Following recent reports of social gifting site, Giftology’s shut down, founder Aman Narang has confirmed that the company has officially shut down. The Giftology site has been down for over a week, and Aman shared that they have stopped hosting it, citing it to be the reason why the founders have not been reachable over their official email.
I spoke to Aman to understand the reasons behind this shut down, and he bared all. Every startup is precious to this country and it is always sad to hear the death of a company, especially given the circumstances that Aman shared.
Fissures in the entrepreneur and investor relationship
Giftology raised an undisclosed amount from Kiran Sidhu, the Chairman of Transact Network which he founded in 2006. Aman cited difference in opinion between the entrepreneur and investor as the main reason behind the shutdown. He says, “The investment happened earlier this year in January, and recently we started to see some fissures in our relationship with the investor.”
“There are two types of funders - one who is a pure financial guy, who puts in some amount and expects a 4x - 5x return at the end of a specified time period, and then there are those who are also mentors, who invest time in the company that you spent time building as it is similar to bringing up and nurturing your own child. As an entrepreneur, you have a vision for the company you’re building and you know where you want to take it because you are eating, drinking and sleeping it, not unlike the investor who is sitting in his plush office and just doing calls to check where his returns are going to come from. The second kind of investor gives the company a direction that might not always match with your vision for the company. That’s essentially what happened in our case.”
What was disheartening to hear was that Aman still wanted to pursue his work with Giftology. He says, “6-7 months is too short a time to show results. It took me 2 months to put a team together which was unceremoniously show the door within a day's time! And honestly, we were doing some great work with Giftology. We were running campaigns with reputed brands likeUCB, we had offline gifting partners, an area which is literally untouched considering our try-n-buy approach and even had gifts like free cocktails, starters, drinks etc. at pubs. Now these kind of gifts were truly unique. But the investors couldn’t see the results they were looking for, because West is West and India is India, and we were asked to close it down.”
Learnings and moving forward
While a failure of this nature is really hard to get over, Aman believes that there were a lot of learnings that he’s derived from it. He says, “I was in Mumbai, working for Freecharge, and Observed the social gifting space quite keenly, and there were so few people working in it. You had Badhai or a Giftxoxo at the most. We really thought we could make a dent in this space and we worked very hard.”
“My biggest learning from this is, that you should choose your Investors carefully, & your CEO even more carefully and bootstrap for as long as you can. Lastly, I would like to apologize to my entire team at Giftology for what they witnessed."
Aman shared that he would be taking a break and figuring out how things move forward. This is common among entrepreneurs who have put in significant amount of effort into a company over a long period of time. We wish Aman all the best with his future endeavors.”
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