A quick search on Quora reveals a thoughtful, detailed answer to the question "Is there any startup that failed first but later another team relaunched it and succeeded?". MySpace and Friendster made great strides in social networking, but Facebook got it right. Apple created the tablet craze with the iPad, but Microsoft launched the concept to little fanfare and adoption in 2002. The electric car? There is a graveyard filled with ideas, and a visionary rebellious entrepreneur we credit with popularizing the idea, again.
Entrepreneur, Kurt Workman entered another of those been-there-tried-that markets when he was about to start his own family and he was watching his aunt take care of her premature twins, constantly wrapped in worry and stress. He thought to himself, "Why doesn't something more exist in the home for parents, so they can really know their baby is OK? It just seems like there should be something better for parents." Kurt is now the CEO and co-founder of Owlet, empowering baby monitoring with pulse oximetry--that little red light hospital's clip on your finger when you go to the hospital.
Here's a bit of background on the "ruined" market Owlet: In the 1980s and 1990s, studies were done that said, while deemed "inconclusive, using at-home monitors leveraging pulse oximetry are not effective in preventing infant deaths from suffocation" (according to the CDC, unintentional suffocation was the No.1 cause of death for children under a year of age). These studies created the mentality and belief that it was a set-in-stone conclusion that pulse oximetry and at-home monitors couldn't be used to solve the infant suffocation issue.
But technology and cost has changed since the 1990's, hasn't it?
Embracing the change the world entrepreneurial spirit, Kurt recruited a team believing it could build something more advanced than what existed in the 1980s. And they may have succeeded in conquering this "ruined" market: the Owlet team has taken hospital technology and made it both accessible to the public and appropriate for monitoring in the home--keeping it wireless, wearable and functional (and at the fraction of the cost).
Q: Why pursue something that has been tried, without success?
Kurt: This is why we believe innovation happens when you cross verticals. Owlet's founders had previously worked in tech product development, so when we approached the issue, we looked at it from a very different angle than someone in the medical space would. We didn't fall into the trap of "oh, that's the problem, but an old study said it wouldn't work, so obviously we can't fix it." Drawing another parallel to the electric car space--after Fisker failed, it wasn't a GM or Honda, or another company in that industry, that came out next with the solution. It was Elon Musk, a guy who didn't work in the car space, but a totally different industry. Real innovation can happen when you come from a different vertical.
Q: How do you pitch a "failed" market opportunity to investors?
Kurt: To be honest, you talk to a lot of investors. For us, it meant talking to to 50+ investors, with only four investing at first. It was difficult raising our first round, but our second round was much easier because at that point, we'd proven certain components of our pitch and could show we could do it. Peter Diamandis' quote is one of our favorites: "The day before something is truly a breakthrough, it's just a crazy idea."
(Note: Owlet has raised $1.85M in their seed round and $6M in a Series A, for a total of almost $10M including a grant from the National Institutes of Health (NIH)).
What are the lessons for others who see opportunity in failed attempts? Jordan Monroe, co-founder of Owlet offers up these three suggestions:
- Trust your own opinion. It's easy, especially when you're new to an industry, not to trust it. There are a lot of reasons you're probably wrong, but also some that you're right. If you really believe in your own opinion, trust it. Don't get swayed or distracted.
- Unhinge old assumptions. You can start on new ground and not be hindered by those. It's OK if you come to find those assumptions are true, but at least start fresh at the beginning so you can find out for yourself.
- Let the data speak for itself. It will tell a story.