A Little Failure Feeds the Flame
by Michael Matesic
Ever hear of Traf-O-Data? How about 3D Records? When’s the last time you took a kid to see a Laugh-O-Grams production?
All three of these long-forgotten endeavors ended in failure for the entrepreneurs who launched them: Microsoft’s Bill Gates, Motown Records’ Barry Gordy, and the eponymous Walt Disney respectively.
There is much debate about the skills needed to be a successful entrepreneur, and yet one skill that’s often overlooked--and might be the most critical given the crash and burn rate of startups--is the ability to deal with failure. While Gates, Gordy and Disney each failed for different reasons, all three responded to defeat in much the same way – by making sure the lessons learned informed their future decisions, and by adapting what they had already designed to propel their next innovation. In doing so, they became more skilled, more efficient, and much better at creating their own luck.
Michael Gualtieri, CEO and founder of Kiddix Computing, understands first hand the value, frustration, and rewards of trying, and trying again, to get a startup off and running.
Kiddix offers a complete operating system designed just for kids. Gualtieri initially sold Kiddix as a stand-alone software product, bundling the operating system with parental controls, kid-friendly Web tools, and kid-appropriate content. While he was garnering stellar reviews from industry experts and making some early sales via Amazon.com and the Kiddix Website, feedback from users suggested that the product would be more appealing pre-installed on a PC.
About this time, hardware prices were dropping fast, and Gualtieri surveyed the market to find that no one was offering what he saw as the five key components of a “complete solution” for a kid-specific computer: 1) rugged hardware; 2) kid-centric media and content pushed to the desktop; 3) parental controls; 4) a kid-optimized user experience; and 5) web access. He was confident that the timing was right and that he had four of the five puzzle pieces in hand to create the ultimate children’s PC. He also saw an opportunity to scale quickly by partnering with an OEM to acquire the fifth and final puzzle piece, freeing him to concentrate resources on product development.
Like most startups, Kiddix’s financial situation was tenuous and causing Gualtieri some worry pangs, but things were starting to fall into place--prominent child-media companies were interested in showcasing their brand through a dedicated device, an OEM was ready to jump on board, and a flow of positive feedback from potential investors encouraged Gualtieri to keep pushing forward in the new direction.
All that was left to do was white-label the OS and bring a consumer electronics distributor to the table.
And this is where the fast-lane to success exits onto the road paved with lessons learned. Gualtieri’s financial needs ultimately outpaced his ability to capture the funding needed to build out the product. He was forced to leave deals on the table, cut costs to save the company, and reevaluate the steps and missteps he’d taken so far.
In the year or so Gualtieri spent rethinking his path, the mercurial world of consumer electronics transformed, making the idea of a single-device Web connection obsolete. Web connections became ubiquitous, available on all manner of devices, and content was a constant stream, jumping from phone to tablet to TV.
“So,” thought Gualtieri, “instead of a dedicated device, why not cut Kiddix completely loose? Why not offer a cloud based solution that provides the four components that Kiddix already delivers expertly and let the user decide what their preferred device is at any given moment? ”
While Kiddix, Gualtieri’s first start-up venture, is by no means forgotten or a failure (he’s still making sales), it’s in the process of being born again in a new form factor, in much the same manner that the above-noted business icons reformulated their missteps into next-steps on the way to success.
Start Me Up appears monthly in the print edition of TEQ Magazine.