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How.Do Falls Victim to the Berlin Growth/Investment Vicious Circle

How.Do Falls Victim to the Berlin Growth/Investment Vicious Circle

It was a good concept – provide a platform for users to post clear and simple methods for doing stuff. And How.Do, an idea born in Sweden but nurtured in Berlin, found a willing community here in the German capital. But last week the startup became yet another which has struggled to maintain the growth needed for attracting the necessary investment, and closed down.

First off, let me say I always liked How.Do – and let me quote some text from a previous article about them to explain why: “How.Do enables users to post tips and tricks of how to finish a task successfully using a series of pictures and explanatory commentary; be it an outfit pimping guide or all you need to know about peeling an egg. We use it ourselves at Silicon Allee – it’s an idiot-proof favourite of the more tech-minded for explaining basic things to the rest of us – which we like to think is usually a good sign.”

Unfortunately, last Friday a message was posted on the How.Do website informing the community that the platform would be closed down. In total, 1.7 million ‘learnings’ and over 7,000 projects were created by everyone from teenagers to professionals.

The post described how the startup – which was founded in 2012 – was created with the aim of find a “fun, more human way to share the knowledge of how we make things.” With that aim having been largely realised, the next goal was to “transform that passion into a sustainable platform. We have failed to make this possible and without the resources needed for development, today How.Do comes to its last step.”

Emma Metcalfe, How.Do co-founder alongside Nils Westerlund and Edward Jewson, told Silicon Allee this week that they had been looking to find traction with young creatives and the DIY scene: “We simply found traction and saw the impressive part of our community growth too late to bring in new capital soon enough. VCs, regardless of which side of the pond they’re on, are understandably always happier to see those hockey stick trends for a longer history. If you do the work-back, we needed to see our rapid growth phase starting end of summer rather than late autumn.”

It is rather a shame, as the trio had put together a good team and attracted some early investors but, as Emma added, “without the resources to push the boundaries of the space we had to ask ourselves some questions.”

Keeping with the spirit of the How.Do community, Emma is looking on the bright side – “We learn, we get better, apologise for our failures and celebrate what we did right and what the community created” – but the news is another blow to the image of Berlin as a place to grow a consumer tech startup.

Perhaps it was always going to be a challenge to turn How.Do into a viable and growing business, but the truth is that there is a bit of a vicious circle in Berlin – available talent and early-stage investment as well as initial growth mean you can get your startup off the ground, but it’s exceedingly hard to break through the growth barrier to the next stage, which mean it’s nigh-on impossible to attract the money you need to continue your growth.

Let’s not be too pessimistic, though. There are startups who have broken out of this cycle, and the odd bit of failure never hurt anyone (too much, anyway). But perhaps we should all be thinking a little harder about building revenues rather than just users?

About David Knight

David is co-founder and Editor-in-Chief of Silicon Allee. Originally from London, he has lived in Berlin for over seven years, having previously worked for news portals including Bild.de and Spiegel Online before helping to found Silicon Allee in 2011.

2 comments

  1. A project that doesn’t make money needs money, but no one will give it some money because not enough people use it. There is nothing wrong about that. Some things are not meant to be VC-backed startups, let alone startups at all.

  2. Agreed – not everything new “thing” should try to go the VC-route. If also people from “within the ecosystem” stop thinking about that as their first and foremost option, we will see more successes.

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