You made a product no one wanted, and in order to market it, you stumbled onto a product that lots of people wanted in a market where billions of dollars are spent each year (we spend about 10 grand a year on conferences, and we're a tiny company with a tiny marketing budget). You've now ditched the product people wanted, presumably selling it for a pittance, and went right back to a similar mobile app to the one you couldn't convince anyone to use, despite excellent marketing savvy.
It sounds like you guys are a great team, and I bet you'll make many great products in the years to come. I hope you'll also figure out that when the market speaks that loudly, it's a good idea to listen. I had the same problem for many years; it took me three years, from the time we first wrote the code, to realize that Virtualmin could be a great business.
It may have started with a mobile app, and he found some tangential success with printing name badges at conferences. But nowhere in your response addresses that maybe the OP didn't want to print name badges for a living. He sold his company which he wasn't truly passionate about which enabled him to do something he was passionate about. Sounds like a success story to me.
Not everyone's motivations are the same, and when that's the case we end up with criticisms that aren't focused on the essence of what is being told.
That said it's always hard to criticize success. It's like these guys just did a gymnastics routine and got a 9.5 and then we harp that they should have gotten a 10, while we sit here gobbling popcorn from the couch. :)
It would have been just as valid to stick with the idea people begged for/made money and add features that made you happy. Wouldn't it have been valuable to test/market View to thousands of customers with the need they were trying to solve?
I haven't suggested they should have stuck with label printing or that they should have sold it and started something new; my advice applies no matter what path they chose. I suggested that I don't think they learned the lessons that the market was willing to teach them.
In my wizened old age, I think back on similar situations in my own life, where I missed the signs and missed opportunities that would have had very low costs and very high pay outs. This is one of them for this team.
Since everyone wants me to have actually made recommendations for what they should have done (rather than what lessons they should have learned, which is all I covered to start with):
1. When you have a business that takes off on a run like this, and you know you're going to cash out and run; raise your prices. Raise them a lot. Double them. If volume doesn't drop, double them again. Rinse and repeat until you have found the point at which customers stop coming to you. Conferences are huge cash cows. They have money; if you solve one of their problems in a cool, social, way, they will pay for it. So, OP should have started charging earlier and more (a lot more).
2. Learn from failure. It sounds to me like they're back on the same sort of project as the one they couldn't convince people to like to start with. If they're passionate about social mobile apps, that's fine. But, you have to be willing to listen when the market says "We do not want this."
And, let's add a bonus third point:
3. Leverage past successes to enable future successes. As you note, it sounds like View could have been launched as a cool feature of the label business, getting it into the hands of all of those CEOs and investors that passed through their system. It started as a marketing ploy, and it would have been an effective one for the new product...I don't know that it makes the new product any more awesome or wanted by people, but it is still a valid avenue for marketing the product to thought leaders.
My point is merely that I don't think they really learned all the lessons they could have learned from these experiences. I'm almost certain they undervalued their label printing business, for instance. Certainly they should have started charging for the service earlier.
And, I also think that they're maybe underestimating the value of listening when the market speaks.
But, by all means, people should work on stuff they love. There's no way a small, bootstrapped, startup can possibly weather the hardships in the beginning, when money is tight, rewards are few, and everything takes longer than expected, without having a real passion for the work they're doing.
Some things are more important than commercial success, and taking the exit door when presented with a base hit or standup double, especially when it's a product your heart's not in, doesn't sound like that bad of a choice to me. I'm in a very similar situation atm.
That's nobody's fault but their own. That's one of my primary points about them not really learning a valuable lesson. If they were booked solid by prime conferences at those prices, and people were calling them from all over the country, I'd suggest they were undervaluing their service by at least an order of magnitude.
I believe they should have begun charging sooner and much more than they were, especially if they didn't particularly love the project. When I started hating my previous company and the work I was doing, I doubled my prices. It didn't hurt sales, and I put more money in the bank for my next venture.
I think my intent is being misunderstood quite a bit. I tried to clarify in another response, but it seems like people think this is an either/or thing; that they had to keep working on the label business to be living according to the Gospel of SwellJoe. And, that's not what I mean, at all. I mean that if you're going to build/run a business to bootstrap another business, you should charge enough to make it worth the effort you put into it. They built something that people really wanted, and then grudgingly started charging a tiny bit of money for it (when I'm doing stuff I don't love, I won't even leave the house for less than $500; seriously, when I was doing contract IT work, I billed $125/hour with a four hour minimum), and flipped it for probably much less than they could have.
I'm not suggesting they should have stuck with the label printing business forever, just that they did not capitalize on the label printing business on anywhere near the scale they could have, and probably in the same time period.
It's much different from something like contract IT where nobody knows how to bring the network back up and they can't do any work while it's down.
So, I don't think they gave up something successful to pursue something less successful. Rather, they decided to continue to work on something about which they are passionate.