Lessons Learned From Failed Business Model Innovations

After selling Ampush (200+ employees, $30M revenue), I thought I knew how to spot winning businesses. Then I launched 6 startups in 2 years: • 2 failed completely • 1 barely survived • 2 hit 8 figures That experience forced me to rethink everything I believed about business. Here’s how one brutal realization changed my approach forever. ↓ Let me tell you about two businesses I started during that time: 1. Kahani: On paper, it was a cutting-edge idea. We built a tool to make e-commerce websites feel like TikTok or Instagram. Slick, innovative, and totally “of the moment.” But adoption was painfully slow. Customers weren’t lining up to use it. Worse, the few that tried it didn’t stick around. Despite countless pivots and a lot of hope, Kahani ultimately shut down. 2. GrowthAssistant: In stark contrast, GrowthAssistant offers offshore marketing talent to overburdened teams. No fancy tech, no groundbreaking innovation. A straightforward solution to a problem people were desperate to solve. Within months, it was thriving. Today, it’s an eight-figure business growing rapidly. The turning point: We took both Kahani and Growth Assistant to Shoptalk, a massive trade show for retail and e-commerce. Each company sent one salesperson. When the dust settled, the numbers didn’t lie: • Growth Assistant secured 25 meetings • Kahani got... 5 Sitting there with the data in my hands, I couldn’t lie to myself anymore. Cool ideas don’t matter unless they solve urgent, painful problems. I had been building ideas I wanted to work on, not ideas the market demanded. I had to make a big change. Here’s the framework I built from that failure: 1. Start with demand Before building anything, we now test the market. For GrowthAssistant, I sent emails to my network pitching the concept. When I got immediate interest (and even pre-sales), I knew we had something. 2. Fail fast, intentionally If something’s going to flop, I want to know as quickly and cheaply as possible. We launch small bets, give them a timeline, and shut them down ruthlessly if they don’t gain traction. 3. Be brutally honest At Shoptalk, I could’ve blamed the market, timing, or execution for Kahani’s lack of success. But deep down, I knew the problem was that we hadn’t validated demand. Accepting that lets us double down on winners like GrowthAssistant. Failure is inevitable, but it’s also the best teacher. That’s why I believe every founder needs to develop a sharp instinct for identifying product-market fit. And have the courage to admit when it isn’t there. The market will tell you the truth, you just have to be willing to listen.

I was deeply disappointed to see the news that meati™, a mycelium protein company, is preparing to sell its business for $4 million in a “fire sale” process, which is a substantial discount to the roughly $450 million it raised. I first encountered Meati over 5 years ago when I got to taste its breaded chicken sandwich with Tyler Huggins, the company's co-founder, which I thought was the best future protein that I had eaten at that time. I was not the only one who thought that Meati was a premium product in the future protein sector as the company gained market traction with consumers at Whole Foods and other retailers. The reason that Meati ended in a fire sale, which is a similar story to other FoodTech companies, is that they raised too much capital at too high a valuation and failed to execute on their business plan. Although Meati had initial success with its products, it seems that its eyes were bigger than its customers’ stomachs, leading it to overbuild its production capabilities far in excess of product demand. In assessing the Meati situation, there are two key business-model questions that need to be discussed: 1)     Should companies pursue B-to-C or B-to-B business models? This is a tough question and the answer will differ for each company. However, I think many companies underestimate how challenging it is to take a new product to market, likely because of the initial success achieved by Beyond Meat and Impossible Foods following their launches at grocery stores at the beginning of this decade. 2)     Should companies build their own production capabilities or outsource production to a CMO or CDMO? Many companies believe that there is value to proprietary production, rather than outsourcing, due to cost or complexity. However, today, capital efficiency seems to be paramount, and figuring how to achieve commercial scale using less capital is essential. While many of Meati’s issues can be linked to its overbuild and/or B-to-C strategy, the company also had bad luck in late February, when its lender swept away two-thirds of its cash reserves due to a technical default relating to a breach of financial covenants. This should be a teachable moment for many entrepreneurs who treat debt, typically venture debt, as “free” money. However, the reality is that for companies which are not cash-flow positive, taking on debt can be very dangerous, unless they are 100% sure that their investors will pay off the debt, either when the debt needs to be refinanced or if a default occurs. Meati will not be the last FoodTech company that goes bankrupt in the near term, but hopefully, other companies can learn from its experience and not make the same mistakes. https://lnkd.in/gb7zbFZt #foodtech; #mycelium; #alternativeproteins EcoTech Capital Cy Obert

