I've written about this in the past. One of the best ways to get smarter and better at something is to do frequent postmortems after bad decisions. We do it in our firm. When we screw something up, we go back and analyze why it happened, what we did wrong, and what we could have done better. It is incredibly useful.
In the history of our firm, to date we have had only one service fail and shut down. That is Wesabe. And this past week, Wesabe's founder and CEO, Marc Hedlund, did a postmortem on what went wrong. Here are some quotes from Marc's post:
I took over as CEO and led the company without a formal peer for the final two years. All that adds up to me having absolutely no one to blame for Wesabe's failure but myself, and as a result I can't now nor could ever be dispassionate in thinking about what happened.
Between the worse data aggregation method and the much higher amount of work Wesabe made you do, it was far easier to have a good experience on Mint, and that good experience came far more quickly. Everything I've mentioned -- not being dependent on a single source provider, preserving users' privacy, helping users actually make positive change in their financial lives -- all of those things are great, rational reasons to pursue what we pursued. But none of them matter if the product is harder to use, since most people simply won't care enough or get enough benefit from long-term features if a shorter-term alternative is available.
Can you succeed where we failed? Please do -- the problems are absolutely huge and the help consumers have is absolutely abysmal. Learn from the above and go help people (after making them immediately happy, first).
I selected those three quotes for reasons. The first quote is great because Marc is taking full responsibility for the company's failure. In fact, it was not entirely his failure. It was the failure of everyone who was involved including the board and investors. But one secret to good postmortems is not blaming others. When you start by blaming others, you don't get to the truth.
The second quote is the money quote. The first and most important thing about a product is making it easy to use and easy to get value right "out of the box." Wesabe did not do that very well and as a result it could not achieve its loftier goals.
The third quote is my favorite. Marc says "we didn't solve this problem" and suggests that it is still a wide open opportunity and that entrepreneurs should learn from Wesabe's mistakes and go for it. I love that and agree with it.
I do not take much satisfaction from the fact that only one service we have backed in the past seven years has failed. Either we are not taking enough risk or we are destined for more failures. I think it is the latter. And when we fail, I hope that we talk openly and honestly about the failures. It is the right thing to do.
I applaud Marc's courage and honesty in writing this post. I encouraged him to do it a while back and he did it. Bravo Marc.