How 3 Startups Raised Millions and Lost it All - A Case Study for Entrepreneurs

Before we move on to this week's

case

study

, there is something that is very important that goes beyond the

case

studies and directly affects you and me and that is what happened with Hurricane Harvey on the south coast from Houston to Corpus Christi. It's just devastating, it breaks your heart to see. what's going on there and it's part of a company that Pat and I are also part of the people helping people this week are people helping Houston so look for people helping Houston on GoFundMe and give Whatever they can, we will direct that money directly to a help center. organization that has the ability to bring supplies to those who need them most remember the need continues even after the waters recede children need backpacks and clothes to go back to school and they live in a hotel because their apartments were devastated when they were young the People need a refrigerator in their new apartment everywhere they go, there are so many needs that it will continue to work long after the airports are open and Houston seems to be back to normal, there will be a lot of people who will be there, so please go. to the people who help Houston and GoFundMe and give what they can, one hundred percent of the profits accept the GoFundMe fee and the credit card fee, but one hundred percent goes to those agencies, it will help them, thanks for watching here at Value tainment and PHP Agency we care welcome back to the case studies with the business paper and you know everyone has been asking about examples of companies that didn't make it and why so this one This week we're going to fast forward with three of them that are not related to each other in terms of product or category, but they are all related to each other in the sense that it didn't go well and there is a lesson that you and I can learn, so Let's analyze them and I hope you learn something and I leave you something better.

I found it number one, a pretty good idea, BP, it was like a sort of used car brokerage site where they would take your used car on consignment, fix it up a little bit, now they wouldn't change the tire brakes, but yeah. You would make it look as good as possible in its current condition and they would broker the sale for you and then you would get the money for it; a fee, it was a pretty good idea and I think it helps people who are busy selling their car. I think if you could see the venture capitalists and other people getting involved, which they did in 2014, 2014 they

raised

1.25 seed money and look, 2014 was spent raising money, then they had five million, part of the year, six million , then twelve, seven holy moly and then in mid-2015 they

raised

another 70 million, 149 and then everything came to a screeching halt, came to a screeching halt, good for used cars, isn't it in 2016 where they have what I I called the round of oxygen, which gives me enough to take? the assets of this thing in the software and sell it to something else and then God rest him, he saw Huerta in 2017, they left after having a valuation of 560 million dollars, so those are the dollars, but what happened in the way, why not?

If it works, busy people, I could see them saying, "Hey, take my car, fix it, detail it, I'll pay for it, whatever it is, and then you come back with a check for me. My car is sold, it looks like it would work, except like" . uber and other things, you have to keep expanding from city to city, so that's an operation in each city, you can't just send your car to the ground enough to do that, when they actually touch the physical car, they have to do it in clean cities, so they had to expand and part of what happened, they had kind of a rough growth plan and along the way, as happens with

entrepreneurs

, here's that word again, one of the business doctor's favorite words , arrogance, you have all this money and sometimes it's other people's money. you don't think of it as yours, like you're selling a Volkswagen Beetle for $3,500 at 26 miles per gallon, but you bought a $10,000 couch for the office that gets zero miles per gallon and that's the only thing in common. is that you can screw Beeble's back and screw a couch, that's all they have in common, meanwhile this is just bad money management and it's other people's money and your growth plan goes from city to city and that's why their growth plan falls apart.

They were full of arrogance and mismanaged a very good amount of money, you looked at this, they could have gotten up to 20 or 30 cities with a good deal with that amount of money, but it didn't happen, so it's a good and interesting idea that maybe it could have had some legs or wheels in its head, it fails to move forward number two number two let's go to Jusuru and this is actually one of my favorites because it falls into the big file what are you thinking? and I have a special file that I love and it's all these things in life what were you thinking about what were you thinking about you and I know what all that jusuru is for tons of pressure generated by a small juicer to squeeze the fruit and they would sell you the bag of fruit that We will send to you so that you receive these bags of fruit for five to eight dollars.

Put them at what four hundred, let's see, first of all, it was a $700. Andrew, help me here with seven hundred dollars for model one, right? Yes, seven. a hundred dollars to put five to seven dollars with a fruit in it, but wait, wait, wait, wait, let's back up a second, seven hundred dollars for model one, that's what she said, it wasn't Andrew, yeah, it wasn't what you said, so seven hundred. dollars for model one and oh by the way it had to be connected to the internet so it could understand that the juice product you just bought was within its expiration date and what you were putting in the number that was on the juice bag Actually, you know, it was still fresh, but still seven hundred dollars for this thing that supposedly made four tons.

