Honestly, a Startup is surprised at its failure because it couldn't crack the business model?

I read this GigaOm post on a startup shutting its doors.

Chris “moot” Poole pens an honest goodbye to his failed startup, DrawQuest



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Chris Poole’s big post-4chan startup, DrawQuest, is shutting down, and his fair, graceful blog post should be required reading for all startup CEOs.

After four years and one big strategy shift, Christopher “moot” Poole’s big venture after 4Chan, DrawQuest, is shuttering its doors. Poole honestly detailed the experience in a blog post on the matter, which discusses the failure that came despite a relatively healthy community that the “draw a day” app created:

What was funny is the founder made this point.

“It may seem surprising that a seemingly successful product could fail, but it happens all the time,” Pool said. “Although we arguably found product/market fit, we couldn’t quite crack the business side of things.”

Here is a post on advice to startups that focuses on the business model with a nice explanation of the equation to solve.  If you don’t have a business model that works then you will no survive and your product is not successful in the eyes of the business owners.

The Essence of a Business Model

As outlined in the Business Models introduction, a simple way to focus on what matters in your business model is look at these two questions:

  • Can you find a scalable way to acquire customers
  • Can you then monetize those customers at a significantly higher level than your cost of acquisition

Thinking about things in such simple terms can be very helpful. I have also developed two “rules” around the business model, which are less hard and fast “rules, but more guidelines. These are outlined below:

Luckily I figured out the business model problem 5 years ago and have told my business partners that the #1 thing we will do is be innovative in developing business models.  We will do business different than others and then fit the technology.