Internet of things startup on switching technology
Lumos was an Internet of Things startup that sought to provide customers with the ultimate smart switching technology. The first-time entrepreneurs who came with Lumos wanted to create internet-connected devices that used machine learning and could adjust and personalize home appliances settings based on the behavior and routines of the user.
Lumos had to shut down in
less than a year and the founders recognized that they “were not the right team
to build a hardware company”. The founders admitted to at least seven major
problems that lead to the downfall of the company.
First of all, they were
working in a sector in which they had no expertise in. They’ve also
overestimated the utility value of the product and somehow disregarded the fact
that the product needed to be sold about five times higher than the production
costs to be profitable. Instead, they had designed a product that would not
have been by any means cost-effective.
Lumos had no customer
persona it could target its marketing to and the startup ended up trying to
sell the product both as an energy saving device and a luxury utility. The
founders tried to make Lumos make too many things too soon driven by the
illusion that often blinds inexperienced entrepreneurs that they were smarter
than the rest of the lot and could beat their competitors easily. And to top it
all, there was a lack of communication and transparency between the startup
team towards the late part of their venture. They started to keep their doubts
to themselves instead of working on solving them.
Most of the reasons that
caused Lumos failure could have been avoided had the founders sought the
counselor mentorship of an experienced entrepreneur or business analyst early
on. But then again, maybe they were supposed to learn each of the lessons that
the journey presented them with on their own skin so as to be better prepared
for the launch of their next startup.
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