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This $63mn funded startup has shut down; Here is what you can learn

SHYP
SHYP
SHYP
SHYP

Shyp, which was one of the major disruptor in package shipping space (Uber of courier) is shutting down.

The company raised $63mn (including $50mn from KPCB) and even had legendary John Doerr on their board.

Shyp is the first to make it effortless and friction-free to ship your goods, in a way that’s almost magical [John Doer]

What really happened?

From a focus point of view, the company was stuck between B2B and B2C play and by the time it realised its mojo, they ran out of money.

Lesson #1: Product Market Fit is a bitch.

The only way to look at PMF is MPF, i.e. Market-Product Fit and like most of the startups, Shyp too looked at it from (my) product – (will figure out) market – (someday) fit.

Premature Scaling

the investment we took, everything we got, wasn’t warranted for where the business was at. And I think that really hurt us. The expectations were way too high. We had a lot of capital. We had to deploy it. And I don’t think we were ready to do that. We prematurely scaled.” [Gibbon, CEO Shyp / source]

Excessive funding drives insane decisions and we have seen enough of those in India as well. But that’s not really a mistake (hey! that is good salesmanship) – let’s come to the next point.

Lesson #2: Funding is NOT and I repeat, NOT and I repeat again, NEVER a sign of PMF or even if it is, you need to understand this:

Product Market Fit is always a moving target.

It’s not a nirvana state where you get in and you remain there.

Like a lion in the jungle, you still need to hunt for your next meal, the next big business model.

The biggest mistake most startups commit is believing in this equation:

If Funding = PMF;

Then Excessive Funding = Excessive PMF

Most startups die not due to hunger, but indigestion and while the ecosystem celebrates funding and awards, you as a founder need to celebrate customer wins.

Atleast internally.

How many Indian startups do you think still haven’t achieved their PMF and are receiving awards and funding  $$?

What do you think?

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