One thing that happened a week or so ago is that Everpix went out of business. In just two years EverPix it went from a dream to one of the world’s best solutions for managing a large library of photos. It seamlessly found and uploaded photos from your desktop and from online services and then organized them using algorithms to highlight the best ones. It attracted 55,000 users and was generating good revenue. But Everpix made a mistake that many startups make by obsessing over the look and features of the product. This meant it took them over one and a half years to have a full-featured product. This is a huge amount of time for a start up and discouraged investors. The company had focused all their resources on product development and almost nothing on marketing and advertising.
When they solicited funding they found that there are some investors who are willing to write a $100,000 check to see if the startup becomes an overnight success but it is extremely difficult to get a check for $1 million or more. The sheer explosion of opportunities has spooked the investment community. Strive Capital says investors have stepped back, they see this as a dramatic increase in risk. So despite having a rapidly increasing signup of users and receiving accolades for their technology, they could not raise the funding. They then solicited an acquisition, but without success. The lesson that the founders drew from their experience was that they spent too much time and money on the product, not enough time and money on marketing and distribution and they did not effectively position themselves. Their conclusion was that having a great product and a growing number of subscribers is not enough to guarantee success.