According to U.S. Census data, less than half of businesses started between 1977 and 2000 lived to celebrate their fifth birthday.
Indeed, today’s entrepreneurs understand there’s no guarantee they’ll succeed. There’s even a celebratory culture around failure in some circles. But if a startup does fail, the question is what lessons can be applied to the next one.
Case in point: MobileIgniter, a Madison, WI-based startup launched in 2011 that focuses on the Internet of Things—where device makers update offline machines with Internet capabilities—will be shutting down in August, says co-founder Tim Nott.
“It’s really, really hard to close a company—it’s extremely painful,” Nott says. “I don’t have any regrets, and I’ve learned a ton. But there are so many people that helped us out, invested in us, and cheered us on. I wish I could’ve been able to repay that in the way that everyone likes to see that happen—with the big success. That part is definitely a thorn in my side.”
Mention the Internet of Things to many non-techies and they’ll think of gadgets such as connected thermostats, lights, and doorbells. Nott says that while consumer-facing devices are the headline-grabbing, “sexy part” of the IoT, they’re just the tip of the iceberg.
MobileIgniter chose to focus on the business market for IoT. “Long term, there’s going to be many more sensors and devices on the agricultural, industrial, and manufacturing side than on the consumer side,” adds Dominic DiMarco, the startup’s other co-founder. “Most people don’t need their refrigerator connected to the Internet. But the people who manufacture that refrigerator are putting sensors and intelligence all along through their assembly and distribution channels that are making that refrigerator cheaper and more reliable.”
A report by McKinsey & Company estimates that business-to-business applications will account for nearly 70 percent of the IoT market in 2025. By that time, connected devices could have an economic impact of up to $3.7 trillion in factories, ahead of other settings like cities and vehicles, according to the report.
Another reason MobileIgniter chose to focus on IoT applications in agriculture and manufacturing had to do with what was happening around the company in Wisconsin and the upper Midwest.
Nott says that after completing a few projects, some of them for Fortune 1000 companies, he and his team struggled to sign up new clients. One major challenge was that MobileIgniter is small and lean, he says, while the groups it targeted were generally large and established.
“What we found was that the sales cycle for the market we specifically wanted to go after is just way too long for a small company to absorb,” Nott says. “Originally, we estimated that the sales cycle would be somewhere between three and six months. We then adjusted that to say it’s nine to 12 months.”
MobileIgniter kicked off a marketing campaign around April 2015, Nott says. After a year had passed without closing a deal, the startup decided to call it quits, he says.
Still, Nott says he believes that there’s ample demand from the groups to whom MobileIgniter marketed its services. “We hope to see IoT embraced by manufacturing and ag in the state and in the region,” he says. “But it’s not going to be because of us.”
Indeed, the Internet of Things is poised for explosive growth, analysts say. According to research from Cisco Systems, by 2020 IoT will be a $14 trillion industry, comprising some 50 billion connected devices.
Nott says that he’s already taken a job as a product manager, which he starts next
