A story of my startup failure offers a fresh perspective on how to approach problems as a founding team
In 2008, I founded my first e-commerce startup.
And it failed–epically.
I had an idea (born out of a personal want) for funky, high-quality, handmade women’s shoes that could be custom-designed online.
Instead of taking the time to do things I commonly did for the other companies I worked for — like writing a proper business strategy, conducting customer interviews to validate the idea, deep market research, and testing a prototype — I blindly dove in head first. I was SO convinced I was creating something everyone would want that I invested 10 months and most of my savings into a fully fleshed-out digital product and brand.
Then, instead of giving myself time to learn from my earliest-stage customers — what they liked and didn’t like, where they dropped off in the process, what they were willing to pay, and what they wanted from my product offering — I instead focused 100% on the solution.
I never clearly defined the problem I was solving for them.
So when a company that Forbes had just named the ‘fastest growing company ever’ wanted to sell my shoes in 3 major cities right out of the gate, I jumped at the chance. I am embarrassed to admit that I barely skimmed the contracts before signing them.
Thankfully, I didn’t accidentally promise to sell my firstborn child.
All I could think about was, “My company is going to scale, big time. I am going to be able to quit my day job soon and make a TON of money living the dream life as a successful founder.”
The company that gave me this first big break was Groupon.
Those of you who know Groupon may have heard how they make their money (or at least how they did back when they were in their prime). They make businesses cut their prices by at least 50%. And then they take 50% of the sale. So sellers only receive 25% of the actual product price (at best). Since my shoes were one of a kind and handmade in the US, this meant I would be paying for each pair of shoes sold.
I convinced myself it was a worthy marketing expense and bought into their promise of repeat customers.
Instead of selling what they had estimated to be a max of 50 pairs of shoes, I woke up the next morning and realized that we had sold almost 1000 in 24hrs. Reality quickly sunk in that I couldn’t fulfill the overnight demand and hadn’t even worked out all the kinks in my full customer journey.
Rather than propelling us forward, that deal took down my company before it was even given a chance to grow.
After a good 6 month fight of round-the-clock shoe cobbling and customer support triage, I eventually let go of my founder dreams. And for a while, I felt ashamed that I even tried so hard to embrace them.
If that feeling of failure is something you can relate to, where you’ve put your whole heart and soul into something only to feel unable to make it succeed, then I’ve got magnificent news for you.
That moment is required for long-term company success.
Failure is where you learn your most valuable lessons as a founder. The things that you’ll do differently next time.
My startup failed because I didn’t run it through critical UX checkpoints and processes at its earliest stage.
The irony here is that I was a UX/UI designer for my day job!
If I had approached my company with the same UX mindset and craft as I approached other large brands I worked with, I would’ve turned down that Groupon “deal” without a second thought.
I wouldn’t have gotten distracted by the short-term sale and instead would have focused my resources and energy iterating towards a long-term strategic foundation for my business.
I would’ve worked out the kinks before trying to scale overnight.
Most importantly, I would’ve seen that my customers — women who bought couture high heels in NYC and Washington DC— did not shop on Groupon!
Looking back, it seems so simple now that I can even laugh about it.
But those bootstrapping your startup know that when you’re in the weeds, hustling, working 8–6 for someone else, coming home and staying up all night to build your business, sacrificing time with family and friends, watching your bank account dwindle… it’s easy to cut corners or get distracted by short-term profit.
I was in survival mode.
And even though I hadn’t clearly defined it to myself yet at the time, I was solving a real problem.
Eventually, several years later — with more money in the bank, more experience, and much more support — I co-founded my second company with my husband.
This time, I stuck to what I knew best, team building and UX design. We built Gallardo Labs, a design agency that focused on providing lean diverse teams of UX/UI subject-matter experts to Fortune 500s and iconic brands. I have been running it with him for over a decade as CEO.
The more companies I work alongside and track outcomes for, the more aware I become of the tremendous benefits of investing in UX. I also notice a pattern that makes me question how we approach problems as designers at different company stages.
Most corporate leaders and executives working for very large, established companies invest in UX when a major business problem is to be solved.
For later-stage companies, UX designers serve as advocates for the customer, but they are mostly solving business problems, right? Sales are down. The drop-off rate is high. The customer call center is overwhelmed, etc.
For startup founders, on the other hand, UX design is about solving a problem for the end user in its purest form.
And only at the very start of a company’s life do we have the opportunity to prevent a business problem before it arises.