Tessera was a gene editing startup founded by Flagship, focusing on innovative biotech solutions. Initially gaining traction under Flagship's investment, Tessera faced a downturn, leading to job cuts and a strategic pivot towards clinical applications. Despite raising $26.8M, it ceased operations in May 2023.
What was Tessera?
Tessera's main product was an NFT trading platform that enabled users to trade fractionalized NFT assets. Its unique value proposition lay in dividing NFTs into fungible tokens, facilitating easier transactions on decentralized exchanges. Notable achievements include raising $26.8M and collaborating with SHOPLINE to enhance customer experience in Asia.
Reasons behind Tessera's Failure
Shift in Strategic Focus Tessera's pivot towards clinical applications led to significant job cuts, impacting 13% to 14% of its workforce. This restructuring aimed to reallocate resources but created internal disruptions and uncertainty among employees, ultimately affecting the company's operational stability.
Funding Challenges Despite raising $26.8M, Tessera struggled to secure additional financing in a competitive biotech market. The inability to attract further investment hindered its ability to sustain operations and innovate, contributing to its eventual shutdown.
Market Competition Flagship Pioneering faced immense pressure to replicate the success of Moderna's COVID-19 vaccine. Tessera, as one of its ventures, couldn't meet these high expectations, struggling to stand out in a crowded and rapidly evolving biotech landscape.
Impact on Investors and Market
Tessera's failure, despite raising $22M, had a significant impact on its investors and the market. Investors like Paradigm and Delphi Ventures faced financial losses, while the market saw a decline in confidence towards NFT and blockchain startups. This event underscored the challenges in achieving profitability in emerging tech sectors.
Lessons Learned from Tessera's Failure
Adaptability is Crucial: Rapid market changes require startups to be flexible and responsive, ensuring they can pivot effectively without destabilizing operations.
Secure Sustainable Funding: Consistent financial backing is essential. Diversify funding sources to mitigate risks associated with market fluctuations and investor sentiment.
Manage Workforce Changes: Strategic pivots should be carefully planned to minimize disruptions and maintain employee morale and productivity.
Understand Market Dynamics: Thoroughly research and anticipate market trends to stay competitive and relevant in a fast-evolving industry.
Set Realistic Expectations: Avoid overpromising to investors and stakeholders. Focus on achievable goals to build credibility and trust.
Innovate Continuously: Stay ahead by fostering a culture of innovation, ensuring your product or service remains unique and valuable.
Frequently Asked Questions about Tessera
What led to Tessera's job cuts?
Tessera cut jobs to shift resources towards clinical applications, aiming to reallocate resources more effectively.
What was Tessera's main focus?
Tessera focused on gene editing and later pivoted towards clinical applications to enhance its biotech solutions.
Why did Tessera fail?
Tessera struggled with funding challenges and market competition, leading to its eventual shutdown.
Looking Ahead
As startup founders navigate the challenging landscape of innovation and competition, it's crucial to have a plan for every scenario. Sunset handles all the legal, tax, and operational burdens when winding down a startup, helping avoid penalties, reduce liabilities, and allowing founders to move on to their next venture quickly. Consider how Sunset can help you avoid similar pitfalls and ensure a smooth transition to your next big idea.
