Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

Berg

Commercialized cloud services for hardware innovators

General Information
Category
Design
Country
United Kingdom
Started
In 2005
Business Failure
Business Outcome
Shut Down
Closed
By 2014
Cause of Failure
No Market Need
Founders & Employees
Number of Founders
One
Name of Founders
Matt Webb
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
1
Total Funding Amount
$1.3M
Number of Investors
2
Description

Berg was a cloud platform on which Little Printer, an Internet-of-Things device, worked on. Berg allowed users to print out interesting news from the web, social media, etc. across devices. Little Printer looked like a receipt printer but could be used as a social letterbox, targeting mainly families. It produced little retro style printed papers that could be used for various purposes. The competitors of Berg’s Little Printer were Turtle Mail, Ink and Memo Bird.

Cause of Failure

Berg had an interesting journey from the boardroom to folding the business; they tried to change their business model a couple of times halfway through it but to no avail.

Besides the fact that the product that they created served a very limited market need (if ever a need was there) paper consumption and the creation of waste was an element that turned many people that cared about the environment away.

Berg’s little Internet of Things device had a small group of supporters, which, while loyal, could not convert into a sustainable way to maintain and manage the business. People also argued that the advertisement put out by Berg failed to show how the little printer working on the Berg platform could improve users' life. It was, objectively speaking, more a luxury item/toy rather than a device that anyone would need.

While print newspapers are struggling to continue their existence, it was hard for Berg to convince people that they needed the Little Printer in their homes. Moreover, publishing content through the Little Printer would need to weigh in the design factor of the publisher’s needs. Only certain type of contents could fit on the receipt-size paper the device could print. Also, because of its size, the commercial sector would not be that interested in it.

However, people can be irrational and buy products on a whim only because they are cute and “new” but the price tag given to Little Printer made the product even more difficult to sell. Berg’s CEO also admitted that one of the main reasons for his company's failure was that they priced their products at above the level of consumer’s willingness to pay, $259; pretty expensive for a toy.

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