Re:The Decline And Fall Of Flowtab, A Startup Story
by 7Figures2Commas on Sunday September 01, 2013 @02:11PM
(#6311386)
First, thanks for sharing your experience.
This seems like a good example of how investors can be a detriment. Your original concept was designed to solve a problem you thought existed with the drink ordering process. The marketing "pivot" is completely unrelated to that and assumes a completely different problem for a completely different customer.
Personally, I don't think there's much to the marketing concept. When at a bar, most people are going to order what they like, and they're going to be engaged in a social experience. Both of these things work against a mobile app that is trying to serve as a channel for delivering in-bar advertising for liquor companies.
Only two of our bars in Denver actually paid for the product ($1,500 for license + hardware upfront, plus $99/month), which wasn't enough to justify the $3.5 million valuation we raised on. What got our investors excited is tapping into the $3 billion of advertising dollars spent by the liquor companies every year. In 2012 less than 3% of this was actually dedicated to mobile, these were the deals we wanted to go after. So it became more about user growth and number of orders than revenue.
I still think there is an opportunity there -- giving liquor companies a better way of marketing their products on-premise through mobile. But I doubt it will be a mobile ordering app that cracks the nut.
Kyle H.