Closing a startup: Our story

Recently our team decided to close a startup project we all very much enjoyed working with. It was a marketplace platform for pre-purchase used car inspection connecting experts and buyers directly. The project went on for two years and was an inspiring journey with a pre-launch campaign and great traction at the start, a product pivot due to pandemics, and, finally, a timely shutting down.

In this post, we are reflecting on what we’ve learned with this case and thinking of things that we’d, perhaps, have done differently if there was an opportunity to start over. We’ll also share why this was a positive experience, after all.

What was CheKit?

The initial idea behind CheKit was to help buyers make verified purchases of used products. The platform was to match customers directly with experts in the car industry, real estate, and technology. One of the key advantages of using the platform was the ability to check any significant purchase in any location and get unbiased feedback on the chosen product within hours. The Ukrainian market was selected as a target for the start, but we had global ambitions as well.

Pre-launch campaign, MVP, and product pivot

Before building anything, we arranged a pre-launch campaign. We emailed experts from several segments with an invitation to register on our future platform and received more than 1K positive replies. A good sign – we thought and focused our marketing efforts around the value CheKit brings for experts: the ability to promote their businesses and get an additional income source.

We assembled a dedicated team and launched product MVP in about 3 months. The timing was not perfect as we faced covid pandemic along with many other startups globally. Still, we continued promoting the platform, treating new conditions as an opportunity because buyers started to shop online more, and considering pre-owned products was already a common practice. As we received little traction from real estate and technology segments, we focused our efforts on the automotive industry.

This is how CheKit became a service that allowed buyers of used cars to get the cars inspected in different locations and receive extensive reports on their tech condition. For tech experts, which included auto-mechanics usually, the platform offered additional placement where they could promote their services. The website received great organic traffic from the specialized blog we started.

Winding down

As we started to dive deeply into the automotive industry and explored customers’ behaviors when buying pre-owned cars in our target location, we saw little opportunity for us to grow. People weren’t ready to adapt to the new pattern: go online looking for a tech expert in the necessary location and then pay extra to get their cars checked by an inspector. They either bought cars from people they knew, worked with trusted dealers, or got the mechanics they know to do the inspection. The segment of those who were about to buy their first used auto and were the most likely to use the platform was rather low.

After a detailed business analysis, we never moved further than an MVP step and made a decision to switch the team's effort to another more promising startup product we also market.

What we could have done differently

We had several retro sessions with an analysis of our ups and downs working on CheKit. Here are the main points we’ve learned from initiating, designing, developing, and launching this project.

• Narrowing segmentation from the start

The initial idea was to help with inspections of a wide range of products including real estate, household appliances, vehicles, bicycles, motorcycles, and more. Our product development and marketing efforts were rather scattered at that point. Perhaps, if we worked with the automotive industry from the start, we could see there is no market fit for such a service much sooner, as minimum as during the pre-launch campaign.

• Customer development framework

The customer development framework should have been applied during the first product development steps. We started with this a bit too late. For a marketplace platform, the customer development process should work in two directions – both for sellers and buyers. It would help to understand user behaviors, see problems they spot on the way going through a particular situation (buying a pre-owned product, in our case), and discover business opportunities (if there are any).

• Focusing on demand rather than proposition

Instead of focusing on experts we were to bring to the platform, we’d better have directed our resources to bring buyers who would order an inspection on the platform. And this would show us how much of it we had to spend bringing a specific number of orders to the platform. If we start with a similar business model in the future, we will see these dependencies more clearly.

What we will continue doing

Was it a purely negative experience for us? In fact, with startups, it never is. With more successful products and projects with less luck, you get some negative experiences, learn things that bring lots of value, and you take them with you further.

• Pre-launch campaigns and building MVPs

Both of these steps helped us make data-based decisions on further product development. We are happy that we didn’t invest more to boost a project that would never become profitable.

• Selecting relevant tech stack

When building an MVP, we selected technologies that allowed us to launch a platform MVP in 3 months. In most cases, relevant tech choices in MVP development help to avoid over-engineering and minimize time-to-market.

• Iterating and pivoting

The lean startup methodology we adopted with CheKit helped us continuously improve the platform, get user feedback, improve UX, and pivot the product when we got little or no traction.

Where are we now?

With some time to reflect on what we didn’t accomplish, we now focus on the experience we’ve received. We think it was the right timing for us to close the project, and the capital and resources we invested to test this hypothesis were minimal.

Today, we are mainly focused on providing dedicated engineering teams for our clients and continue building great products for global audiences with them. We openly share our experience of building in-house products and still believe we’ll ship our own big project one day.