Shut Down: February 2010
Founders: Rob Johnson, Josh Fraser
EventVue started off as a private social network for conferences helping attendees network for more effectively. They pivoted twice, once to focus on a widget that would drive attendees to conferences and then again to turn EventVue into an application that promised to be “the best way experience and discuss shared events in realtime” (essentially realtime conversations for events).
Several months after the second, EventVue decided to shut down after not seeing enough traction from their new product. The founders wrote a blog post post-morten accompanying their shutdown announcement with a short history of EventVue and the mistakes they made.
Why EventVue Failed
Given that EventVue underwent two major pivots, it could be argued that the company actually failed three times. In any case, one of the clear reasons why the company failed was because it lacked product-market fit. As co-founder Josh Fraser put it in a follow up discussion, EventVue was “a vitamin instead of a painkiller. Conference organizers typically liked our product but none of them said they needed it. It didn’t make their lives easier, make them more money or cut any of their expenses — it was just “nice to have”.
EventVue started off trying to make the conference experience better. But they found out that conference organisers didn’t really care about the quality of the experience, let alone pay for someone to improve it. As one customer bluntly put it, “If I wanted to improve the conference experience I would buy everyone steak dinners. I don’t care about the conference experience. I care about selling tickets. What can you do to help me do that?”
So EventVue pivoted in the most logical manner – find ways of marketing and driving attendees to conferences in order to cash in on affiliate payments. They did this with the EventVue Discover widget, which would let people know who else was coming to a conference. But it had the unintended consequence of actually losing money for customers. To quote Josh, “One statistic that is true for almost every event: 80% of ticket sales come in during the last 2 weeks. This meant that showing the list of people attending the event actually had the opposite effect than intended. Instead of seeing their friends that were attending, they saw that no one had registered yet and assumed the event was a dud.”
I suppose by this stage EventVue had no concrete idea how it was going to make money since its first forays had failed and its assumptions more or less proven to be wrong. They tried pivoting again, but eventually ran out of steam and money.
EventVue’s post-mortem discusses the other mistakes they made, but none were really as significant as not finding the right product-market fit. In other words, EventVue hadn’t built something enough people wanted to pay for. The other mistakes include:
- Not testing their assumptions beforehand about whether or not there was a market of paying customers for their product, and not reacting until it was too late
- Too much early focus on trying to sell a weak product without investing the time to improve it
- Not committing fully to the product pivot (for the Discover widget)
- Dubious business model – EventVue tried to pursue an enterprise sales model with a “non-recurring, small price”
- Too much push, not enough pull – EventVue wasn’t configured to allow anyone to come and use the product (i.e. no “self-serve” option)
- It’s also implied that they made bad hiring decisions
The overall lesson from EventVue is to solve a problem that people will pay money for, or perhaps on a more general level simply – build a product that people will pay for. Obviously this is easier said than done, but coupled with this key point are three more specific lessons:
- Test your assumptions and test them quickly – EventVue built a product then went out on the road trying to sell it without testing their assumptions, tweaking the product and creating something that enough people would actually pay for. By the time they realised it wasn’t going to work and pivoted, it was already probably too late.
- Keep iterating – until you have a product that has good market fit, or until you become convinced that it won’t work, or worse, run out of money.
- Understanding the customer’s needs – in EventVue’s case, their customers were the conference organisers. But EventVue started out by trying to make a product to meet the needs of the conference attendees (i.e. the customers of their customers). But they soon found out that the needs of the organisers and attendees were not necessarily aligned.
Lastly, co-founder Josh Fraser has some specific advice for startups in the social networking for events space in this follow-up post.