Recall 7 sensational startups that closed in 2015
Relentless statistics says that 90% of all startups will fail.
Even taking into account the fact that seven startups from the list below raised about $ 400 million due to venture capital investments, this is only a part of those projects whose appearance was widely covered at one time, but they still had to close in 2015. An impressive list of failed startups that have left the market over the past few years can be found here: the material was prepared by the CB Insights web portal
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We will return to our list of 7 projects that were forced to cease their activities this year. Let's take a look at how these startups set out to change the world, and what lessons the founders of other projects can bring out for themselves.
What it was : being launched in 2009, Quirky was a platform where people could vote for various ideas of possible devices that they liked, and the company embodied these ideas into a real product. This is how, for example, the Pivot Power gadget appeared. The startup also founded a subsidiary company Wink, engaged in developments in the field of the Internet of things. In particular, Wink produced hubs for smart homes.
Why closed : as reported by Jillian D'Onfro from Business Insider, there was almost no demand for products. For example, the company spent about 400 thousand dollars on the development of musical acoustics using the Bluetooth protocol, and only 28 copies were sold. Wink didn’t do the best, and the unsuccessful security update caused the company to withdraw all hubs sold this spring.
As a result, the company ran out of funds, and it declared bankruptcy in September. She fought to the last, trying to change the business model and having spent several stages of employee layoffs, and in the end the Wink project was sold for $ 15 million. The president of the company resigned in August.
Investments received: $ 185 million from Andreessen Horowitz, GE, RRE Ventures, Norwest Venture Partners and Kleiner Perkins.
What it was : the Homejoy service offered house cleaning services. It was one of the first companies of the so-called gignomiki. Homejoy was the darling of the press because he offered a low-cost cleaning service and used the software to automate the employee booking process for greater efficiency.
Why closed : In an interview with Re / code, Homejoy CEO Adora Cheung blamed the lawsuits for the non-professional approach of the staff that the company faced. The startup did not receive enough funding for such growth, which was necessary, so management decided to close the company in July.
However, Christina Farr of Backchannel pointed out the company's inability to retain both customers and employees, and the losses led to the company's decline. Like Groupon, the company struggled to retain customers when it offered cheap cleaning services and then raised the price.
Investments received : $ 40 million from Y Combinator, PayPal founder Max Levchin, First Round Capital, Redpoint Ventures and Google Ventures.
What it was : Zirtual provided virtual assistants. Instead of adopting a model of gigomics and staffing exclusively contract workers, full-time staff worked at Zirtual. Each assistant worked with several accounts depending on the workload, which reduced the cost of services for corporate clients.
Why closed : In August, in the middle of the night, Zirtual fired 400 employees, informing them by e-mail after a hopeless attempt to get funding failed. CEO Maren Kate Donovan later said that “the numbers were really awful,” and the company contained too many employees with a lack of customers.
Looking back, she said in an interview with Fortune that she should have hired a full-time financial director and had people to properly manage the company. Zirtual assets were acquired in October by Fundable platform.
Investments received : $ 5.5 million, including funding from Jason Calacanis, Mayfield Fund, Tony Hsieh and VegasTechFund.
What it was : Secret is an application that allowed you to anonymously post fragments of text, rumors or confessions that people shared with each other. The application has evolved along with other anonymous applications, such as Whisper and Yik Yak. But, like many other anonymous applications, Secret had problems with cyberbullying, and eventually it was decided to redesign the product so that it looked like a competitor to Yik Yak.
Why closed: In his farewell blog post, startup CEO David Bittou (David Byttow) wrote that Secret "does not reflect the idea that I developed by founding a company." He continued: “I believe in honest open communication and creative expression, and anonymity is one of the ways to achieve this. But anonymity is also a double-edged sword, which requires a lot of respect. ”
Investments received : $ 35 million. Bittou noted that most of the money will be returned to investors.
What it was : This music streaming service was launched in 2006 and became a site where users could download their music so that other people could listen to it. He immediately faced legal problems related to copyright infringement, and then for years tried to sign contracts with one of the largest companies that manage royalties for licensed content. Representatives of this company, in turn, argued that the company had never received information from Grooveshark about what was posted on the site, which is why it - and other major music companies - began to sue Grooveshark.
