skim.com the story of a failure, lessons learned

Balz Roth Balz Roth PartnerPartner

the story of a failure, lessons learned

communicating products

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The Concept

‘Communicating Products’

000 001 @ skim.com

•Every product made by skim.com is branded with a unique number.

•Every skim.com number stands for an individual email address on skim.com.

•The skim.com communicating products USP is the basis of skim.com as a brand and as a community.

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The Company

What is skim.com?

• A communication-based lifestyle brand.• It produces lines of clothing under its skim.com brand and manages an online community

to which it offers targeted content, entertainment and communication tools.

Achievements

• Launch: February 2000• Venture financed: CHF 4.5m in total • Total Sales in 2000: CHF 1‘000‘000 • Online Community: 120‘000 registered users• Employees: 45 within 3 month after launch• Retail: Own fashion line, served 250 retails stores worldwide• Flagship Stores: 2, Zürich, Davos• Online: Online community, blogs, games, free email, sms-service,

E-commerce • Magazine: 2 issues within 6 month• Music: Final negotiation stage with BMG and Sony

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Positioning

Target Group

• “Young Urban Affluent Creatives”• Males and females between 18 and 30 years old from cities around the world.• Highly influenced by opinion leaders.• Working in creative professions: media, marketing, design, architecture, journalism.• People who like to spend on fashion and modern communication and concepts.

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Opinion leader marketing

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Worldwide press coverage

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Worldwide press coverage

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Worldwide press coverage

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Chronology of events

1998/99 - Development phase• Concept development, fund raising, IT development, pre-launch

2000 Q1, Q2 - The excitement phase• Launch, second round of VC financing• Grow to 45 employees• Launch of several minimal viable products in parallel (Fashion line, retail,

e-commerce, flagship stores, online community, print magazine, music)• Huge media presents

2000 Q3, Q4 - Things turn sour• Internet bubble bursts, Financing gets difficult• Reduce team, spin-off units (Marketing, IT, online-media)

2001 - Clean up the party• Nachlassstundung (Kind of chapter 11)• Reduce team to 4, last 6 month me only• Close the company

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Lessons learned

Business model• Difficult mix of several business models (Online/communication, retail,

products). Each field needs different expertise and attracts different investors• To much distraction, to little focus (Doing one thing right)• Did to many things “our way”, not industry standard • Consider the consequences of being disruptive (e.g. fashion cycles)

Team, hiring• To much hiring friends with to little focus on real need• Find “projects” for early employees instead of letting them go• Difficult to align interests of 40 new employees in such short time• Leadership is very different when things turn sour

Financing• Round is closed when cash is on the account • Spend carefully • Cash is king

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Would I do it again?

YES

A very painful, expensive but instructive experience of which I profit still today … not financially so ;-)

Questions?

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Would I do it again?

Thanks

Balz Roth Business Angel and Startup Coach