PaySail, well…no longer sailing.
Startup life can be extremely hard. There will be lots of nights when you stay up late and still need to wake up early the next morning. You’ll sometimes wish you have more than 24 hours in a day to be able to execute all your plans. Despite all the hard-work and passion to succeed, startups sometimes fail. Failure is a word we all hate but it happens sometimes.
My experience with startup failure was my first startup, PaySail. PaySail sought to make the payroll and compliance process blissful for modern African businesses with features like automating tax and social security calculations, generating payslips, enabling payment and many more. My co-founders and I were ebullient about our prospects to succeed and we put in all the hard-work to make this possible. We generally had very good times but eventually had to close the shop.
One of the main reasons for our failure was the lack of understanding of our target market. Startups are usually encouraged to understand their target markets and create a unique value propositions that this market will latch on, unfortunately we didn’t do enough validation. Our product was fully online and that was problematic for businesses when we started selling to them. The smaller businesses sometimes didn’t have internet connections and the bigger businesses already had existing solutions.
Additionally, most businesses in Ghana did not care much about paying income tax and social security. Most businesses pretty much avoided paying taxes and the ones who did already had something going for them. It was heartbreaking to make so many cold calls and send emails to always get rejections. The few demo opportunities we had all ended in “we will call you back when we make a decision.” This hardly happened.
The final factor for failure will be our business model. We started with a freemium model where we encouraged businesses to use our product as a free-trial for a few months before the businesses convert to become paying users. This didn’t work out for us. Additionally, we struggled to identify the main person in the organization we should target and sell PaySail to. We envisaged our product as one for the accountants to use hence we reached out to accountants. These accountants will generally give us a good reception but will never sign off the deal; and it was always difficult to meet the boss in charge.
After over a year of building a product and selling, we had to shut PaySail down. It was obviously a melancholic moment but the lessons we learnt are extremely valuable for new startups. Startups should spend a considerable amount of time understanding their target market and should build a product that the target market finds enough value in to pay for. Once you are able to find a product-market fit, you will definitely increase your chances of startup success.
Osborn Kwarteng Adu was the Co-founder of PaySail and currently forms part of the engineering team at mPharma, a B2B venture-backed startup that makes prescription drugs in emerging markets easily accessible and affordable. His company has partnered major pharmaceutical manufacturers, insurance companies, financial institutions and governments to deliver medicines directly into the hands of consumers in those markets.
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