It’s been said before. The startup world is an unforgiving and gruelling one, riddled with peaks and troughs. That being said, it also provides enough exhilaration and rewards (if navigated correctly) for budding entrepreneurs to scale a plethora of hurdles to gain founder status.
We take a look at a few businesses that didn’t take flight due to a myriad of reasons – all proving to be valuable lessons for those who want to enter the unchartered waters of the startup world.
This one would bring a smile to many from the generation X and Y public, who enjoyed the social networking site to connect with friends, family, and acquaintances before the advent of Facebook.
What is not common knowledge to many is that Google made an offer to purchase the platform for US$30m – which was rejected – much to the regret of its founders today.
The site failed largely because it didn’t implement the sharing of news, which is what we currently also use social media for. It kept its primary function revolving around a profile-based model, with limits to the depth and variety of information one would see – aside from visiting each other’s profile pages. The platform also didn’t sell itself to big name sites when its popularity was soaring – and it was for a good period of the early 2000s.
Color’s business model was somewhat pedestrian – a photo-sharing app that leveraged social and geographic data. With such a simple idea, the startup was quickly ridiculed by the industry as focusing more on the co-founders and less on the merits of the concept.
The fact that this startup failed – or rather didn’t take flight – is rather contestable as it DID manage to get bought over by Apple for US$7m. That being said, the company raised US$41m in funding prior to this, leveraging the successes of its two founders, Bill Nguyen of Lala, an online music service that sold to Apple for US$80m, and Peter Pham, the former CEO of the wildly popular BillShrink.
Some proponents claim that the app was ahead of its day, which if correct proves that market entry timing is one of the most important factors to consider in the startup sphere. All said and done, the founders can still claim that a major technology company acquired their business for millions of dollars.
This one ticked all the boxes for it to succeed. Strong backing, well-known founders, and considerable levels of buzz surrounding its launch. Essentially an Internet TV service, it launched in 2007, raising a whopping US$45m in funding.
Critics have been divided as to how this startup – which was destined for success – met roadblocks large enough to stop it in its tracks. One belief is that the company didn’t follow the startup 101 rule of growing at a steady rate and with a lean team. They hired in volumes and set up headquarters in various locations.
Many also point to the fact that they relied on the buzz created by their famous founders that also began Skype and Kazaa – thus riding on their fame. The company eventually shut down in 2012, in what was a shock to the tech world.
And there we have it, three promising startups that failed for varying reasons. The entrepreneurial world is one that can prove to be extremely rewarding – however, for every success, there are several other failures. It cannot be stressed enough how a good idea alone doesn’t signify a winner. It has to be married with extremely good planning.