• Home
  • Latest
  • Fortune 500
  • Finance
  • Tech
  • Leadership
  • Lifestyle
  • Rankings
  • Multimedia

Trendingnow

1

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI

2

Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living

3

Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs

1

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI

2

Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living

3

Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
CommentaryEntrepreneurs

What Every Entrepreneur Should Learn From the Webvan Failure

By
Alex Bard
Alex Bard
and
Bethany Cianciolo
Bethany Cianciolo
Down Arrow Button Icon
By
Alex Bard
Alex Bard
and
Bethany Cianciolo
Bethany Cianciolo
Down Arrow Button Icon
March 10, 2016, 11:30 PM ET
Webvan Internet Grocer Files for Bankruptcy
391676 06: Webvan delivery trucks sits near a distribution center July10, 2001 in Carol Stream, IL. The Webvan Group Inc. the sole internet grocer is filing for chapter 11 bankruptcy protection. (Photo by Tim Boyle/Getty Images)Photograph by Tim Boyle via Getty Images
Add Fortune on Google for similar content.

The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How do you come up with a new startup idea?” is written by Alex Bard, CEO of Campaign Monitor.

In founding a company, you will experience both amazing and challenging experiences. For most entrepreneurs I know, this volatility is particularly noticeable in the first few years. After the initial rush of opportunity comes inflated expectations, which often turn into doubt and disillusionment. It is during this period that you need to decide to push through, pivot your idea, or quit.

Stewart Butterfield, one of the most successful founders of the recent tech boom, started two gaming companies before turning one into Flickr and the other into Slack. But it was only through the journey of each that he recognized it was time to do something else with his teams and assets. How do you know if your idea can turn into a viable business, or if it makes sense to focus your energy elsewhere?

Here are four questions that will help you determine whether your idea can be a real business:

What problem am I solving, and how am I solving it?
You should feel energized by the problem and inspired to solve it. If you find your conviction faltering, consider that a red flag. Without passionate leadership, a new company won’t last. It’s better to walk away early on and invest your energy elsewhere.

Assuming you’re excited about the problem and solution, engage your target customers and involve them in the process of defining your product and vision. Connect with a meaningful sample size to deeply understand their pain points, priorities, desires, and willingness to pay for your solution. If you’re not hearing that your product solves a salient problem they’re willing to pay for (this is specific to B2B companies), then your idea likely won’t turn into a real business.

My cofounders and I carefully considered this question when building Assistly, a customer service software company, in 2009. At the time, we knew that companies needed to invest in customer service, even during a tough economic climate. Getting in front of potential customers validated this need, especially for small and medium-sized businesses. It might not have been the sexiest idea, but it solved a big problem in a changing market.

See also: Here’s Why Even the Greatest Business Ideas End up Failing

Why should I do this now?
Knowing when to start a company is crucial for finding your market fit and determining whether you’re building a real business. Webvan, the online food delivery startup, was one of the biggest failures of the dot-com bubble. While there was some demand for food-delivery services in the early 2000s, the market turned out to be unsustainable. Over the last 15 years, mobile connectivity has exploded, resulting in a proliferation of delivery startups like Instacart, Amazon Now, and Google Express. The core concept hasn’t changed; rather, technology evolved over time to facilitate a viable market at a lower cost. These external conditions often dictate whether a company will be successful—so think critically about whether the timing is right for your business.

 

Am I building a business?
Building a company is inherently risky, and even more so in a tough economic climate like the one we now face. In order to raise capital and run a successful long-term business, you need to plan how to monetize the business. You may be solving a problem, but if you can’t ultimately monetize it, then you don’t have a real business.

After the customer-discovery phase, focus on the unit economics —the expense to acquire a new customer and the revenue your product can generate on a per-unit basis. This calculation will help you understand if you have a great business or just a neat idea. You’ll continue to need the passion of your earlier days, but nailing your key metrics could make the difference between a crucial funding round and a prolonged grind.

What would you do in my position?
As you would with any major decision, consult people you trust. Talk to your cofounder first, then seek input from advisors who have a more objective point of view. Beyond your investors and board members, other entrepreneurs can shed light on their experiences. Look for those who are about five years ahead of you in their entrepreneurial career, and ask what they would have done differently, or what they’d do in your situation. Finally, consult your significant other, family, and close friends. A decision about your startup affects you not just professionally, but personally.

If you do decide to push through the challenges and move forward with your startup, make sure you continue to check in with yourself and with other people. Try not to get caught up in the expectations you have for your company. Focus on the question of whether you’re creating a solution that people need. Is it pain relief, or a supplement? If the answer is ever the latter, it might be time to change direction.