There's only one word for that, damn, that's just excessive and it said it generated four tons of pressure. That's good marketing. You better answer a question when My daughter was little, she could squeeze a grape like that and she could turn a banana into a gelatinous substance in six seconds and I'm pretty sure she wasn't generating four tons of pressure on her one year old little hand like that. what i think The ad generates four tons of pressure. I think I was out there and something really funny happened too. I think it was a Bloomberg reporter.

I'm right? The Bloomberg reporter orders a bag and mails it. He holds it over a glass. He takes everything. fruit squeeze squeeze squeeze squeeze and the glass and say hey that's really tasty and then he said to himself why do I need the $700 thing, well they hired, believe it or not, the former president of Coca-Cola because I think that we can do it if we get a little more money, I think we can do it and move on and the only thing that this had in common with coca is that at the end of the day they both had drunk liquid because coca is a beverage manufacturing company, not a hard goods or appliance manufacturing company. and they are completely different in how they do it, yet President Koch puts his name on this and comes and joins, let's take a look well, in 2013 they raised four million dollars, then sixteen and a half and then they skipped a year and They raised seventy. and sixteen, so it raised around one hundred and eighteen million dollars on a mechanical product.

It's really difficult to be in the mechanical appliance products business. They managed to get it down to $400 for the model 2 or whatever they call it and they're still kicking right now but I mean they're selling it for $400 so I gotta say you know man a $400 juicer when your Juice is available everywhere and now, thanks to delivery through many different things, including Uber, you can get meals. and stuff delivered directly to you so you can get a whole tray full of juice from your local juice bar by uber and so you don't need a Roo juicer to do that, so I think this was just um, I don't know.

I think it was well managed because they live a long time, but they denied what people really pay for this. I don't think it's been tested well, which leaves us talking about testing and brings us to the last yak yak. yak yak was a totally anonymous anonymous message, but it was primarily aimed at teenagers and college students, so you basically enabled harassment. UA allowed harassment after relationship breakdown. You allowed people to make bomb threats and death threats against teachers in schools, so this group of people, teenagers and young people. People who grow up wonder what they are going to do, they get angry about something.

Yik yak was the perfect tool to send an anonymous message to someone when you are completely angry, whatever the outcome, a lot of negative and bad things happen with these bomb threats. were taken seriously, people were really worried about harassing ex-boyfriends and ex-girlfriends and it didn't last long. In 2014 they raised 1.5 million, then 10, then 62, so in 2014 there were a lot of people saying what a messaging app that does this so well. it's really cool and it's anonymous Wow, how cool could that be, but the byproduct was horrible anyway, they got a valuation of up to four hundred million dollars, but then in 2017 Yik yak Mirta died out of the game.

The interesting thing is that Yik yak makes anonymous messages. No I don't know why they did it, but the logo they saw performing was a yak, that's right, a yak. ​​Now you would imagine that if you are dealing with high school and college students, your logo would be kind of naughty, but I can't understand why. You thought this was ultimately going to be good, so let's do a quick recap. Now let's see what you and I can learn from this. First of all, BP. I think from a product concept standpoint what hurt them was their growth plan and mismanagement of funds.

It was the human side, the product concept side at Jusuru, I think it comes down to that $700 model 1, $400 model 2 for a juicer and you might owe me 5 to 7 dollars with the things that I could lower and get 4. for $5, you know, a good smoothie at my favorite juice bar that I saw, but it had to be well managed because they actually advertised it. There are 400 ultra custom parts that go on this machine TechCrunch and God loves you TechCrunch I love what you said here they said they should get some kind of award for putting 400 custom parts on an overpriced appliance that no one would buy there has to be some kind of award for that and I call that like the denial award, you get an absolute denial award because if He had sat down and talked to people about what they would pay for this.

I think I would have gotten some good data and could have gone the other way with this Yik yak. ​​I think it's wrong and someone should have sat there and said, "Wait a minute." minute, the unintended consequences and everything that could happen here are just amazing, but I think to create messaging apps that are scalable and that don't crash, I think you have to be smart, so on the human side I'm just saying, hey, it was smart and misdirected genius because if you can build something like that at that kind of scale, those are complicated systems and you know, kudos to the engineering team, but putting it to work this way 9nn, I know, there are three examples this week of failure because I guess you guys like watching failures, I could watch you all on YouTube, probably watching all those failures like on the trampoline because everyone, I can't want to see more failures, I want to know how you failed and why you failed, so there's three for this week and speaking of failure I need the pillow that never fails value tainment the channel that never stops delivering fantastic business content for everyone on the Internet is the number one channel for exactly that until next time I'm Tommy Lasorda I hope I left you better than what did you find