The Lily afterthought
Yesterday was a sad day. Lily Camera, the autonomous camera drone company, officially announced its closure and offered to refund to their pre-order customers. Two years ago, I met Antoine and Henry, two young, smart and idealistic co-founders who tirelessly worked to complete their prototype in their dorm room. Despite the lack of money and hardware experience, they possessed within them a youthful fearlessness that has sustained them to this day.
Their crowdfunding video and campaign led to an unprecedented $50 million in pre-sales orders, which reigns as the highest-grossing product through crowdfunding’s history. But for a company to succeed, it isn’t enough to just have determination and creativity. Ultimately, it boils down to the nature of business. The so-called two-years-to-a-$10-billion valuation or three-years-to-go-public is hype believed only by those kept in the dark. For Lily to produce such an ideal autonomous flying camera, they would require the perfect machine vision and image capture software, the perfect unmanned aircraft balance, control and waterproofing technologies, industrial design, supply chain management, mass production control as well as a large capital infusion. Success or failure also correlates with the founders’ management approaches and character. As an investor and friend, I could only stand by the founders through their journey, and accept and support their decision.
For entrepreneurs and investors, allow me to share some thoughts of encouragement:
1) In Silicon Valley, many startup founders accumulate a sense of entitlement specially when under early stage investor spotlight. More importantly, while in pursuit of temporary high valuation, founders may compare the equity they are giving up and end up rejecting funding that could help catapult their companies to the next level. Do not underestimate the value of capital. The funds needed for development are always more than you expect, especially in the hardware industry. R & D production costs are two to three times higher than what you initially predict.
2) Who the lead investor is isn’t as important. What is more important is whether he or she can give the time and wisdom to guide the CEO way before problems emerge, and to help him navigate and steer the company to success. None of us is perfect. The best investors can step in at critical times and provide value. In this case, I know of the dedication and hard work of some of Lily’s Chinese investors.
3) Whether you are a venture capitalist or a founder, you should pay attention to who is setting the trends, especially in the hardware industry. Industry giants should not be overlooked. And it is imperative for smaller companies to learn to be faster, better and more creative.
4) What I’ve learned since joining the early-stage venture capital industry is that who I am is not important. What is important is the work I do for our founders. Finally, to my LP and to those who have extended a helping hand to me and the Lily founders, I’m deeply grateful!
(Statement above are my personal feelings, and does not represent any organization or other persons)