How a Lack of Passion and Too Few Customers Can Kill a Business The idea for You

Question

How a Lack of Passion and Too Few Customers Can Kill a Business

The idea for YouCastr was hatched in mid-2016, during a road trip innovation Ariel Diaz, Jay

Peak and Jeff Dwyer. Throughout the ride the friends bounced business ideas off each

other. One idea stuck. How about creating a platform that people could use to provide live

commentary for sporting events? It would be fun, the friends thought for people to watch a

sporting event, like a high school football game and stream their own live commentary

across the Web.

Diaz shared the idea with Jeff Hebert a friend and within a couple of months he, Hebert,

Peak and Dwyer started building an alpha version of the site. Initially, each member of the

group kept his day job, working on the idea, which they dubbed YouCastr, on nights and

weekends. Eventually each quit their job and the four spent the next three years raising

money, opening an office, hiring people, getting YouCastr up and running and pivoting the

business. Often, start-ups iterate or pivot based on user feedback. YouCastr started as a

virtual sports bar where people could chime in audio commentary on televised sporting

events. That approach didn’t stick. It then pivoted to focusing on enabling people to provide

commentary on sporting events that weren’t televised, like high school football games. Its

final pivot was to expand beyond sports, mainly be de-emphasising the sports branding on

its Web site, by adding a few features geared more toward video producers than ordinary

sports enthusiasts. All this time, YouCastr’s revenue model called for the firm to take a

commission on the sales its site generated. Each person who used the site to provide live

commentary of a sporting event would sign up listeners who would pay a small fee to listen

to the event.

Ultimately, YouCastr didn’t work. In a blog post about YouCastr’s failure, Diaz provided five

reasons that YouCastr failed, three of which involved either a lack of passion or an absence

of customers.

First, the company ran out of money. Despite operating in a very lean manner, towards the

end there simply wasn’t enough money to continue operating. Second, the market was not

there. The underlying assumption of YouCastr’s business model is that people would pay for

audio and video commentary of sporting events that of sporting events that weren’t covered

on radio or TV. As it turned out, not enough people wanted it. YouCastr did find some narrow

markets where people would pay, such as high school sports, some boxing matches and

some mixed martial arts events. But these markets weren’t large enough to build a

sustainable company. Third, the team was ready to move on. The four cofounders started

YouCastr because they wanted to do something entrepreneurial and not because they loved

broadcasting or loved sports. They weren’t the core users of their own product. This made it

hard to sustain effort when things got tough. Fourth, they saw no light at the end of the

tunnel. They’d guessed wrong about people’s willingness to pay to listen to live broadcasts

of sporting events, and didn’t see any prospects that would change. Finally, three and half years after that car ride, it was time to call it quits. Although the founders considered

themselves to be survivors, they made the tough decision to shut things down and move on.

(Source: Adapted from Barringer, R.B. and Ireland, D.R., Entrepreneurial Successfully Launching

New Ventures, Pearson, 2017, pp. 38.)

Do you think YouCastr could have been saved? If so, how?
(15 marks)

Explanation / Answer

YouCastr could have been saved if the below points were taken care of:

1. Speed of Pivoting - The 1st pivot of broadcasting original sports content was quicker, but the choices and decisions were delayed. It took six months. There was a new story for creditors and users. There were legacy customers and online traffic flow that they were already taking care. Although iterations were faster as per new idea and target market, the pivots were slower.

2. Didn’t believe the idea
The founders wanted to do something entrepreneurial and found the market lacking for the idea. But really, was the market ready to absorb the idea? The founders weren't themselves main user of the product. As a result, the passion and dedication required to do market research and develop the performance and features mix were lacking.

3. Avoiding hiring mistakes

Even before the beta stage, they hired. This was a drain on their resources and deviation from the primary task. The hiring decision could have been taken later after the revenue might have started flowing consistently.

4. Focussing too on raising money

A company raises money with its minimum viable product when it is sure that it will earn revenues from it. The changes are minimal and the only developed further is taken care. The company or the entire group focused on fundraising then developing or iterating the product. This wasted lot of their time and effort which could have been utilized elsewhere.

5. Working on customer acquisition

A part of the team could have worked out on customer acquisition at various stages of the product development and iterations. ,

6. Lack of common purpose

With too many people, the focus of the team and ultimate purpose kept on drifting. This can be avoided if the team could have come on similar grounds.Teams could have been formed focusing on their individual work primarily and then collaborating.

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.