Bawte

What did it do?

Bawte was a Des Moines-based mobile app and web platform; users built their own product catalogue by scanning the barcodes of things they had bought. The app attached user manuals to products, sent alerts before warranties expired and when recalls were issued, and offered in-app live support for broken products. The company aimed to make its money by building an after-sales relationship between brands and their customers in the retail channel.

Why did it shut down?

Bawte launched in May 2012 as an app built around consumers sharing what they had bought, but it never found a clear revenue model. In February 2014 it was rebuilt around after-sales customer service; that year it joined Techstars Boulder, and in October it won a $100,000 investment at the Rise of the Rest Des Moines competition. Yet although corporate customers signed up, very few connected the product to their own systems; implementation was always pencilled in for 2016 or 2017. Going direct to consumers, meanwhile, looked unprofitable once the cost of acquiring customers was combined with the cost of continuing to serve them. In March 2015 the team decided to shut the company down rather than take a new funding round that was within reach, concluding that at the end of a new 12-month runway it would not be in a much better position than where it started.

The story

The idea for Bawte was born the moment John Jackovin threw away the product registration card for a Yamaha keyboard he had bought for his daughter. Jackovin imagined a system that would let people register what they bought with their phones and connect directly with brands. Bawte, which he founded with his long-time business partner Tom Love, launched from Des Moines on the App Store and Google Play in May 2012. The first version was built around users scanning barcodes or QR codes to share what they had bought on social networks, and it was free for brands as well as consumers.

When that model failed to open up any revenue, the team rebuilt the product from scratch in February 2014. The new Bawte let users catalogue their purchases, find user manuals, get alerts about warranty expiry and recalls, and use in-app live support for faulty products. The new focus drew attention: in summer 2014 the company joined the Techstars Boulder programme, and in October 2014 it took first place at the Des Moines stop of Steve Case's Rise of the Rest tour, winning a $100,000 investment.

The real test came at the sales table. Corporate customers signed up to Bawte, but very few connected the product to their own systems. When Jackovin took off his salesman's hat and talked frankly with customers, he found that 2016 or 2017 was always mentioned as the time for implementation. The problem being solved mattered, but it was urgent for no one. Going direct to consumers did not seem to make sense either, because of the costs of acquiring customers and continuing to serve them.

In March 2015 Jackovin announced that he was shutting the company down rather than take a new round, a large part of which would have come from a Des Moines investor. His reasoning was clear: at the end of a new 12-month runway, the company would not be in a much better position than where it started. In 2016 Jackovin founded BREWD, which builds software for brewers.

Lessons for founders

• Measure customers who sign up separately from customers who actually use the product; a customer who signs up and postpones integration is showing politeness, not demand.
• Test early whether the problem you solve is urgent for the buyer; a nice-to-have product always ends up behind mandatory projects such as ERP on the corporate calendar.
• Taking the investment is not always the right call; if you can see you will be no better off at the end of the runway, closing in time protects investors' money and the team's years.

Sources

1. Bawte aims to bridge gap between consumers and businesses (Silicon Prairie News, 2012-05-22)
2. Bawte Helps You Catalog And Take Care Of Your Stuff (TechCrunch, 2014-02-26)
3. Bawte snags $100K investment from Rise of the Rest DSM stop (Silicon Prairie News, 2014-10-09)
4. Saying Goodbye (Medium (John Jackovin), 2015-03-29)
5. BREWD software makes business decisions less filling for breweries (Silicon Prairie News, 2016-12-09)

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