Within the past month, I noticed a couple of articles about businesses voluntarily choosing to call it quits that are worth highlighting. Businesses go bust all the time and in many cases either quietly wind down and dissolve because they weren’t profitable or get run through the wringer of bankruptcy process to sort through who will salvage the parts worth saving. The situations with Bling Nation and Google Health are interesting and contrasting variations on the usual tale because these undertakings didn’t truly flame out.
Google’s decision with its Google Health is the more traditional of these two stories. As reported yesterday in the NY Times, the effort to gain traction with consumers adopting electronic health records was fraught with challenges. This was best summed up by an analyst at IDC Health Insights by her observation that “Personal health records have been a technology in search of a market.” So, sometimes the lesson that even major enterprises learn is that even with a boatload of financial, technology and people resources to throw at a business venture success is not assured and sometimes the best thing to do is just accept this and move on.
Bling Nation’s decision is more interesting because it’s less typical. The company is (was?) an early stage mobile payments services provider that had raised a significant amount of capital (over $33 million) to execute its business plan and had gained a significant following among both target consumers and community banks. Blig Nation was among the first to deploy near field communications (NFC) in connection with mobile payments. The American Banker on June 8 ran an in-depth story about the company and its Achilles heel, which seems to have been tying use of their widely praised payments solution with a mobile marketing solution called FanConnect, as to which both banks and consumers balked because it was seen as an unwelcome obstacle to the desired mobile payments solution the banks had already been using with success. Result: banks started dropping the service causing an abrupt comeuppance of sorts for Bling Nation.
So, in a gutsy move that may have been dictated as much by realism and necessity as anything, Bling Nation chose to press the reset button by temporarily suspending its service and regroup. Matthew Murphy, the company’s General Manager noted, “We found it easier to pause and fix [our business model] than try to tweak and market.” While there are frequently second chances in business and, to its advantage, Bling Nation has substantial capital in reserve for a “relaunch” if that’s what it decides to do, it will be interesting to see whether its lost footing can be regained.
Both Google and Bling Nation are also notable examples of the adage that innovation often requires not being averse to the risk of failure and the key is to learn from the missteps and then go in a different direction (as with Google Health) or recalibrate (as with Bling Nation).