austin entrepreneur

Regarding the FAIL

Posted in Uncategorized by efalcao on October 12, 2007

Evenlevel

Great looking logo eh? Too bad that is all that is left at this point.

Evenlevel is (was? no…it still is) a great idea conceived by EJ Lawless, Chris Clever and myself. The basic idea is that the auto industry is too old fashioned and that the used car industry has too many inefficiencies. Right now, chances are that a good portion of used cars at your local dealership came from a dealer-only used car auction. Your dealer buys the car, gives it a cleaning, and sells it you you. It sits on their lot, depreciates, salesmen get paid commission, etc.

Evenlevel sought out to bring the dealer-only auctions to consumers, resulting in a more consumer-driven “pull” rather than “push” market for used cars. We would take images and data from these auctions, market the cars, sell the cars and have them shipped directly from the auction to the consumer. The prices were great. Thousands below blue book.

It worked. We sold five cars in two weeks. No marketing spend. Our prices were really low too. The headaches were starting: customer service calls, lots of paperwork, dealing with financing, our line of credit that we used to float transactions was tapped. I considered them good headaches, things we had to figure out and streamline.

On October 4th our google organic search traffic quintupled. On track for ~15k visitors that month. On October 5th, we were told to shut down by the upstream auction that our data came from.

It’s not like they did wrong by us. We were scraping their data without their consent. Our bad. We figured we were great for them and they wouldn’t mind, after all, from what I understand (I wrote the code, but didn’t deal with the financial details) they made $500 dollars per used car transaction on their site. Hey, YouTube had tons of copyrighted stuff on their site, and look at that outcome. We were not so fortunate

Apparently there were complaints about our prices and changing the status quo, so they cut off the wee startup.

So why are we stopping? Not enough resources to rebound at this point. Also, the whole business hedges on a business development deal: getting one auction company to let you sell cars direct to the public. I think the idea is going to rest for a while and make a comeback at some point. I think we lacked connections that could persuade the industry to let us exist. Maybe some big player will be start doing something similar and we’ll be able to bring it to market faster because that’s what startups do.

It’s rare to find a genuinely new way to apply technology to an existing market. Ideas are a dime a dozen, most of them stink (just read uncov.com). I’m definitely mourning for Evenlevel, but I think we’re making the right decision to stop for now.

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