When one goes through successful startups that have managed to scale international heights and grow more prominent over time, it becomes quite easy to forget about the ones that did not make it. Two startups may come into the market in similar economic conditions, and with similar funding yet only one of them manages to succeed due to one factor or the other.
There are many examples of promising startups which eventually failed and there are lessons to be learned from such incidences.
What startups have failed?
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SelfieJobs
This app came onto the market in 2015 with a funding of over three hundred thousand Euros. Many looked to it as the tinder equivalent for job seekers, and it was an instant hit, reaching up to fifty thousand users during its lifespan. It worked such that employers could go through applicant profiles, much like what Tinder users do when searching for a partner.
The app had an emphasis on restaurant job seekers, and it received excellent reception in the market. It went on to excel such that they would record fifty thousand users as well as millions of ad views per month. However, the company started facing trouble regarding revenue generation, and this led to its fall over time. Eventually, the owners had to shut down the website and put up the company for sale in June 2018.
- Waitress
Sometimes, people are looking to rush into a restaurant, grab a meal and head out without having to queue for their order. This app’s founders recognized the need for a pre-order service and they thus came into the market in 2015 with a funding of 680,000 Euros.
With the app, users could make food orders, and they would then collect their ready meals as they wished. Thanks to its convenience, the app did pretty well, and they managed to serve tens of thousands of customers during their operations. However, they faced a problem regarding revenue generation, and they eventually had to close shop in April 2018.
There were many explanations as to why the company had failed. One of these was that the company focused on restaurants located in malls. As the demand for malls declined, so did their target market and as such, they suffered a loss. Another cause of failure was the coming of competitors onto the market such as UberEats and Foodora. With many options on the market and with little market share to start with owing to mall segmentation, it became increasingly hard to sustain a steady stream of incomes. As such, they had to shut down their operations.
- Tinitell
Wearables are an exciting concept, and the industry keeps growing with new players coming onto the scene. Such was the case for Tinitell which entered the market in 2014 with a funding of 3.6 million Euros. The company had a great start, and it emphasized on the production of wearables for children in a bid to promote health and wellness in the young generation.
The sales were high up till the point when it became apparent that the wearables posed security problems for children using the gadgets. For one, there was a security shortcoming that allowed hijackers to gain access to kids’ locations. These hackers could also contact the children if they wished to and this flaw led to a scare as parents were not willing to expose their children to such risks. As such, the demand went down, and this affected their performance on online shopping sites. This company had collaborated with Amazon concerning mass distribution, but after the uncovering of its flaws, it became clear that the deal would not reap benefits for the parties involved. The company eventually closed its doors in February 2018.
- Greta.io
This company came to be in 2015 under the guidance of Anna Ottosson, the then CEO. With funding of 1.2 million Euros to back their operations, the company was set to do well in the market. Sophia Bendz, a former top executive at Spotify, was one of the backers behind this project whose mission was to make internet loading speeds faster by preventing traffic overload.
Their concept was excellent and was well received, leading to the company being named as one of the hottest startups in Stockholm by Wired Magazine, owing to their rapidly growing success. However, shortly after this, the company quit its operations. Anna went ahead to state that their fall had arisen from the entrance of strong competitors in the market such as Google and this had, in turn, rendered them unable to fulfill their mission. It shut down in April 2018.
These companies are examples of startups that came onto the market with adequate funding yet failed to take off as planned. Entrepreneurs venturing into the industry should take lessons from such failures as they can help them point towards a profitable direction.