As an entrepreneur it's important to learn from failure. In this article we look at a few failed startups and why they didn't succeed.
Everyone loves a success story, a hero or heroine whose flourishing business catapults them from rags to riches, but much as these stories warm the heart and can provide useful examples to us, it is also good to examine the businesses which went bust so we can learn from their mistakes.
GuGo was a small business whose service offering was a “group-centric social intelligence platform.” The company aimed to provide a social network that also delivered products deals and local events recommendations. The idea was to allow online interaction between users and brands. The concept was strong but according to the principals cofounder disagreements led to many problems. Only one of the founders was tech-savvy. He felt that he was doing all the hard work however still only owned 50 percent of the company. Difficulties in securing funding, adding more turmoil to this already tense situation, proved to be the final straw and GuGo chose to close down.
RewardMe was set up to provide a real-time intelligent CRM solution for local commerce, providing merchants with customer insights. The company was able to rapidly raise money and accumulated one million in start up capital. However as found Jun Loayza explained in a blog post 'premature scaling killed us'. The business blasted through its funds too quickly, for example the principals attended expensive conferences, trade shows and took numerous flights to meet potential clients, plus the company added many staff to the growth team, which proved very expensive. Growth was too rapid and only achieved through brute-force as opposed to establishing stable foundations. The company actually never arrived at a stable product nor a scalable customer acquisition channel.
Kolos was a small business whose start up concept was to sell the first steering wheel for iPad driving games. The idea seemed good at the time and entrepreneur Ivaylo Kalburdzhiev was able to acquire $50,000 in funding. However, perhaps Kalburdzhiev did not do sufficient research into the demand for such a product. The business turned out to be a flop, as the founder discovered people simply weren’t interested in it. Kalburdzhiev admitted that juxtaposed to the light and portable iPad, the Kolos wheel was large, heavy and cumbersome. Kalburdzhiev described Kolos’s failure in a blog post entitled “Kolossal failure: 10 lessons I learned from burning through $50,000 on a hardware project that bombed.”
Secret was a site launched in January 2014 by founder David Byttow, with the intention of providing a platform where users could share secrets anonymously. Secret was quickly able to secure funding from angel investors, however the app’s popularity peaked after 10 months only to plunge dramatically. Furthermore the founder explained in a blog post that the shutdown of Secret was also due to internal conflicts revolving around the concept itself. Byttow stated that Secret had to be closed as “unfortunately, Secret does not represent the vision I had when starting the company, so I believe it’s the right decision for myself, our investors and our team.”
