Wantful

What did it do?

Wantful was an online gifting and e-commerce service that offered personalised product recommendations based on the tastes of the person receiving the gift. Working through its website as well as an iPad app, a printed magazine and in-store products, the company shipped orders directly to customers through a network of around 650 retailers.

Why did it shut down?

Wantful released well-received products but could not achieve the rapid growth curve venture capitalists look for in e-commerce. Its expansion from gifts into personalised shopping pitted it against many rivals, such as Wanelo, Wish, Fancy and Polyvore. Nordstrom, which had become a minority shareholder in 2013 and launched a joint gifting venture with the company, did not go ahead with a planned additional investment about a week before the closure. With no time left to find other funding, the company ceased operations on 6 September 2013 and laid off its 16 employees.

The story

Founded by John Poisson, Wantful went live just before the 2011 holiday shopping season. With teams in San Francisco and New York, the company offered users personalised recommendations based on the tastes of the person they were buying a gift for. About a year later it released an iPad app and a printed magazine; going beyond gifts, it moved towards a personalised e-commerce experience in which users could also shop for themselves.

Wantful raised a $5.5 million Series A led by Polaris Venture Partners, with Harrison Metal, Greylock Partners and Forerunner Ventures taking part; names such as Dave Morin, Dennis Crowley and Matt Mullenweg were among its angel investors. Orders were shipped directly to customers through a network of around 650 retailers. In 2013 Nordstrom became a minority shareholder, and the two companies launched a joint gifting venture.

The shift to personalised e-commerce, however, put Wantful up against a crowded field of rivals such as Wanelo, Wish, Fancy and Polyvore, and the company could not achieve the rapid growth investors expected. The real blow came when the planned Nordstrom investment fell through about a week before the closure. Nordstrom said it had met its obligations and that the company had not met the conditions. Poisson, for his part, said that after Nordstrom pulled back they had no time left to respond.

On 6 September 2013 Wantful abruptly shut down and laid off its 16 employees. Nordstrom provided $100,000 to support the employees. Poisson stressed that it is hard for e-commerce companies at later stages to achieve the growth curves venture capital looks for, and that it is not possible to expect a strategic partner to fund the whole business. Wantful's story shows how quickly funding tied to a single partner can turn into a cliff edge.

Lessons for founders

• Do not treat a strategic partner's conditional investment as a done deal; plan your cash runway as if that money will never come.
• Rather than expecting a single strategic partner to fund the whole business, keep talking to financial investors while the deal is in progress.
• Expanding from a niche value proposition into general e-commerce puts you up against far more crowded competition; strengthen your core product's growth data before expanding.

Sources

1. Personalized E-commerce Startup Wantful Shuts Down (TechCrunch, 2013-09-06)
2. Gift-Giving Service Wantful Shuts Down Suddenly (AllThingsD, 2013-09-06)
3. Online Gifting Retailer Wantful Ceases Operations (WWD)

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