
The Decline And Fall Of Flowtab, A Startup Story - BIackSwan
http://techcrunch.com/2013/08/31/the-decline-and-fall-of-flowtab-a-startup-story/
======
mtt05001
I am the founder of Flowtab, and my goal in writing this story was to share
what we learned and accomplished instead of letting it rot for eternity in
Dropbox. Thus, we opensourced everything from our pitchdeck to source code on
Flowtab.com.

Kyle Hill and I are already back at it. Together, we launched www.homehero.org
a marketplace for senior caregivers, let me know your feedback!

\- Mike Townsend

~~~
mintplant
Thank you for going the open source route! There are so many cases where a
company goes under and something of value is lost because the original
developers couldn't maintain it.

For example, I would have loved to have seen a community-maintained version of
Glitch [1] take over after the game died out, but Tiny Speck refused to open
up the source code because they believed it would be too complicated for
anyone but themselves to run—a justification which has never made sense to me.

And if nothing else, it gives a deep peek into how a production system is run,
something I'm always grateful for.

[1] [http://www.glitch.com/](http://www.glitch.com/)

~~~
mtt05001
I agree, and thank you.

------
7Figures2Commas
Not all startup failures are created equal, but when it comes to true flops
like this one, one of the commonalities I've noticed is a general inability of
the founders to step back and see the forest for the trees.

From [http://alpha.flowtab.com/](http://alpha.flowtab.com/):

    
    
       We also set a major company milestone to reach 50 "Flowtab regulars" (defined by 2 or more orders in a trailing 30 day period) by March 1st 2013.
    

That's a really remarkable comment given that the venture was started in May
2011. With its $1 per order fee, this means that after nearly two years, the
company's "major" goal was to acquire 50 customers who would deliver a
baseline of $100 in revenue in a month.

Sadly, one of the lessons listed on
[http://alpha.flowtab.com/](http://alpha.flowtab.com/) is "Do things that
don't scale."

~~~
mtt05001
Agreed. I was the founder of Flowtab and I can tell you we always felt just
one step away from success. We felt mobile ordering was inevitable and those
who fought the hardest for the longest would win. I think different now...

~~~
hayksaakian
It seems like the "inevitibe" attitude works contrary to startups.

Its like a convenient way to remove your obligation of actually encouraging
people to do something because "they'll do it on their own"

Many things that seem inevitable are only so in retrospect. At the time, they
were probably seen as unlikely or simply possible.

------
devindotcom
"Flowtab wasn’t saving you enough time or energy to make it a compelling
experience."

Serious question - was it ever going to? It always seemed like a backend-heavy
way to optimize for a trivial inconvenience. I have to say, It seems to me
this was a failure because it was just plain a bad idea. That makes for a
pretty short story, though, I guess.

~~~
mtt05001
With 50,000 bars/nightclubs in the US, and witnessing the success of other
mobile payments companies (Levelup, Kuapay, and Starbucks app) it seemed
inevitable especially considering the poor ordering experience in many
establishments.

Mike T

~~~
devindotcom
Is Levelup actually considered successful? I have seen it in several
establishments around here (Seattle) but I have never seen it used, and the
employees tell me it is not popular or easy (unlike, say, Square). I don't
know Kuapay. Starbucks had something of a firm place from which to launch, so
it's not really comparable.

What's the poor ordering experience? Trying to get the bartender's attention?
I would submit that a poor order experience is a consequence of the
establishment, not the fundamentals of the ordering process. Personally, I
like the bar experience, it's personal, it's immediate, you can get
recommendations, and it's fairly equitable for everyone around (shovers will
be ignored by a good bartender, though a good bartender is by no means
guaranteed). On the other hand, a remote ordering situation turns every bar
into a drink machine activated by an impersonal, drive-thru-like interface. If
you prefer that to the existing system, perhaps you should patronize a better
bar!

I agree that there is probably some interesting way to leverage personal
technology in this space, but it's not this. This app does not improve the
"ordering experience," it eliminates it. That's a bad idea.

~~~
timmm
It's in Boston a fair amount, I see people using it.

------
zach
Great postmortem. These kinds of high-altitude narratives, which describe the
overall lifecycle and tell the key stories, are utterly fascinating, success
or failure. When you're so focused on something, then discover parallel
narratives to your experience, you gain perspective that's useful and even
emotionally valuable.

They're very common within the game development world, after becoming a
regular, beloved feature of Game Developer Magazine (now defunct). Here's a
big list of them, perfect for a Saturday afternoon:

[http://www.pixelprospector.com/the-big-list-of-
postmortems/](http://www.pixelprospector.com/the-big-list-of-postmortems/)

Is there any collection of these kinds of articles for contemporary startups,
or similar postmortems that are also worth reading?

