Three years seems to be the magical number, if magical means cursed. It’s well-known as the point when 90% of startups close, but it’s not for the reason you might expect.
Three years ago we started Origami Labs while seated in the back row of Hong Kong University of Science and Technology’s weekend classrooms, creating ORII–the world’s first voice assistant ring. Since then, we have raised seed and Series A funding of US$4.25 million, sold as many ORII as we can make, and launched our invention successfully globally in key markets. We’ve built a talented tiger team of 20+ practical dreamers, and have been working on a truly next-generation successor to fulfill Origami Lab’s conversational interface ambitions.
By many people’s standards, we’ve survived the three-year curse. We didn’t realize the gravity of this phenomenon until we remembered just how close we were to the brink. A startup living on a razor’s edge is no myth, and between seeing compatriots fall to the wayside and our share of struggles, I count us as lucky to have made it this far.
We who are still standing can take a brief moment to pat ourselves on the backs for what we’ve achieved, but the fact is that we are now facing off against even trickier problems. What one comes to realize is that it’s not necessarily the macroeconomic, industry-wide factors that we face off against, but rather the seemingly insignificant decisions that cause great startups and great people to fall. I had many assumptions about why startups fail, and I’m still trying to find the answer.
I first thought that failure was perhaps due to poor expense management, renting Lamborghinis on business trips, and indulging in overly lavish offices. Alternatively, it could be overspending on people, opening too many satellite offices or adding headcount without clear directive or objectives. Alternatively, perhaps the culprit behind startups’ failure isn’t money, but a more fundamental issue: a lack of team cohesion, or disagreements within the founding team that corrode morale and passion.
Sadly, I’ve seen all of the above firsthand. The obstacles are common and challenging, but they cannot explain how great startups fail. Every weakness mentioned above could also be a strength: knowing when to celebrate can be great for morale, hiring talent can lead to unforeseen products and solutions, and team conflict can result in a stronger and more cohesive team moving forward.
A lot of what we do as entrepreneurs is a double-edged sword. I started connecting the dots on our recent trip to Las Vegas for the Consumer Electronics Show. Strolling through the gambling tables and watching people put down thousands of dollars, I observed that the biggest losers were the professionals in games of chance, like poker or blackjack. Because when we’re skilled, it’s easy to get lulled into a false sense of confidence.
Startups’ 90% mortality rate reminds of the 90% wealth loss in inter-generational business, like that adage that wealth doesn’t travel three generations. Seemingly unending, massive amounts of assets vaporize because of overconfident, misdirected investments.
In a startup, we operate similarly, though on a hyper-accelerated timeline. It doesn’t require three generations, because we go through the life cycle of traditional business in the span of just a few years. One year can feel like a decade. As we win competitions, secure funding, build our teams, we become more and more confident in our skills and decision-making process. Often, the moment when we choose to go all in is when the floor crumbles beneath us. That is how we rise so fast and fall even faster.
The critical question is this: how do we know when our judgment is failing, and we’ve shifted dangerously from being a visionary to being an errant gambler? Is the process the flip of a switch, the blade of a knife? Or is more the process more gradual, and can the people around us warn us? Are there signs that our capabilities are slipping?
For those of us that live and breathe the entrepreneur life, we experience a time paradox. The three years since our startup was born to have seemingly flown by, yet I feel I have aged a decade. However, there are no regrets. There hasn’t been a single day in the past three years when I have woken up not wanting to open up a computer, pick up a pen (or a power tool) and get to work on shaping what comes next for Origami Labs.
About the Author
Kevin’s experience as the General Manager of a luxury watch distributor and manufacturer has translated over to the design, development, branding, and marketing of the ORII ring. It’s also via Kevin’s luxury watch network that the company has secured key hardware partners and angel investors. On the technical side, Kevin has lead wearable/IOT market research and product development of modular smart watches. Finally, Kevin has experience launching and marketing a luxury e-commerce platform.