Why did Humm Fail?

Humm was a wearable tech startup that developed the Humm patch, a device using neurostimulation to enhance memory. Founded by university friends in 2017, it gained traction through accelerators and raised $3.26 million. However, COVID-19 challenges and funding shortfalls led to its closure in 2022.

What was Humm

Humm Technologies developed wearable neurotechnology to measure and stimulate mental performance in e-sport athletes. Its unique value proposition was enhancing cognitive abilities through innovative wearables. Notable achievements include raising $3.26 million, securing a patent, and being featured in expert collections and research briefs, underscoring its industry relevance.

Reasons behind Humm's Failure

1. Funding Shortfalls Humm fell short of its funding requirements, particularly in its Series A funding round, which was crucial for mass production. Despite raising $2.6 million in seed funding, the company struggled to secure additional investments needed to scale its operations, ultimately leading to its closure.
2. COVID-19 Impact The pandemic created significant challenges in the global hardware market, including supply chain disruptions and shipping delays. According to CEO Iain McIntyre, “Covid made the global hardware market an incredibly tricky place to navigate,” severely affecting Humm's ability to produce and test prototypes efficiently.
3. Regulatory Uncertainty There was a lack of clarity in the FDA's regulatory framework regarding whether the Humm patch was considered a medical device, complicating the path to market. This regulatory ambiguity posed significant hurdles, delaying the product's approval and market entry.

Impact on Investors and Market

Humm's failure had a significant impact on its investors, leading to financial losses due to the inability to secure further funding and the subsequent closure. The market, however, saw a silver lining as Humm's technology found a new home with Rogalife, indicating potential future applications and continued innovation.

Lessons Learned from Humm's Failure

• Secure Adequate Funding: Ensure sufficient capital for all stages of development to avoid financial shortfalls that can halt progress.
• Adapt to Market Conditions: Be prepared for unexpected challenges like global crises that can disrupt supply chains and operations.
• Understand Regulatory Requirements: Gain clarity on regulatory frameworks early to avoid delays in product approval and market entry.
• Maintain Investor Relations: Keep investors informed and engaged to secure ongoing support and funding.
• Innovate Continuously: Stay ahead by continually improving and adapting your technology to meet market needs and regulatory standards.

Frequently Asked Questions about Humm

Who founded Humm and when?

Humm was founded by four university friends from Perth in 2017.

What was the primary feature of the Humm patch?

The Humm patch was a reusable, disposable device designed to improve memory using neurostimulation.

Why did Humm fail to continue its operations?

Humm failed due to funding shortfalls, COVID-19 disruptions, and regulatory uncertainties.

Looking Ahead

As startup founders navigate the challenging landscape of entrepreneurship, it's crucial to learn from the experiences of others. Humm's journey underscores the importance of securing adequate funding, adapting to market conditions, understanding regulatory requirements, maintaining investor relations, and continuous innovation. For those facing the difficult decision to wind down their startup, consider how Sunset can help you avoid similar pitfalls. Sunset handles all the legal, tax, and operational burdens, allowing you to move on to your next venture with ease.