Too Important To Fail. That about sums up the investment thesis behind Better Place.
A grandiose scheme to make the world a better place, born at the World Economic Forum in 2005 and launched in 2007, Better Place as a company never fell into a nice, neat niche. It was not a car manufacturer, a battery manufacturer, or a technology provider. Instead it was a sales & marketing organization, a battery-swapping infrastructure management company, and a tracking & billing company rolled up into one uncomfortable mashup.
Even though it raised astronomical sums of capital and had the appearance of a large multinational, it was every bit as much of a startup as say, Tumblr, also founded in 2007. However, while Tumblr had a focused mission that was fulfilled gradually, Better Place tried to be, and perhaps had to be, all things to all people, at least to its customers.
For comparison, imagine a modern automobile company not only needing to engineer and build its own cars, but also to make tires, transmission fluid, and open gasoline refilling stations wherever it thought its customers might drive. Not a very feasible proposition. This is, however, roughly what Better Place took upon itself.
The reason behind Better Place’s failure to thrive is actually very simple: the company earned less money than it spent. But the lessons lie in the reasons why that happened. For now I want to deal with just one:
It All Starts At The Top
On the one hand, we expect founders to have vision – not just small, compartmentalized vision but an encompassing vision of their niche – and also to be assertive about pursuing and communicating that vision. On the other, declaring that your company or business model is the only solution to a problem is a sure way to be blindsided by the competition that will inevitably come.
In my opinion Better Place lived and died on arrogance and hubris, greased by greed. This is essentially the underlying theme to the other issues which will be covered in the next posts.
Over the next few posts I will try to dissect why Better Place didn’t succeed from the point of view of it being a startup. There are some good lessons to be learned which can be applied to most startups, no matter what the field.
In the next few weeks I will be publicizing a series of courses by entrepreneurs and for entrepreneurs that cover many of the pain points in founding and running a startup. Stay tuned.