Many Startups Die; F ECTIVE Was One of Them
Many startups emerge, die, or exit every day. In the US alone, 1 million businesses opened and 898,000 businesses died in 2017, according to the US Small Business Administration. The competition to survive is fierce: startup failure rates are about 90%. Broken down by year, 21.5% of startups die in the first year.In the second year, 30% vanish, and in the fifth year, half of them are gone. In the 10th year, 70% of them fail to survive.
InsightsArtist has previously summed up in Top 10 Startup Failure of 2019, not every startup meets success. The infographic above brings a vanished Swiss startup, F ECTIVE, on the stage to look back on what it wanted to achieve as a new business.
F ECTIVE: A Swiss Startup Launched in 2016
Andy Kobelt and Jeroen van de Wetering founded F ECTIVE in Zurich, Switzerland, in 2016, receiving funding from EY Startup Academy. Both having consulting background, they were passionate to revolutionize the way “work” works today. In other words, F ECTIVE’s mission was to transform HR processes into more agile and seamless ones.
Working for one of the Big Four consulting firms, Andy noticed that finding the right person for a project was time-consuming and frustrating processes. Even at a big company, these processes are often manual and slow. Nevertheless, the outcome does not always meet expectations.
Andy saw an opportunity in this frustration: the more a company automated daily activities such as staff management, the more the company could invest in developing business and the more project-driven the company would be.
F ECTIVE’s Solution to Revolutionize HR Processes
In order to build a high performing team, F ECTIVE developed an AI-driven platform that aggregated a wide variety of professionals. In the platform, independent contractors, professional service providers, and participating companies’ internal employees were all in one pool.
With the help of AI, users didn’t have to browse and search for the right candidates at their fingertips. The platform also removed intermediary layers by connecting users and candidates directly, which as a result reduced costs and made the process more efficient.
How F ECTIVE Was Different from Other Online Recruitment System
Unlike traditional online recruitment system, F ECTIVE put together different markets and fields. Simply put, it was like a real-time match making between demand and supply. It also allowed companies to gain insights into their own employees.
The machine learning platform made it possible to allocate the right candidate for a certain project, reallocating and reengaging employees, and thereby increasing employee retention. The algorithm worked based not only on experience, but also on soft skills and personal interests.
Additionally, consulting companies were able to offer their services on the platform through a digital channel. The platform provided them direct access to companies, by which consulting companies could expand their client network. It also enabled consulting firms to utilize freelancers for their specific project.
Platform Got Closed by 2020
As is mentioned earlier, however, very few startups can survive. Unfortunately, F ECTIVE was not the lucky one to exit from a startup. F ECTIVE vanished by the beginning of February 2020, leaving the following message on their platform:
The last Goodbye!
Dear friends and customers
Unfortunately, we had to shut down our platform. This is our last goodbye and we wanted to thank you all for your trust, all awesome conversations we had with you and the great collaboration.
Would be great to stay in touch personally.
Much success and fun,
your F ECTIVE team