific applications such as Google Glass. The main reason for the closure of Metrekare.com is the insufficient research of the market. Because, it is necessary to be careful when entering a market in which sahibinden.com is the clear winner and is not preferred by individual and corporate users despite its strong rivals. It is very difficult to be successful in this market without the traffic generating power area where sahibinden.com is the strongest.

Lesson: Analyzing the advantages and disadvantages of your competitors correctly in a market will enable you to take a place in that field, even if you do not have a different feature than your competitor.

3 – Pabbuc.com

It was founded in 2005 by Serdar Yaman as Turkey's first online shoe store. The site, which received investment from Gittigidiyor.com founders Burak Divanlıoğlu and Serkan Borançılı in 2009, was very popular at that time as it was the first and only site in its field in Turkey. Although many factors are effective in the fact that things go wrong in the site where 49 people worked for a time and 19 people worked in the period when it was closed, the most important reason is the disagreement between the partners. The founder and general manager of the site, Serdar Yaman, who made a statement about the closure at that time, stated that the sales of the site were good.

He stated that they sold more than 10 thousand pairs of shoes and even 2 thousand 500 pairs of shoes were sold in the last four days before the closure. One of the reasons for the closure of startups in Turkey and other parts of the world is the disagreement between partners or founders and different visions.

The Lesson: Choosing partners and investors with a shared vision will allow you to focus your energies only on your business. it will also prevent unnecessary discussions between partners. As in this example, when investors want to exit the partnership in the venture, if you cannot find a new investor, you may have to close the company.

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4 – Vipdukkan.com

VIPDükkan, which was one of the first private shopping sites opened in 2010, closed unexpectedly at the end of its third year. VIPDükkan, which also gave television advertisements for a period, had close to 4 million members. In 2011, London-based investment fund ePlanet Capital became a partner of Vipdukkan. ePlanet Capital paid $5 million for 28 percent of Vipdukkan in the first place, and then increased its share in the company to 47.8 percent. However, the fact that the number of private shopping sites was much higher than the market could handle, forced the sites to work with low revenues and low profit margins in order to compete inevitably. Due to the decrease in revenues, disruptions in operations and especially logistics caused problems on the customer side. The fact that ePlanet Capital, which was its current investors at that time, did not want to invest and could not find new partners, brought the end of VIPDükkan. Oğuz Şenol, one of the founders of VIPDükkan, indicated that many companies in the private shopping market at that time were in a similar situation and that they were able to survive with the investments and debts received continuously, and gave the signal for the next period. The overgrowth of the market has caused sites to reduce their profit margins to compete and some sites to send fake products. As a result, consumers' trust in such sites has decreased. The decrease in revenue caused cargo in the operation part, disruptions in the customer service part, and the consumer's trust in such sites was shaken.

Lesson: Before entering a market that is already competitive, it is necessary to analyze well whether the market will attract new player(s) or not.

5- Futbolburada.com

Founded by Ömer Üçer in August 2012, the site set out to become a football-based news site, which, as the name suggests, is the most watched and followed sport in Turkey. On the site, which has a different understanding of news, where member users can also be writers, names such as Ali Ece, Bağış Erten and Banu Yelkovan, known to the football world, were also writing articles. In just one month, it reached important figures such as 150 authors, 450 members and 28 thousand unique visitors. The site was also planning to release the iOS and Android app. But it was closed before completing a year. Orhan Uluca, one of the employees of Futbolburada.com, in his blog post, shows that the main reason for the closure of the site is the inability to calculate the costs exactly. The reason why the site owners said that they will continue to fund this site for a few years even if we do not receive any advertisements and closed the site before the end of a year can be shown to be more costly than expected.

The Lesson: If you have a project with an advertising monetization model, you may have to sacrifice enough money to run your venture at a loss for at least a few years. Acting with the logic of what happens can cause you to waste both your time and money.

