Author: Craig Rivett
Venture: JuJuFire
Website: www.jujufire.com
After a year of working as an Economist at a great company with amazing people I had one problem, I was bored. The work was cutting edge, the clients were fantastic and I was working with some of the best in the industry. That kind of structured consulting work was just not for me.
One day I was given an opportunity to start a career in technology. I was offered a place in a startup, developing an ecosystem of ventures.
My first task in this new venture was to learn as much as I could about eCommerce — It was decided that I should start an online shop to sell mobile phone covers (phone covers were selected as they are a homogeneous product where brand is key).
And so, JuJuFire.com was born. The idea was to create laser engraved wooden iPhone covers that were made out of recycled offcuts from a working carpentry.
The concept was great and in the very end the products turned out to be pretty cool.
So, why did it fail so badly?
Creating the online shop turned out to be the easy part (I used a WooCommerce shop platform with a PayFast payment gateway). Creating the product and selling it turned out to be harder.
Once I set my sights on the laser engraved recycled wooden iPhone covers I become very committed to the cause. Recycled wood, whats not to love?
The problem was that the developing iPhone covers out of recycled wood turned out to be far harder to make than we had originally expected. We wasted a lot of time in R&D when we should have moved onto a simpler and far cheaper product material like plastic.
When we finally developed covers we added a range to the online shop and were ready to start selling.
With online shopping it is not a case of “build it and they will come”. You need to get as many potential customers onto your shop as possible and then persuade them to buy. This is particularly difficult with a new product like iPhone covers made out of recycled wood.
To get people to the shop we focused on paying for Google Adwords and Facebook marketing. This gave us expensive traffic, and few sales conversions.
In the end the cost (time and money) of promoting and running the website outweighed the sales we were getting. We ended up shelving the JuJuFire project.
Based on a postmortem of this venture, these are the 3 main mistakes I made (there were many more):
I was too committed to the product. As soon as I realised that making wooden iPhone covers were going to take a long time to get right I should have looked at something else.No product = no sales = no cashflow = doom
I should have explored the use of a physical distribution channels to introduce many potential customers to the covers. This would have squeezed our margins, but could have resulted in two things: offline sales and online traffic (and sales) from people interested to see what the covers are about.sales = cashflow = joyIn the end we tried this but our per product cost was too great to give a retailer an adequate margin without making the products too expensive.
I tried to make things too complicated. There was a point where I was trying create ridiculous pricing models for referral sales, sales-based graphic designer compensation and corporate sales. In the end even I didn’t understand what the product was going to sell for and how people were going to be compensated. The lesson, always follow rule number 1:Keep it simple!
Craig Rivett
www.craigrivett.com
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