On Sunday, September 15th, NuFlick, one of Latin America’s most buzzed-about startups, closed its doors. The announcement sent shockwaves throughout the region’s ecosystem. How can it be that the company, one of the region’s seemingly surest bets, couldn’t make it?
“I guess it was a couple of months ago when an investor we were already discussing terms with could not go through with the investment,” explained Celeste North, NuFlick Co-founder and CEO, when asked when she realized things were going downhill. “We had been talking for months and planning towards the round. In that moment, I knew we had to make tough decisions and that the next months would be very difficult.”
Founded in 2011, NuFlick built out a distribution platform for independent films. The Mexico-based team sought to address the needs of the lesser-known cinema community and provide creators with a new and unique distribution channel for their work.
We at PulsoSocial have been following NuFlick since its inception, from its selection by Mexican.VC to its passage through Start-Up Chile. It was one of our picks for the 2012 edition of the #PS10, and at the start of the year, we named North to our list of 10 women entrepreneurs to watch in Latin America. As late as May, we covered NuFlick’s crowdfunding campaign with girltank – which, in retrospect, was likely a reflection of financial turmoil for the startup.
Yes, NuFlick was growing, but it wasn’t doing so fast enough.
So what happened? North reflected on NuFlick’s work over the past few years and what she may have done differently:
I would have delayed our first round. I think that if we had worked on the product and as a team months before joining Mexican.VC (now 500 Mexico City), we would have used the resources they provided in a better way. At the end of the program, our CTO left, and that was a big hit for us. Maybe if we had worked before, we would have known he wasn’t the right person for NuFlick.
Another detriment to NuFlick: Mexico’s cinema big-guns, like Cinépolis and Cinemex.
Such entities fostered hopes of an exit, but they also posed a threat if they decided to build out their own platforms – and have seemingly opted for the latter. Our sources told us that NuFlick approached one of the corporations regarding a possible acquisition but was turned away.
North made no mention of the rumored attempted exit and gave us her own perspective on the issue:
I think the way it affected us was that investors saw less hope in us as a small team, but as a product it didn’t affect us that much, because our customers are different. We worked with a specific niche that was not interested in the other solutions, so it actually helped increase the culture of paid digital content with users and distributors.
Failure is a difficult issue in any industry on any continent, and in Latin America’s budding startup ecosystem, it can be an especially touchy subject. There still isn’t a real culture of failure acceptance like there is in more developed scenarios, like that of Silicon Valley.
“It has actually worked in our favor,” North held. “We’ve been heavily involved in groups that foster entrepreneurship in the region, and when we made the decision, we knew it was the right way to go and contribute to embracing failure as part of the process. People have been supportive and interested in what comes next for us, which is greatly appreciated.”
With failure come lessons learned. North laid out three:
First, don’t raise money until you are ready for traction, when the sales funnel is proven. Second, take your time to choose the right co-founders to work with. And third, prioritize where you put your resources in relation to revenue and customer satisfaction.
While NuFlick may be down for the count, its co-founders commitment to the film and video rubric is long from gone. Two members of the NuFlick team, Rodrigo Boyzo and Eduardo Vaugier, have already embarked on a new endeavor: Agavideo, a web and mobile streaming and VoD platform for video content distributors.
“Deciding to close NuFlick was closely related to opening Agavideo,” North remarked. “We saw the business opportunity when talking to our distributors and other players in the market (television companies, film institutions, etc.) and knew we couldn’t do both companies simultaneously.”
North will help Boyzo and Vaugier to set up the new company and will serve on its advisory board, but she will not be directly involved in the day-to-day. “I feel the need to move on to something different,” she affirmed.
There is a lot to be learned from NuFlick’s downfall, but what will be even more fascinating to watch will be what happens next.