6 – Memurfoni.com

Memurfoni.com was a site that Memurlar.net, one of the most popular sites in Turkey, followed especially by those who work in the public sector or who want to enter the public sector, launched in 2011 together with the Need Group, using its brand awareness. The purpose of Memurfoni.com was to operate in the group shopping market in accordance with the fashion of the period. The reason why Memurfoni entered this field is that Memurlar.net had an advertising/promotional advantage as it was one of the local sites that received the most visitors at that time, and it had 1 million 100 thousand mail-approved members. After a period of about two years, according to General Manager Hakan Yiğit, they decided to close with 250 thousand members and a total of 75 thousand sales. The main reason for the closure of Memurfoni is that they do not conduct sufficient market research. The fact that Memurlar.net sends e-mails to its 1 million 100 thousand approved members and makes only 75,000 sales in two years, although all but 100 of them agree to receive e-mails from Memurfoni, this means that only 7 percent of registered members use Memurfoni . (Assuming they don't recruit new members). If a study had been conducted on the income level or the rates of online shopping among Memurlar.net members, maybe they would have thought twice before entering this field. The other reason is that considering that the competition in the group shopping market was intense even at the time Memurfoni.com entered, they did not do enough research on the market. In fact, in an interview given by Memurfoni project manager Mahmut Yıldırım when the site was first launched, “There are many players in the Group Shopping market. Are you afraid of competition?” given to the question; The answer “Competition is a good thing” actually shows that they know that there are many other players in the market besides themselves. Another issue is the name of Memurfoni. It is very similar to Markafoni, the first site to open the group shopping site in Turkey. This did nothing but remind me of the original site.

Lesson: No matter how strong your database is, no matter how strong your brand awareness is, when entering a different market, do not enter a market without analyzing how many players that market will remove and your consumer audience.

7 – Cinemaseans.com

Cinemaseans.com, which started out as a user-friendly cinema site free from advertising pollution, was founded in 2007 by Ender Ayna. In an interview he gave at that time, Ender Ayna summarized the purpose of the establishment of Cinemaseans.com as follows: "The main purpose of this site is to offer an alternative to moviegoers who complain about advertisement pollution and unfriendly interfaces, but who have a high cinema awareness." The site, which also covered important newspapers, became one of the most popular and followed sites of the period. On the site, users could access the director, technical team and cast information with brief summaries of the films, as well as the session information, and the site members could write comments about the films they watched, rate the films, and tag the films, allowing other users to access the films easily. Cinemaseans.com, which set out with the goal of complete user satisfaction, thought to continue with the sponsors. However, because it could not find a sponsor, the process ended with the closure of the site.

Lesson: To set out with the logic of "Let me set up the site somehow, the caravan will be on the way" is to accept losing from the beginning. Instead of acting with the logic of "what if", it is necessary to start with a well-prepared project that is firmly on the ground.

8 – Bargao.com

Bargao.com is an initiative founded by well-known names of the internet world. Among its founders are Attorney Başak Purut (Ekşi Sözlük), Serdar Kuzuloğlu (Journalist, program producer, entrepreneur), Devrim Altaylı (Buzz Founder) and Ercan Balcı (Pordiva's CTO). The site is based on the logic that users request discounts from their favorite brands. Bargao offered its users the opportunity to request discounts with five brands in 11 different categories: shoes, phones, computers, electronics, clothing, kitchen, cosmetics, mother/baby, sports, jewelry/watch and home/decoration. The biggest disadvantage of the site is that it was established at a time when group shopping sites were the busiest and in decline. Because people could download and request, then wait for enough people to form, then instead of wasting time for companies to offer discounts if they saw the demand appropriate, they could enter any of the hundreds of group shopping sites and buy the product they wanted at a discount.

Lesson: When you launch your venture, research well whether there are similar products in the market and whether the market has reached saturation point.

