Bankrupt crowdsourced invention platform Quirky had deals with companies including General Electric and Mattel, but it also burned through cash before figuring out a business model that could make a profit. One thing Quirky seemed to have going for it was its visionary leader: CEO and founder Ben Kaufman. He had become a regular in the press as an affable pitchman for his lineup of quirky inventions.
"Investors and the press have leaned toward the vision, not the leadership experience with a product or service," Levick's Hillmann said. "There are far too many companies not looking beyond their nose, and that's what gets them in trouble."
Any start-up that wants to stay ahead of problems needs to be able to provide a sound two-year business plan and model its business over five and 10 years as well. In some cases, founders make good CEOs throughout the growth cycle, but at many companies, growing the smart way means bringing someone on board to put in checks and balances.
Matthew Bird of 1-800-PublicRelations, who has done PR for Skully, asked, "How does a company that raises millions and is a top crowdfunded product on a platform not deliver?" Bird helped out by providing some answers to his question:
1. "Stubborn entrepreneurs so wrapped up in their idea, they thought that it was the most important thing, not shareholders."
2. "Young entrepreneurs acting like idealists who didn't care what anyone else thought."