You'll Totally Believe Why These Startups Failed

Nerval's Lobster writes: If you ever wanted a glimpse into what dooms startups, look no further than autopsy.io, a website that lists the reasons why many newborn tech firms imploded. The website offers entrepreneurs the ability to self-explain why their startup didn't quite make it; in a bid to separate real-life stories from entertaining fictions, the application form asks for a link to a blog post or medium article "that tells the story of the failure," along with the founder(s) Twitter handle and Crunchbase or Angel.co profile. Some of the reasons listed for failure are maddeningly opaque, such as UniSport's "for a number of reasons" or PlayCafe's "we didn't reach enough users." Others are bleakly hilarious; as the founders of Zillionears, self-billed as a "creative pre-sale platform for musicians," confessed: "People really didn't really LIKE anything about our product." If you're thinking of launching your own company, or you work for a wet-behind-the-ears startup, it's worth scanning the list to see if any of these potential crises are brewing in your setup.

Comments

The 90's all over again...

[bev_tech_rob]

Looking at all those sites reminds me of the 90's all over again. Silly sounding site names with silly business models IMO .....

Re:The 90's all over again...

[jellomizer]

This type of stuff happens all the time. A lot of people failed to realize that running a business is harder than it seems when you don't.
"If you build it, they will come" is a false statement. "If you build it, and people want it, if they don't you need to market it so they want it, if they do they need to know about it, if they know about it they need to like it better then any alternatives... To do this you need funding"

What happens when autopsy.io goes belly up

[Spy Handler]

where will the founder explain how it died?

Entrepreneurs are not business people

[QuietLagoon]

Many times, the reason boils down to the fact that the entrepreneur's mind works very differently than the mind of a business person.

.
Many entrepreneurs wait too long before calling in a business person to watch over the financial aspects and business goals of the company.

Re:Entrepreneurs are not business people

[Voyager529]

no, most of these ideas are about as stupid as buying a Palm Pilot in the 90's and spending an hour a day inputting data into it to save an hour organizing your day. or they try to copy some existing business model under some cool hype and don't deliver

Spoken like someone who missed a lot of what Palm brought to the table at the time, and whose first PDA was an iPhone...

1.) Taking time to input data has always been a part of a pocket reference. If you were carrying around a Day Timer, you were doing data entry by hand to create your schedule. If you were carrying around a pocket Rolodex, you were adding contact names and numbers with a pencil. Palm took about the same amount of time at worst.
2.) Palm facilitated data entry by syncing with Outlook (for those who had existing data) or Hotsync Manager (for those who didn't) and allowing all of that data to be stored and backed up.
3.) It did seemingly trivial things like "sort alphabetically" - it's maddening to open a pocket phone book and be out of room to add a new person where they belong. Similarly, A Palm that was kept for 3-5 years (back then, they were, in fact, kept that long) was pretty close in cost to replacing a DayMinder annually - those things are NOT cheap.
4.) Alarms when things were coming up. A pocket calendar didn't chirp an hour before an event.
5.) Multiple calendar views. Wanted to see your paper calendar at a weekly level? Hope you bought it that way!
6.) Trading contact information by holding down the 'contacts' button and lining up the IR sensors. To this day, I've only seen weak attempts to recreate this - Bump, QR Codes, costly NFC tiles...nothing beat the simplicity of line up. hold one button. done.

Trivial as these things are to us now, the days of doing these tasks on paper saw them as a much bigger leap, because they were problems that went from 'unsolved' to 'solved', rather than 'solved' to 'optimized'. Also, keep in mind that battery life was measured in "weeks".......

Damn the torpedos full speed ahead

[skids]

If you're thinking of launching your own company... it's worth scanning the list to see if any of these potential crises are brewing in your setup.

I thought the whole point was to jump in head-first and just hope the thing gets bought by an aquisitions team from an established company or pull all the copper out of the walls on your way out and end up breaking even (and therefore having employed yourself for a year or three.)

Slashdot

[sir_eccles]

Slashdot - news for nerds, "got bought by dice.com"

Re:Slashdot

[Tablizer]

Slashdot - news for nerds, "got bought by dice.com"

I used to work for a "dot-com" startup, and getting bought out was considered a plus: founders get big bucks and some other shmuck gets the worries of making the contraption actually fly (i.e. profitable).

I actually tried a few startups on my own, some even semi-promising, but with a new family, I realized I needed a day-job to pay the bills and couldn't wait around waiting for such to grow big enough to sustain us.

Some lessons:

1. K.I.S.S. - Don't get feature-happy up front. Make "hooks" for planned additions if you want, but don't get carried away.
2. Low overhead - Don't buy junk you don't really need
3. Be adaptable - You will learn about the niche(s) as you go and will need to change to adjust to the knowledge
4. Have a Plan B. You may fail.
5. Keep the service super-cheep or free to attract customers at first. Few will pay top dollar for a new service.

Hmm, oversaturation maybe?

[ErichTheRed]

Just looking at some of the reasons for failure, I see a potential problem:
"WhatsApp for customer service"
"Tinder for jobs"
"Flash sales for toddlers"

I understand it's the '10s now, and companies can start up with an AWS account and big enough credit card limit, but it seems to me like the primary reasons for failure are (1) just a stupid idea that has no way to make money or gain customers, and (2) oversaturation and copying of "successful" companies' business plans or apps. That's one thing that hasn't changed since the 90s -- the only difference is that the companies get to hang around longer because they aren't blowing 6 figures on Sun servers and colo charges.

The offline analogue would be the frozen yogurt shop or cupcake bakery that have popped up in recent years. Nothing wrong with either, but I have seen so many of them come and go, and I feel bad because I know why. I'm sure most of those business owners read some article or listened to their friends describing the ultra-high margins to be made in the yogurt business, or living their dream of being a cupcake baker. They probably had visions of hordes of people descending on their perfectly-located shop and emptying their wallets on the counter. So, they quit their job, cash in their 401(k) and invest 6 figures to open up. Six months later, they're gone. The reason I feel bad is this -- sure, people make their own decisions and stuff, but after they've lost everything in a disastrous business venture, most peoples' lives are going to be significantly harder than if they hadn't wasted all that money. It's even worse if the owner is just a franchisee -- then the franchisee is getting rich off of the deal too.

Re:Mmm, clickbait

[neilo_1701D]

You'll Totally Believe Why These Startups Failed

Was it because they were in the business of generating clickbait headlines?

If that was the case, the headline would be more like :
"You won't believe the one simple trick these guys didn't know before starting a business"
"UNBELIEVABLE! This one website might SAVE your business!"
"4 in 5 business owners are doing just ONE thing wrong. Find out this SHOCKING secret!"
"Learn how THESE business didn't follow this ONE simple trick"