~~~
chrissnell
Back in the early 2000's, it was FuckedCompany.com. It was a daily dose of
layoffs and shut-downs amongst (mostly) tech startups.

~~~
ollieglass
There is TechCrunch's Deadpool now. Not updated nearly as frequently as FC
used to be.

[http://techcrunch.com/tag/deadpool/](http://techcrunch.com/tag/deadpool/)

------
aaronbrethorst
Vitamins and painkillers. I see a ton of small businesses around Seattle using
Square, and purchase food with a small literally hole-in-the-wall restaurant
with it about once a week. Square solves a very serious pain point.

This seems to be more on the vitamin end of the spectrum. It doesn't solve a
pressing issue I have when I walk into a bar. On a related note, this idea
also seems to suffer from almost a marketplace-style issue: both the seller
and purchaser need to use the app, which just makes things even harder.

If you do decide to tackle a marketplace idea again in the future, I recommend
adopting a multiple phase approach where the first part doesn't require buyers
and sellers. Build a product that will benefit one side or the other (I
recommend the sellers), and then pivot into a marketplace strategy once you
have sufficient traction.

Edit: in reading over the article in more detail, I have one thought. I
personally would've tried positioning the software as an easier means to order
room service in hotels. Ordering room service sucks, and I'd much rather use
the equivalent of Eat24 or GrubHub than picking up the phone.

~~~
badclient
_Square solves a very serious pain point._

Depends. I've seen and heard multiple stories of cab drivers or business
owners failing to process using Square. For them, it certainly was more of an
annoyance than a painkiller. In most these cases, I ended up paying cash.

Also, here's a truth about painkillers that few talk about: painkillers are
quickly commoditized. This is why you'll find vitamins to cost more than
tylenol even though it's the Tylenol that helps you when you have 102 fever.

~~~
aaronbrethorst
I think you're taking me a little too literally.

Incidentally, worldwide vitamin sales are expected to reach $3.3bn in 2015[1]
while pain management drugs (ranging from OTC drugs to opiates) are expected
to hit $60bn the same year[2]. So, painkillers revenue is ~20x vitamins.

[1]
[http://www.prweb.com/releases/vitamins/food_supplements/prwe...](http://www.prweb.com/releases/vitamins/food_supplements/prweb8114929.htm)

[2]
[http://www.prweb.com/releases/2011/1/prweb8052240.htm](http://www.prweb.com/releases/2011/1/prweb8052240.htm)

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autarch
I've noticed that there are a lot of startup ideas that fall into the general
category of "if we can get businesses to adopt us and get users to adopt us
then ... profit."

I worked for a company called DoTheGood way back in 2001 that had a similar
issue, although our problem was even worse since we really needed 3 parties to
adopt us (businesses, nonprofits, and users).

I think these sorts of ventures are just incredibly difficult to make work
without a massive amount of money to throw into advertising and sales. There's
a huge chicken and egg problem where, in the FlowTab case, users want bars to
adopt it and bars want users. You can't just hope that your technology is nice
enough because no matter how nice it is, without enough bars _and_ users the
tech is worthless.

If you have millions (or tens of millions) to push into advertising (to
acquire users) and sales (to acquire businesses) then maybe it could work, but
it just makes things that much harder.

Of course, we can identify some startups that did make it despite the chicken
and egg problem, like AirBNB and eBay, to name a few.

~~~
acjohnson55
It's known as a two-sided market ([http://en.m.wikipedia.org/wiki/Two-
sided_market](http://en.m.wikipedia.org/wiki/Two-sided_market)). Very
challenging to start, particularly if it requires upfront fixed-cost for one
or both parties, as in this case.

------
ilamont
Great story. TC, VB and others should do pieces like this more often. One
comment:

 _Flowtab could not be distributed through partnership with companies that
sell Point of Sale (POS) systems._

Anyone have insights into why this is?

~~~
mtt05001
I do! So before Flowtab I built ZingCheckout, a web Point of Sale (now used by
Tesla Motors). I learned a ton about POS distribution, it was a big part of
our growth strategy. However, a POS reseller really can't justify the cost in
selling only Flowtab (like you could with a POS) because it was an ancillary
product and couldn't yield the high upfront sales $ from bar owners.

Mike Townsend

~~~
tmzt
Was the focus on mobile ordering or mobile checkout at the end of the night
(or when the patron decided to leave?)

Integration with a POS would make that a better experience than everybody
trying to get the bartenders attention to close out the tab.

------
jamessun
While the story of the rise and fall of Flowtab was compelling, I thought
Flowtab did a great job with
[http://alpha.flowtab.com](http://alpha.flowtab.com). This site is a really
effective way of telling their story and I commend them for including several
"artifacts" (resources) for public consumption. It's never easy to admit
failure...

~~~
kaleazy
Thank you... I think it's valuable that entrepreneurs learn everything they
can from the fallen soldiers before them before dedicating valuable years of
their life to a startup. That's why open sourcing this was so important to us.

I like to think of startup guys as scientists... even if we didn't find the
cure for cancer, there's still value in discovering the 100 antidotes that
DIDN'T work.

FYI the alpha site is the same as our main site, www.flowtab.com.

Kyle H.

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mathattack
"Its life became a startup story that most don’t tell: A company that didn’t
make it."

Well actually there have been quite a few of these lately.

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photorized
When I go to a bar, I want some human interaction for a change. Ordering
drinks is part of the experience. But that's just me.

I am sure this was a fantastic learning experience for the founders.

Best of luck next time!

------
cmccabe
The problem was that this idea was a feature of a point-of-sale (POS) system,
not a product.

