Ferrit’s gone bust – what a surprise.
Twitter was buzzing with the news this morning, so I imagine I’m a little slow on the uptake.
Since the launch of Ferrit a couple of years ago, the generally accepted wisdom in the NZ tech community is that the site didn’t stand a chance. I’m still not 100% sure what they even do, other than aggregate products from various shops in one place. Lance, as always has all the stats and details behind it, but I thought I’d add my two cents:
Startups and corporates are two VERY different things.
Telecom is one of NZ’s biggest companies and from day one they went against almost every normal technique to nurture a startup into profitability. To name a few:
- They spent a FORTUNE on advertising
- They made their business hard to understand (I went there once and gave up when I felt stupid because I didn’t ‘get’ it
- Their value proposition was kind of unclear – I’m still not sure why I’d go there over going to a store directly
We always hear about the necessity of entrepreneurs to leave their startups behind when they reach a certain stage. At that stage the skillset needed for success is entirely different. Apparently it works in reverse too. It must be hard to think small and simple when you are part of a massive complex corporate.
Balance your spending with your income
Yes, when you start out, your expenses WILL be above your income, but lets keep things in proportion. I’ve seen this exact problem before – money thrown continuously at a product that doesn’t make enough to justify it. I’m not sure what the strategy is behind this because I can’t think of any that make sense other than a lack of confidence in the strategy of the company and the desire for money to fix everything.
The Ferrit ads were stupid. They appealed only to the likes of my mother who doesn’t DO internet shopping. So the money was probably wasted anyway, but also made them the laughing stock of the very people who should have been their core initial customer base – techies and raked up expenses that ensured it would take years to even break even.
Listen to advice
I’m not sure who was giving advice to the CEO of Ferrit, but I am yet to read an article (from the past few years) from a NZ tech expert raving about the probability of Ferrit’s success.
Most of the advice was actually pretty relevent and most people tended to agree. However all I’ve heard from the Ferrit end is that the company was performing as planned… Which may well have been the problem.
Telecom may be a large company but it doesn’t meant they know this stuff. I think this was their first foray into the internet world. They would have been a lot more successful if they followed the strategy I’ve since seen another corporate take and gather as many movers and shakers in the web community around them to pump for advice.
Admit failure and move on
I was pointed to an article on Ireland’s current economic woes the other day. The guy who wrote it was very smart. He openly talked about what Ireland is doing wrong and ways to improve it.
New Zealand is similar in size to Ireland, we need to learn to accept when we have done stuff wrong and how to improve, if we have any chance of becoming more internationally competitive. When a website fails, after years of people questioning its validity, the worst and most pathetic excuse is
“The Recession did it.”
It’s not an excuse, but it gives us an excuse for mediocrity.
Imagine if Ferrit came out and gave us a list of what they did wrong. It would never happen ( I suppose that’s the role of the rest of us), but maybe the attitude of cover bums at all costs is one we need to change.
Yes it is embarrassing, but the web is still in it’s relative infancy. You will be forgiven for getting it wrong, but the mistakes are what we all learn from.