About the Authors
By Alex Bard
See full bioRight Arrow Button Icon
By Bethany Cianciolo
See full bioRight Arrow Button Icon
Add Fortune on Google for similar content.

Latest in Commentary

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025

Most Popular

Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Finance
Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam
By Fortune Editors
October 20, 2025
Fortune Secondary Logo
Rankings
  • 100 Best Companies
  • Fortune 500
  • Global 500
  • Fortune 500 Europe
  • Most Powerful Women
  • World's Most Admired Companies
  • See All Rankings
  • Lists Calendar
Sections
  • Finance
  • Fortune Crypto
  • Features
  • Leadership
  • Health
  • Commentary
  • Success
  • Retail
  • Mpw
  • Tech
  • Lifestyle
  • CEO Initiative
  • Asia
  • Politics
  • Conferences
  • Europe
  • Newsletters
  • Personal Finance
  • Environment
  • Magazine
  • Education
Customer Support
  • Frequently Asked Questions
  • Customer Service Portal
  • Privacy Policy
  • Terms Of Use
  • Single Issues For Purchase
  • International Print
Commercial Services
  • Advertising
  • Fortune Brand Studio
  • Fortune Analytics
  • Fortune Conferences
  • Business Development
  • Group Subscriptions
About Us
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • About Us
  • Press Center
  • Work At Fortune
  • Terms And Conditions
  • Site Map
  • Facebook icon
  • Twitter icon
  • LinkedIn icon
  • Instagram icon
  • Pinterest icon

Latest in Commentary

k
CommentaryBox office
How Hollywood’s youngest filmmakers are exposing Gen Z’s real problem with AI
By Reid LitmanJuly 5, 2026
19 hours ago
k
Commentary250 Years of Innovation
Media leadership unity in defying Trump’s assault on free speech: standing tall against historic comparisons
By Jeffrey Sonnenfeld, Jeff Bewkes, Kay Koplovitz, Tom Glocer and Marvin KalbJuly 4, 2026
2 days ago
ds
CommentarySoftware
I argued with the father of open source for 2 years. Now the AI fight is the same — only bigger
By David SiegelJuly 3, 2026
3 days ago
ashok
Commentary250 Years of Innovation
The greatest startup in history: What we can learn from America’s founders at today’s AI frontier
By Ashok N. SrivastavaJuly 3, 2026
3 days ago
2
Commentary250 Years of Innovation
America’s secret weapon isn’t just innovation — It’s the freedom to fail
By Keith KrachJuly 3, 2026
3 days ago
rn
CommentaryCryptocurrency
Former Iran director at NSC: Crypto legislation is a ticket to sanctions evasion
By Richard NephewJuly 2, 2026
4 days ago

Most Popular

Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI
AI
Shark Tank's Kevin O'Leary says if he were 25 today, he'd chase these two booming opportunities in the world of AI
By Marco Quiroz-GutierrezJuly 5, 2026
17 hours ago
Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living
Success
Even as Elon Musk calls philanthropy ‘very hard,’ everyday Americans gave a record $617 billion—despite feeling the squeeze over the cost of living
By Preston ForeJuly 4, 2026
2 days ago
Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
Law
Egg companies made $1.22 billion in profit off a $6 carton — now they’re buying their way out of a price-fixing case with 53 million donated eggs
By Wyatte Grantham-Philips and The Associated PressJuly 2, 2026
3 days ago
The stock market is about to suffer a 'snapback' and will lose much of this year's gains as 'speculation is hitting extreme levels,' BofA warns
Investing
The stock market is about to suffer a 'snapback' and will lose much of this year's gains as 'speculation is hitting extreme levels,' BofA warns
By Jason MaJuly 5, 2026
10 hours ago
Meet the Zillennials: The luckiest micro-generation in the workforce, born between 1993 and 1998
AI
Meet the Zillennials: The luckiest micro-generation in the workforce, born between 1993 and 1998
By Nick LichtenbergJuly 3, 2026
3 days ago
Mark Zuckerberg takes business calls on a jet ski wearing his $800 Meta glasses—and insists 'the other person could not tell'
Big Tech
Mark Zuckerberg takes business calls on a jet ski wearing his $800 Meta glasses—and insists 'the other person could not tell'
By Sydney LakeJuly 5, 2026
18 hours ago

© 2026 Fortune Media IP Limited. All Rights Reserved. Use of this site constitutes acceptance of our Terms of Use and Privacy Policy | CA Notice at Collection and Privacy Notice | Do Not Sell/Share My Personal Information
FORTUNE is a trademark of Fortune Media IP Limited, registered in the U.S. and other countries. FORTUNE may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.