This week, Colorado Springs said goodbye to five startups.
Representatives from AugSense, Avium, GetOutfitted, Space Mission, Nosh and Bahuka spoke candidly to attendees at the 3rd annual Business Wake Nov. 1, organized by Epicentral Coworking and Peak Startup. The event provided the entrepreneurs with an opportunity to teach others that failure is OK — and for some, the event provided a sense of closure.
Some of the startups were around for a couple of years and others only a few months. One startup owner, Curtis Holsinger, found out last week that his business had come to an end.
Holsinger, co-founder of AugSense, said he wanted to fill a need he didn’t see being met. Using augmented reality technology to heighten senses, Holsinger wanted to help people with disabilities, like his sister, who is visually impaired.
Though Holsinger had a lot of support for his startup idea, it wasn’t enough to financially sustain the business, he said.
“It’s great to know you have all of this support, but support doesn’t feed you, it doesn’t pay your mortgage,” Holsinger said.
You have to treat your startup like an actual business, not an idea, he added.
“If you don’t have a monetization plan, you will not succeed,” Holsinger said. “A startup is a business, it’s about making some form of money.”
Without enough funds, even for startups that had a successful run for several years — like GetOutfitted — businesses can still fail to make a profit.
GetOutfitted, a high-end ski and snowboard rental company based out of Colorado Springs, served customers in all 50 U.S. states and in 15 countries in the four years of operation.
According to GetOutfitted’s website, “The company is dissolved and its assets have been liquidated for the benefit of creditors.”
Julian Flores, CEO and founder of GetOutfitted, said at the wake that while the startup was six months away from being cash-flow positive, the company ran out of capital before moving on to the next season of growth.
“When revenue stops for a season, that’s when it gets tough,” Flores said.
By the time the company sold, it had made $2 million in total revenue and was working at a 70 percent gross margin by the 2016-17 ski season. But GetOutfitted was unable to get the next level of resources it needed, Flores said.
“We needed a big capital infusion,” he said, “If we [didn’t] hit a $1 million investment in one check, we should have paused.”
Debt is not a good instrument for startups to work with, said Flores, who has no plans to revive the company in the future.
Sarah Arnold, marketing director for Blue Star Group, the umbrella company that owned the eatery Nosh, said it’s important to build a brand around a product, not people, which is what the company did in the two years it was open.
In that short time, the restaurant that had been located in the Plaza of the Rockies saw four head chefs and five general managers, Arnold said.
It creates a toxic environment when you hold onto managers who negatively impact a business, she added.
“You can only do CPR for so long,” Arnold said. “At some point, you’ve got to call it.”
Ideas for a new restaurant to take Nosh’s former location are currently in the works, she said.
Editor’s note: Read more about the Business Wake in this week’s print edition of the Business Journal.