9 – Bazlia.com

Bazlia was a startup that described itself as a next-generation, location-based classifieds site. The site, which emerged as a result of two and a half years of development, had a highly developed system. Publishing in Turkish and English, Bazlia set out to gather almost all types of advertisements under a single site. Real estate agents, car galleries and career agencies could also open online stores on the site, which provides services in many areas such as real estate, vehicles, careers, holidays and marketplaces. On the site, where free advertisements can be posted, with the option to search via the map, advertisements in the surrounding area within a radius of 20 meters to 90 kilometers can be listed, bazPoint points and meeting places between buyers and sellers can be seen. The site, which emerged as a rival of sahibinden.com, ended its activities in 2012, after a year and a half. The biggest disadvantage of Bazlia is trying to compete in the same field with the oldest and strongest brand in the market, such as sahibinden.com. But in the long run, with enough promotion, it could play into the top three in the market. Considering that location-based marketplace applications started to become popular after 2015, it can be said that Bazlia threw the towel early.

Lesson: It is unreasonable to expect a quick win, especially on marketplace sites. Increasing brand awareness by advertising for a few years and supporting the site by launching new products during this time is a must for marketplace sites.

10 – Whitebox.com

Beyazkutu.com, which started its service with a different understanding at a time when private shopping sites began to lose their popularity, set out with the slogan "Products not available in Turkey are at Beyazkutu.com". As written in the slogan of Beyazkutu.com, Pepe Jeans, Rock and Republic,

Many world brands such as Billabong, Camper and Aldo brought the product to Turkey.

Founded by Hamdi Külahçıoğlu and Serdar Çınar in January 2011 with a capital of 1 million TL, Beyazkutu.com also managed to receive an investment of around 1 million TL from iLab Holding in November of the same year. Unlike other group shopping sites, the site, which also sells seasonal products and products of brands not in Turkey, was purchased by Demsa Group some time before it was closed. The main reason for the closure of Beyazkutu.com was that the private shopping sites reached the saturation point and the shopping decreased due to the problems experienced by the consumers (such as the late arrival of the fake product/cargo).

11 – Butigo.com

Unlike other e-commerce sites, Butigo was a site where fashion consultants offered personalized alternatives. Founded by Berk Alevi, Gizem Yasa and Harun Güner, the site also received investment from 212 Capital Partners. The site, which was very popular among women for a period, was closed in 2014 after three years. Butigo, which has determined a single price for all products, drew attention with its different approaches to the e-commerce market, which is quite active and has a wide range of options.

Lesson: In the e-commerce sector, there are many competitors, but few profit margins. Those with a large group behind them (such as hepsiburada.com, sahibinden.com) can survive…

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12 – Doctormortgage.com

It was established in January 2009 to inform about housing loans, to compare interest and commission rates, and to receive housing loan applications.

The biggest feature that distinguishes Doktormortgage from other sites at that time was that it focused only on the mortgage system. The founder of the site, Mustafa Su, attributes the reason for the collapse of the site to two main reasons. One is the difficulty of working with institutional structures such as banks, the other is the need for capital.

The Lesson: Unless you have an idea that is very creative, turns a profit in a short time, and that no one has done before, it is imperative that you start with initial capital that will keep you going for a long time. If you don't have money, your job is difficult even if you have a good idea...

13 – Goboti.com

Goboti.com is a site established in 2010 to sell custom-designed t-shirts. It draws attention by whom the site was established rather than what it does. Founded by Sina Afra, Tolga Tatari, Ahmet Emre Sarı, one of the founders of Markafoni, Nevzat Aydın from Yemeksepeti.com and Emre Kurttepeli, the founder of Mynet, the life of the initiative did not last long. At that time, Nevzat Aydın explained the reason for the closure of the startup, founded by Turkey's most successful entrepreneurs: “We entered a period where more investment should be made. We had doubts about the return on this investment. In fact, interest and sales were going very well and there was growth potential. We had to sadly part with our staff and shut down the site.” In Turkey, there were startups selling t-shirts on the internet a few times before. All of them had to suffer the same fate. The biggest reason for this is that the t-shirts sold on the internet are mostly designed, so they are sold at high prices and the buyer group is limited.

