Any story of failure could be a success story. Both one’s own and other’s mistakes can be learned from, and parsing mistakes is sometimes more intriguing than a detective series. The term “startup” is so popular today partly because it corresponds to the frantic pace of change in today’s world. It used to take half a lifetime to realize your mistakes and successes.
And once you launch a startup, you can quickly learn how prepared and blessed you are by fate. It doesn’t matter if you’re starting a resource like Fast.in or your own IT company. So, at least, all the failed startups in this article may contain a lesson – not only for their founders, of course, but also for the average reader.
Here we will look through the history of:
Formspring;
Google Glass;
Homejoy and other companies.
Formspring
Ade Olono invented this question-and-answer network in 2009. More precisely, it was born as a by-product of the online form builder Formstack. One of these forms was a kind of “questionnaire”, which was used surprisingly actively. Who would have thought: people like to answer when they are interested in their life and feel at the centre of attention? So it turned out that there were a million users in the first month of the application’s work.
Teenagers especially liked Formspring – as it was possible to ask questions anonymously or try to guess who wanted to know so much about you. The number of questions soon numbered in the billions. The company was actively raising funds, attracting $15 million in investments by 2011. At the same time, 25 million people registered on the social network. In innovation ratings, Formspring was called the most advanced network.
Unfortunately, anonymity gave rise to permissiveness, and those who responded – of course, under their own names – began to be bullied. Several young people took their own lives, unable to withstand the attacks. In the end, the service was frozen in 2013. Olono did not talk much about the reasons for the crisis. He said the audience was too large and required too many resources for support and moderation.
Google Glass
What about Google Glass? It’s certainly different from a startup as an independent social network. It is all the more interesting, though, to see how good beginnings turned out to be a failure for the giant corporation.
The development of the device began in 2012. One of the main ideologists of the project was Google co-founder Sergey Brin. He pressured the developers, and the first models of Google Glass, which appeared on the shelves in 2014, were, in fact, a “draft” prototype. Oddly enough, the cutting-edge development reminded many of something from mid-century science fiction. Indeed: you put on your head a not very miniature device with a weak battery, and then you start to “communicate” with it.
In 2013, the corporation announced a “research” program that included about 250,000 testers – primarily students – who got the glasses before anyone else. Thus, Google Glass owners were singled out as an “elite”, which did not please most consumers.
Sales of the magic glasses stopped already in 2015. At $1,500 apiece, only about 10,000 were sold in the first year of open sales. It is because people were not ready for the transitional step between the “virtualization” of reality and the usual surfing on a smartphone. But, more importantly, people needed more time to be ready because anyone could monitor, film, and record them with their glasses. In short, amid modest sales, it turned out that the invention might not be illegal at all.
Secret
The Secret has been called “the perfect social network for introverts.”
A typical startup is still a small team, an idea caught in the air, a product created “on its knees,” the first feedback, the first investment, getting it right, collecting potentially gigantic profits and selling the company to a big brand.
Such a startup was Secret, founded by former Google employee David Byttow. An app that seemed to have precisely what conventional social networks lacked: true anonymity. Social networks like Facebook have banished privacy from private life. Secret wanted it back. To give back the ability to tell a secret, share your worries and fears, and find support and sympathy from strangers, opening up only as much as you want. The founder called Secret the only social network for introverts.
Of course, many people jumped at the chance to be themselves – at its peak, 15 million people used the social network. Then, in 2014, Secret announced it had raised $25 million from investors.
But it turned out that “being yourself” without fear of exposure was not suitable for everyone. Secret quickly became a hotbed of bullying, threats, trolling, and twisted fantasies. In Brazil, the network was outlawed and fined Secret $8,000 a day until the app was removed from the Apple Store and Google Market. In the United States, the network was accused of divulging commercial information. Secret also leaked: it turned out that the company’s founders had withdrawn three million dollars for each of the investments they had raised. It gave reason to suspect that social network management did not count on its long existence.
People began to leave the social network, quickly becoming bored with the various facets of anonymous communication. Byttow finally published a farewell post announcing the collapse of a project that had filled him with happiness at first and then was no longer what it had been conceived to be. Some, including Secret users and experts, felt that Byttow had given up in the face of adversity.
Homejoy
In the summer of 2015, the cleaning service Homejoy ceased to exist. According to the company’s founders, this happened due to the tightening of the law against hired workers who were not officially employed by the company and received different benefits than full-time employees.
However, sources inside the company see the situation differently: they point out that the project management, which raised $40 million, failed to reduce the cost of attracting clients (which was “paralytically high”). The project also failed to retain existing clients – the company arranged generous campaigns, but almost no one who took part in them ordered cleaning services repeatedly.
They also needed to improve the quality of cleaning, which customers constantly complained about, and to establish an internal control system. Local managers could not set up work with suppliers, and there was a shortage of cleaners – several times, there were situations when the startup founders had to go personally to the call. Although the top managers communicated with the team at first, they conferred with almost no one by the end of the project, and decisions were made in a small circle.