Why closed : In his farewell note published during the settlement conference, the streaming website admitted that “despite the best intentions” he made a mistake in refusing to acquire licenses from owners of rights to a huge amount of music hosted on the service.
Investments received : 6 million dollars.
What it was : This is another music streaming site that was created in 2010 by the founders of Skype and Kazaa. This service was supposed to be a competitor to Spotify and Apple Music. Unlike Grooveshark, Rdio used the subscription model, but it was always in the shadow of Spotify for most of its existence.
Why closed : In November, Janko Roettgers from Variety announced that Pandora acquired Rdio's “technology and intellectual property” for $ 75 million, the purchase was related to the approaching bankruptcy of the service. The company struggled to compete with Spotify since 2011, when a foreign service entered the American market and offered the best free package. People liked Spotify, they willingly paid for a premium subscription, but Rdio could not get subscribers or redesign the service.
Investments received : 125.7 million dollars.
What it was : Leap Transit was supposed to offer luxurious suburban buses on bus routes that would benefit the residents of the suburban area and would not be served by the city. San Francisco managers said it was a service for the rich, as the city already had an extensive network of suburban shuttles. He was even called a “bag of shit” for creating a two-tier transit system in the city after the launch of the service in 2013.
Leap Transit supporters, however, saw it as a solution to problems and a way to reduce the number of cars on the streets. The line of high-comfort buses was equipped with Wi-Fi, coffee, snacks, sockets and leather seats. It suited those who could afford to buy a ticket for 6 six bucks one way.
Why closed : The Startup suspended its work in May after disagreements with regulatory authorities and receiving a letter demanding an end to illegal actions. The temporary suspension became permanent a month later, when the service buses were put up for auction. In July, the company declared bankruptcy, gross income for the year amounted to $ 20,748.
Investments received : $ 2.5 million from Andreessen Horowitz, Index Ventures, Slow Ventures, and Salesforce President Marc Benioff (Marc Benioff).
Even taking into account the fact that seven startups from the list below raised about $ 400 million due to venture capital investments, this is only a part of those projects whose appearance was widely covered at one time, but they still had to close in 2015. An impressive list of failed startups that have left the market over the past few years can be found here: the material was prepared by the CB Insights web portal
')
We will return to our list of 7 projects that were forced to cease their activities this year. Let's take a look at how these startups set out to change the world, and what lessons the founders of other projects can bring out for themselves.
Quirky
What it was : being launched in 2009, Quirky was a platform where people could vote for various ideas of possible devices that they liked, and the company embodied these ideas into a real product. This is how, for example, the Pivot Power gadget appeared. The startup also founded a subsidiary company Wink, engaged in developments in the field of the Internet of things. In particular, Wink produced hubs for smart homes.
Why closed : as reported by Jillian D'Onfro from Business Insider, there was almost no demand for products. For example, the company spent about 400 thousand dollars on the development of musical acoustics using the Bluetooth protocol, and only 28 copies were sold. Wink didn’t do the best, and the unsuccessful security update caused the company to withdraw all hubs sold this spring.
As a result, the company ran out of funds, and it declared bankruptcy in September. She fought to the last, trying to change the business model and having spent several stages of employee layoffs, and in the end the Wink project was sold for $ 15 million. The president of the company resigned in August.
Investments received: $ 185 million from Andreessen Horowitz, GE, RRE Ventures, Norwest Venture Partners and Kleiner Perkins.
Homejoy
What it was : the Homejoy service offered house cleaning services. It was one of the first companies of the so-called gignomiki. Homejoy was the darling of the press because he offered a low-cost cleaning service and used the software to automate the employee booking process for greater efficiency.
Why closed : In an interview with Re / code, Homejoy CEO Adora Cheung blamed the lawsuits for the non-professional approach of the staff that the company faced. The startup did not receive enough funding for such growth, which was necessary, so management decided to close the company in July.
However, Christina Farr of Backchannel pointed out the company's inability to retain both customers and employees, and the losses led to the company's decline. Like Groupon, the company struggled to retain customers when it offered cheap cleaning services and then raised the price.
