Move loot once said that they were the easiest way to buy and sell furniture but in fact, they failed to accomplish that. Let’s know what led to their failure. It is quite a hassle to move furniture and Move loot made it seem so easy and enjoyable through their startup idea.
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Index:
Founder Details
Move Loot was an internet marketplace startup based in 2013 by Bill Bobbitt, Jenny Karin Morrill, Ryan Smith, and Shruti Shah. Bill Bobbitt moved from Dallas to San Francisco for his job. The frustration of buying furniture from IKEA and selling old ones on Craigslist, also losing several thousand dollars in the process led to the birth of Move Loot.
Move Loot started from Dogpatch, San Francisco, and then expanded its market to New York, California, Raleigh, North Carolina, Durham, North Carolina, Charlotte, North Carolina, and Atlanta, Georgia.
Business Model: How Move loot work?
Move Loot targeted the convenience of the customers. They provided the service of picking up the furniture, putting it in their warehouse, also maintaining and cleaning them. Then posting pictures on their website accompanied by delivering it to the buyer. The entire burden was lifted off the heads of the seller.
How does Move Loot make money?
On selling any furniture item, half of the profit would be taken by Move Loot, and the rest half would go to the seller. If the furniture was not sold in the first 30 days, they would lower the price to generate interest of the buyer.
If the furniture was not sold in 60 days, the company would donate it or can also be shipped back to the seller. They had initial delivery charges (can also be free) + furniture price on the website on short-distance delivery. Delivery charges increased as per distance ( ranging from $100 to $1000).
Funding
In November 2015, Move Loot was valued at about $21.8 million after receiving fundings in three rounds. Move Loot received funding from top-notch inverters including Y Combinator, Google Ventures, Index Ventures, Great Oaks, IDG, and Sherpa Ventures.
This build up the initial momentum and confidence for the startup founders to expand their markets beyond their reach.
Competitors
The top competitor of Move Loot was Chairish, an online marketplace that is led by Gregg Brockway. They were also dealing with retail distribution.
Future Vision for the startup
Cofounder Jenny Morrillsaid that they titled the company as ‘Loot’ as they wished to expand their category of goods not only to furniture but to sporting goods and electronics.
Failure
Move Loot halted its services in July, 2016 after 3 yrs of starting; selling its customers list to Handy.
Major steps taken by them:
1) Dealing with the US $1.5 million worth of furniture in New York alone and has more than 100,000 users in the initial year. Still wanting to expand, Move Loot now took the B2B approach; launching its “Trade by Move Loot” program. Now local shop owners could also sell and buy from them.
2) Tie-up with Uber on increasing demands of moving service.
Analysis for failure
- Aggressive expansions with the expectation of guaranteed future fundings lead to inappropriate cash flow.
- Poor action plan and unsustainable business model. Changing one business model to another.
- Not clear track of expenses like renting, moving cost, salary, etc to that of profit received. They should have focused on revenue as much as customer service.
Possible fixes
Instead of massive expansion all at once, startups should take slow steps, increasing their unit one by one. This is to maintain the input cost and to that of output obtained. If there is no future funding, put some percentage of output for further growth. Try to achieve short term goals to reach the top tier and analyze decisions at each step.
Do tell us what you think!
Come on! Tell us what you think of our startup failure analysis on “Move Loot” in the comment section.
Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business concepts, and no bullshit!!
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FAQS
What was Move Loot?
Move loot idea was to build the easiest way to buy and sell furniture.
How Move Loot make money?
On selling any furniture item, half of the profit would be taken by Move Loot, and the rest half would go to the seller. If the furniture was not sold in the first 30 days, they would lower the price to generate interest of the buyer.
How Move loot worked?
Move Loot targeted the convenience of the customers. They provided the service of picking up the furniture, putting it in their warehouse, also maintaining and cleaning them. Then posting pictures on their website accompanied by delivering it to the buyer. The entire burden was lifted off the heads of the seller.
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