Tyler Reed

I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.
- Michael Jordan

It was mid 2008 and Younique was doing reasonably well. However, I had an itch that I needed to scratch. I wanted to build a mobile advertising platform – think DoubleClick meets AdMob. At the time the mobile advertising market wasn’t as competitive as it is today. Towards the end of 2008, I decided to forgo the R3m+ revenue Younique was likely to generate for 2009, shut it all down and found what would today be known as Aduity.

Unfortunately things haven’t turned out as planned. I’m not going to go through exactly what went wrong, it’s still a little too early. However, as the founder, I have to take responsibility for the failure irrespective of what went wrong. I am publishing this because I want to force myself to become more comfortable with failure and to also encourage other tech entrepreneurs to share their failure(s).

1. Great Technology isn’t the Silver Bullet

We built some great technology. I think the most impressive piece of technology we developed was a version of iAd for Nokia devices, which was no easy task. Unfortunately you need more than technology. Just because you build it, doesn’t mean they will come. It is important to pay attention to market timing, sales and marketing that equals, if not trumps, your product development efforts.

2. Release Early, Release Often

It’s something that has been said over and over again, but when you’re in the driving seat it’s easier said than done. I am a perfectionist and want things to be perfect. We had our first trial run after 3 months of development but it took us almost a year to put out our first major release (and quietly too). After a few months it was clear that our mediation layer feature was most used, so we ended up ditching everything else and turning the mediation layer into the product. If we released earlier, we would have known that sooner and saved ourselves precious time and wasted code.

3. Raising Capital is Time & Energy Consuming

I wasn’t 100% familiar with the process of raising capital until I actually did. It takes time to find the right investors, never mind those who will actually back you. It takes time to negotiate the term sheet. Once you’ve got a signed term sheet, there’s still due diligence, then drafting of agreements and once those are signed, you finally get the money. In an ideal world it should take less than 3 months (once you’ve got a yes), but it can take up to 6 months and in some cases longer. It is time and energy consuming and will affect you and your team as it remains top of mind.

4. It’s a Priceless Learning Experience

I can only become a better entrepreneur by learning from both success and failure. Arguably you learn more from failure. I would have preferred to fail faster, but then I would have missed out on some of the other learning opportunities. I have definitely learned to manage a team of developers and designers much better. I am now more intimately familiar with the process of raising capital. I have also picked up a few more skills along the way and more importantly have learned and grown more than I had expected to.

Conclusion

One might think that I have wasted almost 3 years and the large sum of capital I personally committed. One might think I was foolish to even attempt it in the first place. I like to look at this way. I have no regrets. I was able to pursue an idea that allowed me to meet incredible people along the way that have contributed to my growth as an individual. I have failed at a young age, and might do so again, but everything I go through now makes me a better entrepreneur – like wine I get better with time!

In this second episode of withTy I sat down with Chris Humboldt and Jean Moncrieff the team behind iThawt and Compass at Emerge Studio, the skunk works division of Emerge Group. Both products they built are solutions to their owns problems and their clients’ problems.

We chatted about how both iThawt and Compass came about and how they convinced an impressive client list to host important documentation in the cloud. We also discussed how they solved their problem of subscription billing and how they went about determining their monthly subscription prices for iThawt.

I was particularly interested to hear how iThawt pivoted and their future plans of introducing social business into the platform. Even though iThawt has only recently launched, I was impressed with it after playing around with it for a while. Chris and Jean would really love feedback so they can progress in the right direction, so sign-up and give it a go.

If you missed it, Alan Knott-Craig Jnr (through World of Avatar) acquired a 90% stake in MXit, well known for its mobile instant messaging service. Besides stepping down, Herman Heunis along with Naspers sold their stakes in the company and the remaining 10% is for the benefit of the employees of MXit. Alan will now take the reigns as CEO of the company.

Before I go any further, I would first like to commend Herman Heunis who certainly risked it all. I am personally inspired by him and after 6 years of hard work, I hope he enjoys his well deserved break.

Since news of the acquisition broke there have been more questions than answers. Why did Naspers sell? Is it because they don’t see a future for MXit? What will Alan do at MXit? Is he aware of BBM, WhatsApp and all the other competing mobile IM services?

I am going to take a step back and first look at how BBM ate MXit’s lunch and why it lost out on smartphones. Essentially there are two important reasons why MXit lost ground to BlackBerry’s BBM.

1. Device Integration with Push Notifications
2. BlackBerry Internet Services

MXit’s biggest problem was that you had to keep the application open in order to receive messages. They tried SMS notifications in the early days, but that obviously became too expensive. And this is where BlackBerry moved in. BBM has tight integration with the device and therefore they have made BBM work just like SMS. I can close the application and receive a notification (just like SMS) when I receive a new message. Obviously this is coupled with their BIS offering which gives you unlimited data for around R59 per month (although that might change).

I used to be an avid MXit user until I got an iPhone. MXit’s biggest strength was (and still is) in being able to support thousands of devices, predominantly low-end devices or feature phones. However they were very slow to adopt smartphone platforms (iOS and Android) and when they did, the experience could have been better in my opinion. It felt as if I was still using an old application, it just didn’t feel as easy to use or as well designed as the competing applications. However, their metrics didn’t show that smartphone platforms where that important did they?

So yes, it is widely known that MXit has faced some stiff competition in the smartphone space, especially from BlackBerry. It also appears that BlackBerry will continue to grow in South Africa. Ah, South Africa? We shouldn’t forget that MXit is a global company. We need to take the other markets they operate in into account. I don’t have statistics available, but I know they have experienced massive growth in Southeast Asia and other developing markets over the last few years. With 40 million users and 14 million of them in South Africa, you can do the math.

The MXit Opportunity

Alan has mentioned that there is a window of opportunity to get MXit’s “ducks in a row”. And this is where some people ask isn’t it too late? I definitely don’t think so. Essentially MXit are in the perfect position to stage a comeback over the next few years and become a dominate player in mobile IM space globally (yes, I am ignoring the “social network” part of MXit).

I think that Alan will be looking to the rest of Africa for new growth (without excluding the rest of the world). Using MXit’s biggest strength, support for thousands of low-end / feature phones and now Alan’s network too. What about smartphones? I mean feature phones won’t be around forever right? This is the comeback opportunity I’ve been alluding to. Smartphones are becoming cheaper and will become more widespread in developing markets over the next few years. MXit will need to leverage this change over. With their large user base, if done right, they can make it happen.

I don’t know why Naspers sold, maybe Herman wanted to leave and they didn’t want MXit without him? Perhaps Alan made the right offer. All I know is that the future potential of MXit is immense. If somebody had to ask me if the acquisition was worth the money, I would reply by saying definitely! Remember, I touched on the instant messaging service. MXit has additional products, and as they grow the potential for solving problems like mobile banking throughout Africa (even globally) become possible. Maybe they will go head-to-head with Facebook.

Update: Arthur Goldstuck has interviewed Alan Knott-Craig on the future of MXit and it seems I wasn’t too far off on my analysis.