According to a recent Wall Street Journal article, the vast majority of startups—over 75%—never return cash to their investors. And when it comes to long term viability, the figures are even bleaker: 9 out of 10 startups will ultimately fail, according to Fortune.com. The upside is that plenty of learning lessons exist for scrupulous entrepreneurs looking to avoid the mistakes their tech predecessors.
From India’s largest edtech platform to the web’s first online grocery store, the following are 15 once high-flying tech startups no longer in existence and lessons learned from their experiences.
Mountain View, CA-based Beepi developed a leading peer-to-peer used car marketplace with over $100 million in VC funding in the bank. The company sputtered after it lost the support of a key strategic investor in China, eventually merging with Fair.com. Hyper-expansion and raising too much, too soon have been cited as main causes of the startup’s failure.
Based in Mumbai, Purple Squirrel Eduventures was an edtech platform targeting the supplemental education market. The company suffered from mismanagement of funds and a faulty business model that failed to generate positive cash flow, leading to the company’s demise in 2016.
YouCastr was a popular digital video platform that allowed broadcasters and producers to easily monetize their videos online. The company’s founders cited a few key reasons for their demise: lack of love for the idea, too many founders, failure to pivot fast enough, to name a few.
AskMe.com was a leading Indian online classifieds and ecommerce website with a solid offering and ample venture funding—$300 million USD, to be exact. The startup nevertheless failed due to lack of transparency with both vendors and employees, operational mismanagement, and lack of accountability/trust.
RiotVine was an online social event guide that allowed users to easily discover events and share them with friends. Unfortunately, the offering never generated enough market traction to fuel its expansion—and the company’s lack of a business model eventually sealed its fate.
EventVue was a leading online community builder for events and conferences that enabled attendees to search for and connect with each other. The company’s founders attempted to ramp up sales for a weak product far too soon; additionally, they cited the favoring of expediency over talent and competency in hiring decisions as another major error.
UK-based Powa Technologies was the maker of PowaTag—a mobile payment app that enabled direct purchases via smartphone. Overvaluation of the company and falsehoods spread by the company’s founder led to its highly-publicized downfall (read: don’t lie.).
SubMate was a social networking app for subway riders that enabled users to connect with fellow riders with similar interests. The founder kept his day job while running the startup—and cites this lack of commitment as the main driver of the company’s demise.
SMSnoodle was an SMS-based entertainment channel targeting the Singapore market. Unfortunately, the founders didn’t fully validate their startup idea; they ended up overestimating the local market and driving the company to the ground.
TinyOwl was a Mumbai-based startup with an app for ordering food from local restaurants. The company received $27 million in funding but eventually bottomed out due to over-aggressive hiring and lack of competent leadership. Additionally, the company’s offering was just one in a sea of similar players competing in a saturated space.
Guvera was an Australian music streaming company that managed to raise $185 million before seeing its $100 million IPO blocked by the Australian Securities Exchange. The company was scrutinized after failing to account for $180 million of missing venture funding.
Wesabe was the developer of a personal finance app that, at the time, was second only to Mint.com. Unfortunately, second place in the tech startup arena means eventual demise; the company shut down less than a year after its competitor was acquired by Intuit in 2009.
Monitor110 developed a cutting-edge, real-time financial research suite that tracked RSS, deep web, static web changes, and other data sources for institutional investors. The company failed due to several critical failures, most notably weak leadership, excessive PR efforts, lack of consistency in the product vision, and overspending.
The Pets.com sock puppet was arguably the most iconic startup mascot of the dot-com era; unfortunately, this brand recognition failed to save the company from demise; the company closed its doors in late 2000. In the end, the Amazon-style offering for pet owners failed to generate enough revenue to support the company’s rapid business expansion.
Webvan was the world’s first online supermarket to offer fast delivery of groceries to the customer’s doorstep, in 30 minutes or less. The company failed due to its missteps in scaling too big, too fast—especially in building out its transportation and logistics network. Additionally, its leadership team had no experience in the traditional supermarket space to bolster the company’s position in the business.
In short, the narratives behind the rise and fall of these tech startups offer a wealth of knowledge to startup founders looking to avoid the pitfalls of entrepreneurship. Keep these stories in mind when planning and executing your startup business ideas—they might save you from failing too hard, fast—or perhaps not often enough.