Fail Tale is on of Wired.co.uk Silicon Europe columns. It celebrates failure and the steep learning curve that it offers.
In 2000, former BT CTO Peter Cochrane founded a tech incubator called ConceptLabs with a team from Apple Computers in Silicon Valley. The aim was to create an "idea-to-market" incubator that could be syndicated globally, providing support infrastructure spanning the cultivation of an idea through to a full IPO. ConceptLabs would find ideas people and bring the business and marketing nous required to take the idea to market. Within 18 months the company had seven companies that were looking strong, but then the dot.com bubble burst, and investment evaporated and ConceptLabs had to be closed down at the end of 2003. Cochrane talks to Wired.co.uk about what went wrong.
What was ConceptLabs' USP?
I'm not a great believer in "me too". If a market is populated with active and successful businesses, then going along and creating a look-alike isn't very smart. From the offset, the idea was to create something new and different.
ConceptLabs was an "idea-to-market incubator" company that was to be syndicated globally. We started in Silicon Valley with people coming to us with good ideas and good technology but without the experience of how to create a product and get it to market. Generally speaking they had worked in companies but had never built one. Our idea was to provide a 'soup to nuts' support infrastructure spanning the cultivation of an idea through to a full IPO. The ConceptLabs model was to put a company and management 'wrapper' around these 'ideas people'.
We had teams with tech, design, production, and management skills, plus all the experience needed to create a company and get products to market. We also had direct access to money and the long term finance needed.
The business model was simple: ConceptsLabs worked for a share of each new company created -- and we were investing our own money alongside that of the VCs that supported us in this new and, at the time, highly innovative venture.
Who were its competitors?
At the time, nobody. That's why I liked it: we were alone, the pathfinders!
What went wrong?
Within eighteen months, we had seven companies that were up, running and looking good. We were really on a bit of a high. We were doing well. We had the first ConceptLab based in Silicon Valley and I was looking for premises and people in the UK to set up the second ConceptLabs unit, and we also had people in Australia and Hong Kong contemplating their next move.
But then, we had the dot.com bust. The financial guys decided that high tech and startups weren't for them, and they could get a better percentage for their money somewhere else. So at the drop of a hat, they withdrew all of their funding. We were left high and dry with seven companies running with a need for continual investment to get them to market.
It was a pretty horrible experience. It's like you built a house, and someone comes and takes a layer of bricks out of the bottom. So we bumped along and struggled for another 18 months. But in the end, we finished with two viable companies, and we had to ultimately close down the ConceptLabs operation. I was very sad, because we had taken a long time to put good teams together, and created a viable and working ConceptLab, and in no time at it was all destroyed for such trivial reasons by unthinking people.
What could have been done better?
In a nutshell, to be self-critical, we were kind of intoxicated by the dot.com boom, with the possibilities. Instead of going very carefully for good money, we just went for money. If I had my time to do it again, I would have gone for good money, and ten times more of it. We were on a drip feed. We never had enough capital to weather any kind of turbulence.
The big learning point was: however much money you think you need, you always need more. And it's always better to have the money in your bank account than someone else's. And I suppose biggest of all: never trust financiers and money people.
I do think if we had started ConceptLabs five years earlier, it would have been a tremendous success. What we were creating were really solid start-up companies against a background that said these companies had the potential to become billion dollar winners. And yes, we fully recognised that there was going to be a failure rate that might well be nine out of ten. But we felt that because of the maturity, skill and capabilities within the team, if the market was failing at that kind of rate, we'd do somewhat better.
Did the company fail completely? If not, how damaging was it?
It certainly lost millions of dollars. But what really hurt was the loss of time -- we had just wasted three years of our lives. That is always what really gets to me. Once the years are gone, that's it -- you can't win them back.
What did you learn from the experience?
Of course there were mistakes, but we learned fast and had the experience to fix most things on the fly, and I continue to apply that learning to everything I've done since.
For instance, I've learned about the importance of luck. I always feel that there's one vital chapter missing out of business books. That's "luck". You need a lot of it. So you can get the tech right, the design right, the marketing, funding, staffing, everything. And even getting all that right, you still need an element of luck.
Whilst all the business books are written about Facebook, and Google, and all these companies, they're not written about the thousands of ConceptLabs that fail along the way. Behind every Google, Facebook, there are thousands that fail.
I've also learned things about starting and managing a company.
If you start a company, every single aspect, every dimension, and every component has to be right. If any one component isn't right, it will fail. This is not an and/or. It's an and/and situation. If the CEO is not right, don't try to change him -- replace him immediately. If the technology isn't right, get rid of it and replace it immediately. If the business plan or process methodology isn't right, change it real quick. And if the money isn't in place, and the finance structure is at all in doubt, don't even start. Because it will fail.
Any company is only as strong as its weakest link. And all this start up stuff is connected. The money, and the tech, and the CEO, and the team, and the marketing, and the sales, and the support, and on and on. If any one component is missing or weak, it just dies.
Have you applied that to other business ventures?
Very often, the mistakes I've made in the past have turned out not to be mistakes twenty years later. The world has changed. Young people have the advantage of naivety! They do things not knowing it's a bad idea, and sometimes thy get it to work. I've learned to be forgiving of these mistakes, because they can be great ideas and blessings in disguise.
I have also learned to pick myself up after a failure. It's like trying to learn to walk without falling. You have to stand up, brush yourself off, and move on. That's what I've done with other business ventures. And in the case of eBookers and Shazam Entertainment we got it right!
Ultimately, I don't want to die looking out the window, watching TV or playing bingo. I want to die doing something 'disreputable', definitely risky, screaming yeehaw as I go. I think life is just too much fun to be wasted.
Do you think your business is a contender for Fail Tale? Email Olivia Solon on email@example.com