After 10y in innovation and 1,000+ products, here are 9 hard lessons I wish someone told me earlier: There’s a lot of bad advice out there, and it took me years to unlearn the wrong things and trust what actually works: 1. Great marketing won’t save a mediocre product. In the early days of our agency, I believed strong copy, visuals, and strategy could sell anything. I was wrong. If the product doesn’t solve a real need, it won’t go anywhere—no matter how good the marketing is. 2. Founder bias killed more products than lack of funding. I’ve seen founders and product managers ignore every warning sign because they were too in love with their idea. One even put their house on the line—it ended badly... When you're not listening to signals, disaster usually follows. That doesn’t mean you should blindly follow the data... But you need the right balance between the direction you go and data you can rely on. 3. Listening to the wrong people is worse than not conducting any research. Everybody has an opinion. It's easy to give one. Too many teams gather feedback from people who will never buy the product. It leads to the wrong conclusions—and the wrong product. 4. Liking ≠ Buying. A Fortune 500 company once showed us glowing survey results. 75% of respondents liked version A. But when tested, buyers chose a bulkier (and more expensive) version B. Why? It solved their real problem, not just looked great. 5. Your future customers can be your best team. We’ve seen early customers invest hours giving feedback... for free. Surprisingly, very few utilize this precious opportunity. If you involve them early, they don’t just validate your idea—they help shape it. 6. Positioning matters. Buyers often latch onto features you didn’t think mattered. When you talk to real buyers, you uncover angles that resonate—and reposition accordingly. 7. Perfect product-market fit can vanish with one price change. Price isn’t just a number—it’s part of your value proposition. We’ve seen amazing concepts fall apart after price increases. Every price point is a new hypothesis that needs testing. 8. Virality ≠ Sales. One product we worked on got 20M organic views on TikTok… It ended up doing under $100K in sales. The audience loved the cute dog accessory. But love didn’t convert to purchases. 9. Not all products are scalable—and that’s okay. Some ideas aren’t meant for mass-market adoption, but they can still become highly profitable businesses. You can learn it at an earlier stage. If only a small group shows interest, but their purchase intent is strong, that’s a clear signal that you have a niche winner. The biggest lesson? Ignore your ego and convictions—trust the signals. I’ve been so sure about concepts I thought would be bestsellers. Most failed... because I refused to look at the data and believed in a miracle. 🤔 ________________________________ P.S. I wish I had Prelaunch.com 10 years ago. It would’ve saved me tons of time and wasted energy.

Let me share how I burned $200K learning what actually works in business: The expensive lessons: 1. The "Follow Your Passion" Trap What I did: • Built what I loved • Ignored market needs • Focused on tech beauty • Burned through savings Reality check: • Market doesn't care about passion • Customers want solutions • Revenue beats dreams • Survival needs cash 2. The "MVP" Disaster My mistake: • Over-engineered everything • Added "cool" features • Chased perfection • Delayed launch What actually worked: • Ugly solutions that made money • Basic tech that solved problems • Simple tools that worked • Fast implementations that paid 3. The "AI Will Save Us" Delusion Burned money on: • AI capabilities • ML models • Smart features • Advanced tech What succeeded: • Excel sheets • Basic automation • Simple workflows • Working solutions 4. The "Raise Money" Fantasy Wasted time: • Pitching VCs • Creating decks • Network building • Playing startup theatre Should have focused on: • Getting customers • Making revenue • Proving models • Building assets The real truth about 2025: Success isn't about: • AI integration • Blockchain innovation • Web3 presence • Metaverse positioning It's about: • Clear unit economics • Strong cash flow • Real customer needs • Actual problem solving Want to start a business? Focus on: • Revenue from day one • Problems people pay for • Solutions that work • Markets that exist Avoid: • Fancy tech stacks • Trendy solutions • Complex systems • Hype chasing The harsh reality: • My first startup died from complexity • Second one failed from tech obsession • Third one burned out from AI dreams • Fourth one finally focused on revenue Now at DataXLR8: We help others avoid these expensive lessons. (From someone who learned business success through multiple expensive failures) #StartupReality #NoBS #BusinessTruth