Startup Lessons: Lexumo CEO on Why the Cybersecurity Firm Shut Down
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graciously agreed to honor various contracts and move our customers over to their platform. As far as I know, this was successful.
X: Any lessons from what happened?
DM: At the time I joined, I was enjoying some time off between startups with little opportunity cost and my eyes wide open. There was definitely a lot of upside to the business if the technology reached its described potential. However, I knew we had technology risk and potential problems with the size of the market. A key part of my job was to help our investors make a realistic assessment of the value of the business, and I think I did that. Certainly, I could have made changes to the team and done things differently that would have improved certain aspects of the business (particularly around identifying technology issues sooner). However, I think the market factors and IP/licensing issues would have remained huge stumbling blocks for us.
A couple of lessons, moving forward. If I choose to join another startup (rather than start my own), I will spend a lot more time up front figuring out if the team has the requisite skills to build the system/product. You only get one shot at this in your initial financing round. If you don’t do it exceedingly well, you are in trouble. There’s no learning on the job in a technology startup, and that sets a high bar for people building pretty much anything other than a mobile/web app.
I would also spend more time discussing market sizing with the board, regardless of the long-term potential. In Lexumo’s case, it was easy to get blinded by IoT (“It’s going to be huge!”) because I could never make the math work on how we were going to be huge focusing on it. Ultimately, for any good idea, it is still all about timing. We were early in a small market and late to a big market.
X: What’s next for you?
DM: I’m currently very excited about a potential startup in the [application programming interface] management and compliance space. It’s like the “Wild West” again for IT managers, trying to figure out what’s going in and out of their organizations through APIs. And the use of APIs in business is growing at a phenomenal rate. I’m working with an old colleague from my days at Shiva Corporation, who has built some fantastic technology in this space. Just need to go out and raise some money and get back in the game.