Photo by Michael Bohanes

On his blog, company co-founder Michael Bohanes describes the failure of his first start-up, Dinnr, and shares lessons from his experience. The company offered same-day delivery of all the necessary ingredients–pre-measured and ready–from a recipe that customers could select online. Mr. Bohanes blames a poorly constructed value proposition for making success infeasible. Furthermore he warns of the perils of poor market research, which can give an ambitious entrepreneur false confidence.

Because of the size of his company there are no other sources from which to gain perspective, and therefore it’s difficult to dispute or deny his conclusions. Whether or not operational or strategic mistakes contributed to the demise of Dinnr is unknowable given the available information.

Thus, the surest factor in failure was his decision to found a business based on what he knew and liked, rather than identifying a need that could be filled by a service he was qualified to provide. His market research further undermined this process, by conducting face-to-face interviews with direct questions, which led to sympathetic answers from participants, rather than extraction of valuable underlying information.

Together, these two errors convinced him that he had found a value proposition married to an untapped market. In actuality, he was relying on tenuous research and non-specific customer segments, to support a passion, rather than a business.