Investments received : $ 40 million from Y Combinator, PayPal founder Max Levchin, First Round Capital, Redpoint Ventures and Google Ventures.
Zirtual
What it was : Zirtual provided virtual assistants. Instead of adopting a model of gigomics and staffing exclusively contract workers, full-time staff worked at Zirtual. Each assistant worked with several accounts depending on the workload, which reduced the cost of services for corporate clients.
Why closed : In August, in the middle of the night, Zirtual fired 400 employees, informing them by e-mail after a hopeless attempt to get funding failed. CEO Maren Kate Donovan later said that “the numbers were really awful,” and the company contained too many employees with a lack of customers.
Looking back, she said in an interview with Fortune that she should have hired a full-time financial director and had people to properly manage the company. Zirtual assets were acquired in October by Fundable platform.
Investments received : $ 5.5 million, including funding from Jason Calacanis, Mayfield Fund, Tony Hsieh and VegasTechFund.
Secret
What it was : Secret is an application that allowed you to anonymously post fragments of text, rumors or confessions that people shared with each other. The application has evolved along with other anonymous applications, such as Whisper and Yik Yak. But, like many other anonymous applications, Secret had problems with cyberbullying, and eventually it was decided to redesign the product so that it looked like a competitor to Yik Yak.
Why closed: In his farewell blog post, startup CEO David Bittou (David Byttow) wrote that Secret "does not reflect the idea that I developed by founding a company." He continued: “I believe in honest open communication and creative expression, and anonymity is one of the ways to achieve this. But anonymity is also a double-edged sword, which requires a lot of respect. ”
Investments received : $ 35 million. Bittou noted that most of the money will be returned to investors.
Grooveshark
What it was : This music streaming service was launched in 2006 and became a site where users could download their music so that other people could listen to it. He immediately faced legal problems related to copyright infringement, and then for years tried to sign contracts with one of the largest companies that manage royalties for licensed content. Representatives of this company, in turn, argued that the company had never received information from Grooveshark about what was posted on the site, which is why it - and other major music companies - began to sue Grooveshark.
Why closed : In his farewell note published during the settlement conference, the streaming website admitted that “despite the best intentions” he made a mistake in refusing to acquire licenses from owners of rights to a huge amount of music hosted on the service.
Investments received : 6 million dollars.
Rdio
What it was : This is another music streaming site that was created in 2010 by the founders of Skype and Kazaa. This service was supposed to be a competitor to Spotify and Apple Music. Unlike Grooveshark, Rdio used the subscription model, but it was always in the shadow of Spotify for most of its existence.
Why closed : In November, Janko Roettgers from Variety announced that Pandora acquired Rdio's “technology and intellectual property” for $ 75 million, the purchase was related to the approaching bankruptcy of the service. The company struggled to compete with Spotify since 2011, when a foreign service entered the American market and offered the best free package. People liked Spotify, they willingly paid for a premium subscription, but Rdio could not get subscribers or redesign the service.
Investments received : 125.7 million dollars.
Leap Transit
What it was : Leap Transit was supposed to offer luxurious suburban buses on bus routes that would benefit the residents of the suburban area and would not be served by the city. San Francisco managers said it was a service for the rich, as the city already had an extensive network of suburban shuttles. He was even called a “bag of shit” for creating a two-tier transit system in the city after the launch of the service in 2013.
Leap Transit supporters, however, saw it as a solution to problems and a way to reduce the number of cars on the streets. The line of high-comfort buses was equipped with Wi-Fi, coffee, snacks, sockets and leather seats. It suited those who could afford to buy a ticket for 6 six bucks one way.
Why closed : The Startup suspended its work in May after disagreements with regulatory authorities and receiving a letter demanding an end to illegal actions. The temporary suspension became permanent a month later, when the service buses were put up for auction. In July, the company declared bankruptcy, gross income for the year amounted to $ 20,748.
Investments received : $ 2.5 million from Andreessen Horowitz, Index Ventures, Slow Ventures, and Salesforce President Marc Benioff (Marc Benioff).
Source: https://habr.com/ru/post/297350/
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