A startup ignored a competitor, thinking their product was different. In 18 months, revenue crashed from $16-17 million to $4.5 million, forcing them to shut down services. They still had $8 million in the bank but didn't pivot in time.
A common refrain in startups is don't pay attention to your competition. So we had some sense that they were a really interesting competing product, but we thought it was very different. Turns out we were wrong. Over the next year and a half, our business dwindled. We shut some parts down, but our business also dwindled. So we were doing $16 million in San Francisco, roughly $16, $17 million, and we ended up at a like $4.5 million run rate before we shut it down. And some of that was us closing certain services, but a lot of that was just demand loss. Like people didn't want the product anymore. So I think the secondary cause right underneath us giving up because we could have then tried a cloud kitchen or another business, we had $8 million.
