Listen to this article
A little more than a year after winning a business plan competition, tech start-up Spotted has called it a day on its venture. Their plan to launch an app to help people network more effectively did not make it on to the market.
But although the four co-founders of the team, MBA graduates from Mannheim Business School in Germany, have now secured full-time jobs, they have no regrets about starting a business together.
The Spotted mobile app was designed to help people attending large-scale events to network easily with each other. The team considered deploying the software in conferences and trade shows before focusing on careers fairs. Using the app, jobseekers and employers would be able to create online profiles and set up meetings during the event. The aim was to reduce the element of chance when it came to professional networking and to put the face-to-face interaction back into social networking.
Yet despite winning the European Business Plan of the Year competition 2012 the team – Alistair Bruce, Moritz Hertler, Stefan Reuter and Christian Uhrich – knew that this was no guarantee of success.
One of the main problems for Spotted was in securing sufficient funding. Earlier this year, their application for grants from the German government was turned down. If the economic climate had been better Mr Reuter says that perhaps their chances of getting funding would have increased.
Spotted even featured on a crowd funding website – Startkapital Online – to try to raise money from investors. The aim was to raise a minimum of €25,000 by mid-March this year. The crowdfunding terms state that if the minimum specified amount is not reached by a certain date, then any initial money pledged is made void. The Spotted team only managed to raise €11,000 and therefore the application was cancelled.
Although Spotted did succeed in attracting the interest of entrepreneur Candace Johnson, who wanted to invest as part of a group, the team was unable to find a suitable interested second party.
The team also needed additional help on IT development to turn their idea into a working product that could be sold to customers and presented to potential investors. For instance, the app required a database to help connect users. But the team did not have the money to hire the experts needed to develop this.
Mr Bruce says that the apps market is a competitive one and with a multitude of products available, it is very difficult to stand out from crowd.
Even though their entrepreneurship journey has come to an end, the idea for their app is not dead. Mr Bruce is convinced that it is only a matter of time before there is a better way of interacting at trade fairs. The team hopes that event and trade fair organisers will take up their idea.
Start-ups can founder because of personality clashes, but Mr Reuter says that this was not the case with Spotted. The team was “fantastic”, he says, which makes it even more of a shame that the venture did not succeed.
Reflecting on their entrepreneurship journey, the four have amassed a network of contacts and gained experience that will be invaluable in their future careers.
Mr Hertler and Mr Bruce now work for Adtelligence, a digital marketing optimisation company, and would not have met its co-founder, Michael Altendorf, were it not for Spotted. They met through the entrepreneurship club at Mannheim Business School, where Mr Altendorf was a guest speaker. He even provided ideas for the team in their preparation for the business plan competition and kept in contact with them.
The Spotted team has learnt several valuable lessons from the venture, says Mr Bruce. Would-be entrepreneurs should never underestimate the time and effort it takes to secure investment, he says, be realistic in what they are trying to achieve and always have a plan B.
Get alerts on Business education when a new story is published