14 – Fyonk.com

Founded by Deniz Oktar and Barış Can Daylık in May 2012, the initiative was a social gift giving application. Fyonk, the Turkish adaptation of an application known abroad, was working on Facebook. Fyonk users could send the product checks offered by the site to another person, if they wished, by adding money to the check. In the first six days of its establishment, 4,500 active users and the information of more than 300,000 people were reached. People had sent 3,500 gift cards to their friends. The sites that Fyonk collaborated with were Tchibo, Evmanya, Ebebek, Buldumbuldum, Butigo, Momento, Chocolatesepeti, Çiceksepeti, Frutation, Lilakutu and Treasure. Fyonk.com founder Deniz Oktar says, "Even though we reached a very large audience in a short time, I realized that there was something strange" and states that when they analyzed the data, they concluded that the audience was not elite.

Oktar says: “There was an audience of about 10 thousand people following all kinds of campaigns on Facebook and Twitter. They were discussing how to enter all kinds of competitions organized by many sites such as hardwarehaber and women's club. Whatever the lower limit of the gift card was, they used the least and didn't buy anything on top of it. Here, the expectation of e-commerce sites was to shop much more than the free gift certificate they gave, and even to enlarge them by paying money. At the end of the first days, it became clear that if we continued with this audience, the project would not be successful.”

The Fyonk team, which prevented this problem with their new algorithm, was stuck with Facebook's decision to give a gift business this time. In the meantime, the million-dollar Swiss Wrapp company, which implemented the social gift service for the first time all over the world, is in Turkey.

He decided to enter. Fyonk was shut down four months after it was founded, despite having thousands of users.

Lesson: Not every clone venture is suitable for Turkey. Starting a business without researching whether the Turkish internet user likes the system, or rather without doing market research, can lead to wrong results.

15 – Supercekilis.com

Supercekilis.com started out at the beginning of 2011 with the aim of being a service that gives gifts to its members in accordance with the National Lottery regulations. It was based on a system that distributed the products or services they bought from companies and brands to users by lottery. The biggest disadvantage of the site, which was closed in less than a year, can be shown as a registration form that is too long. At a time when even the largest sites in the world could be accessed with just a nickname and password, getting such detailed member registration discouraged many people.

Lesson: Simplicity is the biggest feature of the internet industry. As the example above shows, even just one registration form can undermine your entire venture.

16 – Trend.im

The emergence of around 200 opportunity sites in 2011 created opportunity tracking sites. Trend.im was one of the sites that emerged because it took a long time for users to find the most suitable opportunity among hundreds of opportunity sites. Founded by Fatih Kartal and Engin Dumlu, the site worked on the basis of a system that enabled users to find the most suitable opportunities for them by using different filters. Due to the popularity of opportunity sites at that time, opportunity tracking sites and Trend.im also started to receive a lot of visitors.

However, especially since 2012, when the market for opportunity sites reached saturation point and companies started to close one by one, this led to the closure of the sites in this lane due to the decrease in their followers.

Lesson: 200 opportunity sites are too many not only for Turkey, where the internet has just begun to develop, but also for markets such as the USA and Japan, which are among the few countries in the world in terms of population and economy.

 17 – Ilookforyou.com

“ilookforyou.com”, which means I'm looking for you, was launched in 2014 as a premium service dating site for women between the ages of 25-45. Ilookforyou was founded as a dating site targeting educated, professional women who cannot spare time for their private lives due to their occupations. The site, where you can become a member for free, also had paid membership alternatives. The site tried to be positioned more in the upper segment, with fees ranging from 199 TL per month and 499 TL per year.

The system the site used to match members was also very professional. During the membership phase, you were answering a series of questions from your favorite food to the movies you liked, from the personality traits you defined yourself to your favorite gifts.

Lesson: The main reason the site was shut down was because the market didn't need such a product. The popularity of social networking sites such as Facebook, Twitter, Instagram, Tinder is the most important reason for the closure of such a paid site. Another is that although it is a site targeting the high-income group, it charges a fee. Even an app with worldwide users like Tinder dropped its prices after a while.

Sources: Turkishtime, toptalent.co