4 11, 2012

The MC Graveyard: Ideas that did not make it: Kidlandia strikes colors

By | 2018-06-14T06:49:56+00:00 November 4th, 2012|Cases-Consumer, Clothing, Failures and Flaws, MC Graveyard, MC500|

Graveyard_by_flicr_CC_open_LicenseLast week we gave a short insight into the work of personalized kid`s goods producer Kidlandia.

Unfortunately, it has just been announced on their website that October 22nd, 2012, has been the last day to order any of their products.

Sad
truth appears to be that Kidlandia – like about 20% of startup companies
that we analyzed as part of our MC500 study –
could not establish itself well
enough on the market to become a long-term success story.

This
is perfect prove that a well-built configurator and a nice business idea
alone are no guarantee for a successful mass customization venture.
More factors play into it and, as we detailed in the MC500 study,
solid knowledge about both these factors and their proper combination
is key to make the difference between a good idea and a good business.

21 08, 2012

Update: YOUTAILOR Finds New Investment, Withdraws Insolvency Application

By | 2018-06-14T06:54:21+00:00 August 21st, 2012|Clothing, Failures and Flaws, General, MC Graveyard|

Copyright YOUTAILOR, www.youtailor.de, all rights reserved!Just a few days ago, we reported about two mass customization companies that did not make it on their market for custom shirts. Amongst them was German start-up YOUTAILOR, one of the leading entrepreneurs in the field of online custom tailors.

Just moments ago we received news from YOUTAILOR's public relations department, informing us that the company has managed to find a new investor to support its future operations. From what we have learned, Christian Heitmeyer of Pearl Bay Beteiligungs GmbH, a German investment company already involved with ventures such as brands4friends and Allyouneed.com, has decided to commit to YOUTAILOR and help the company to stay in business.

As a result, YOUTAILOR has withdrawn their insolvency application which they had filed in July of this year.

It is great to see that an uprising German start-up gets another chance to develop and (re-)establish itself in the market of mass customized clothing. We will watch their further work and report back on their future successes – or lack thereof.

The full press release (in German language) by YOUTAILOR as sent to us today, August 20th, 2012, can be downloaded here.

16 08, 2012

The MC Graveyard: Ideas that did not make it: YouTailor & Shirts Onthefly

By | 2018-06-14T06:54:26+00:00 August 16th, 2012|Clothing, Customization Trends, Failures and Flaws, General, MC Graveyard, MC/OI on the Web|

Graveyard_by_flicr_CC_open_LicenseAlthough mass customization has proved to offer great opportunities to companies of all sizes, there also have been quite some failures. We will try to look into some of the companies that did not make it in a new series of posts.

And there are many of these failures! When conducting the research for the MC500 study, we learned that over the period of just one year, 17% of our original sample population went out of business. Analyzing the failure reasons showed that these startups on the one hand face "common" challenges of startups like not progressing out of the bootstrapping phase into a scalable business due to undercapitalization, wrong investment policy, overconfidence, and an insufficient business model as well as problems within the team, such as the loss of key employees.

But on the other, there are two more specific reasons for failures of MC companies, according to our research:

First, difficulties encountered by the studied MC companies may be ascertained to possible inadequacies of their toolkits. Many of the toolkits that we studied do not follow the design principles suggested as success factors by previous research: Only 55% instantly visualize consumer input, less than 20% of vendors make use of peer input in the design process, 61% do not provide information on progress of purchasing process. Only 22% allow customers to share their creations with others, just to mention a few shortcomings. The reality of toolkits clearly falls behind the academic research on design parameters of successful toolkits, suggesting a large shortcoming in transferring research into practice.
   
Secondly, problems in making mass customization work may also lay elsewhere. In an exploratory survey of 68 entrepreneurs and consultants active in the MC business (conducted in Oct. 2009), for instance, we discovered that detecting customer idiosyncratic needs and creating flexible fulfillment processes are considered as more serious concerns (average score=4.0/5 and 3.9/5) than creating toolkits that support the sales process (average score=3.5/5). This  research, the preliminary results of the Customization500 study, and many interactions with managers during case-study based research show that profiting from mass customization is not an easy task!

Two current examples have been the market for custom tailored men's shirts. The German MC blog egoo.de recently reported on two consecutive insolvencies of companies believed to be promising ventures.

First company to be hit by bankruptcy was German start-up YouTailor, one of the leading entrepreneurs in the field of online custom tailors. Despite a number of potent backers like Holtzbrinck Ventures, Tengelmann Ventures and myphotobook, YouTailor CEO Michael Urban had to file insolvency mid-June caused by financial irregularities, as eggo.de reports.

Just two weeks later, another mass-custom shirt company, SHIRTS ONTHEFLY, had to strike colors or, as egoo.de quotes the company's announcement, to declare "the mission to make high-quality bespoke shirts available for everybody" a failure. Very sad indeed, seeing how they had announced to team up with Berlin-based venture Upcload, enabling customers to measure themselves via webcam capture technology.

May there be a trend indicating that custom tailored shirts are not very high in demand? Or may it be more likely that these two did not do one of the most important things when establishing a new MC company: Seek qualified expert advise and connect with other founders and MC entrepreneurs to share experiences.

Egooo.de is speculating that the heavy use of Groupon may have facilitated the bankruptcy of YouTailor. No other company in the mass customization domain has used Groupon so often, sometimes with discounts of 50% (which makes no sense at all for me if I consider the economics of mass customization manufacturing — there you wanted stable sales, no sudden peaks!)

For the full stories about YouTailor and SHIRTS ONTHEFLY, head over to egoo.com by blogging colleague Heiko Vogelgesang!