Lessons learned after shutting my IoT startup

After 5 months of toiling 14-hour days, making a hardware IoT product from scratch and spending thousands of dollars of OPM (other people’s money), I and my two co-founders woke up with a jolt.

Dreamy eyed noobs we were and made tons of mistakes

It suddenly dawned on us that our product would not sell. And unless we did something about it, the startup was doomed. This was December 2014. Dreamy eyed noobs that we were, we made tons of mistakes. I hope this post helps you avoid some of those mistakes because as much as we glorify failure in the startup world, it does hurt. A lot.

July 2014

Let me back-track a few months to give you some background. In July, we started building smart internet connected switches that learn from user behavior and automate all the electronic appliances in a home.

We felt that it’s a pity that our search results and news feed are personalized to us but our homes, where we spend most of our time, are not. We had a vision that our switches will learn and personalize the electronic appliances in a home to its owner. We decided to name the company Lumos. (yes, I am a big Harry Potter fan!)

It’s not (just) that investors are lazy. An unclear pitch is a failed pitch, and failure at this task predicts failure in your startup.

— Paul Graham (@paulg) March 13, 2016

We took some pre-seed investment from an angel investor and headed off to our alma mater IIT Gandhinagar to get incubated. We converted a lab into our office space and the Lumos saga started!

We built like crazy. That’s the thing about us engineers; if you give us something interesting to build, we will forget everything else and just build. Our first prototype, which automated lights, was ready in 45 days. The second prototype, which could automate lights, fans, ACs and water heaters was out in another month. This is really fast according to hardware standards.

November 2014

In mid-November, we got a product designer on board to design the final product. In December, we were already in talks with investors to raise the next round of funding. We were on track to have a market-ready hardware product in less than one year. We were pleased with ourselves. The investors were pleased with us. Life was a bed of roses.

December 2014

Until it was not. We had underestimated the work that goes into making a market-ready hardware product. We had overestimated the demand and utility of our product.

Now that you have some background, here are the top 5 mistakes we made in Lumos and what we learned from them.

Mistake 1: We were neither experts nor target users of the product that we were building.

Mistake 2: We did not do the due diligence on the idea before we started building the product.

Mistake 3: We let sunk cost bias affect our decisions about pivoting.

Mistake 4: We were trying to do everything for everybody.

Mistake 5: We underestimated hardware.

Today.