Dijiwan was a French company that went through many phases before facing a bleeding death. The founders and co-founders went through many things and learned some lessons working with their employees, investors, partners, customers, etc. Dijiwan was initiated around September 2010, and the team started to work putting all their efforts to raise it. Will all the hard work and efforts put to work, Dijiwan raised 0.5M€ in January 2012 from French public investors to grow its business within a year of work. With time, the company started to struggle to remove its paychecks and ultimately requested bankruptcy protection in September 2012. One of the co-founders described the reason behind the failure of Dijiwan and started with when he ignored his gut feeling about raising money first for the financial backup. Instead, the team focused on developing a high-quality product.
Bad Hiring and Inappropriate Management
Management and hiring were one of the reasons behind the downfall of the company. The company hired too many people to generate the deliverables. The marketing team took a week to create six pages of the website. The company also realized that the team was not showed significant performance and also they were a big team to do not many tasks. It also cost the company in terms to paying salaries.
A lot of money was spent in a short period on some of the business trips that didn’t result fruitful regarding return on Investments. Business trips that Dijiwan invested money and did not return a favor were:
- Barcelona’s Mobile World Congress 2012
- Visit Lisbon
During these trips, regardless of all the investments made concerning funds, the company gained no returns- no contract signed, and no customers during these trips that cost heavy to the company.
Unbalanced Partnerships and Contracts Ratio
It ‘s hard for a startup to grow customers and raise funds for its survival. What all requires is a lot of struggle and efforts. To build clients and partnerships, Dijiwan granted many discounts to get customers on board. Also, the company worked hard to undertake a free work project for other partners to build stronger relationships and sign new contracts. Despite all the efforts, Dijiwan never earned a new contract, new customers or even partners. All the promises made initially were shallow, and no one came up with the commitments.
The free work they offered was never a free work for the company, for Dijiwan has to pay expenses for the company bills and salaries which in return, cost them more and never were free.
Every company, on the way to growth and success and motivation in the heart, aims to grab big clients- big companies and big investors. The products and solutions are designed with a broader vision to hit big customers, but a small company may face difficulties dealing with the big clients.
A big company takes a lot of time and follows a lengthy process before signing a business contract with the startups. This time, the duration is long enough for a small company to die some deaths. Hopes rises high in the hearts of startups when they aim to target big businesses. But the trust is, these big firms reached their positions without the support of these small enterprises and will never care to give a robust and quick feedback if they don’t find their product or service beneficial for them.
The Bottom Line
Concluding, the founders, and co-founders do not explicitly blame anyone for the downfall of Dijiwan. A startup always faces difficulties building its brand and building its identity in the market. The challenge is to struggle and make it to the heights you deserve to be despite all the difficulties.