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.
“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
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