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Business law attorney can guide a startup in the right direction

Startup businesses are prevalent in Ohio and nationwide.  One model that some of them try to emulate is that of wildly successful Uber, the digital rideshare company. However, the right combination of factors must be present and sometimes the owner/founder of the company may make fatal mistakes that are antithetical to business success. It can help to have access to an experienced business law attorney as the company moves forward.

The Uber model in general transfers an established business activity to the digital world, making it more convenient and giving more options than the traditional service or product. That was the thinking in 2013 behind the creation of a startup called Shyp that offered to ship packages through orders placed by customers on their smartphones. The company presented itself as a more convenient alternative to the post office.

Recently, however, even after raising $62 million in venture funding and surviving for five years, Shyp's CEO announced that the company has closed its operations. Kevin Gibbon, in a public display of humility, took the blame for the financial disaster. He said that he wrongly adopted a policy of growth over quality and that he did not listen to his advisers.

The company would dispatch a courier to the customer's location after receiving a smart phone order for a shipping project. The courier would complete the packaging, do all of the paper work and process the shipping. In the first few years, customer growth exploded, but then it significantly slowed down. Gibbon's advisers recommended concentrating on business customers, but he instead expanded the service into wider-reaching markets.

The strategy was a disastrous blunder and when Gibbons finally reversed that direction and collaborated with big businesses like eBay, it was too late. The company did not have the resources to regroup. It's a familiar story that demonstrates one pitfall for new businesses to avoid. One way for a startup in Ohio or elsewhere to benefit from experience is to obtain the services of a seasoned business law attorney. This may help to keep the company's feet on the ground and to learn about some common business pitfalls along the way.

Source: businessinsider.com, "The startup that wanted to kill the post office is shutting down after raising $62 million", Rachel Sandler, March 27, 2018

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