There are times when startups are not able to sustain the goals they started out the venture with and wither away. Here's a blog that talks about four such startups which were unable to get to the finish line.
We live in an age we can rightly call the “Startup Age.” No matter what industry, occupation or location, we always think we can choose to become an entrepreneur - “It’s so easy, let’s just build our own startup.”, “How hard can it be?”, “If he can do it, I can too.”. But the reality is that it is tough to do and will take everything you have in you.
The entrepreneur in each of us is just a “mind-boggling blog” away. It’s where we learn about the entrepreneurial journey and the obstacles faced to get there. The story ends with how either the victorious entrepreneur overcame the odds or the frustrated entrepreneur needed a few beers to get past the frustration.
Just because one person was successful doesn’t mean you’ll be. Startups come and go all the time without making their mark on the world. In this blog, I'll talk about the startups that didn't make it to the finish line.
Duration: May 2013 - May 20, 2015
Money Raised: $2.5 Million
Investors: Andreessen Horowitz, Index Ventures and Slow Ventures, and an investment by Marc Benioff.
Founder(s): Kyle Kirchhoff
Overview: Leap Transit focused on making commuters' lives easier using its iPhone app. It was basically a smartphone-powered shuttle service with perks like heat/AC, leather seats, Wi-Fi and other luxurious amenities.
Leap Transit was a privately owned transit company based in San Francisco, California. It began operations in May 2013 with a single chartered bus, which it briefly operated, calling it a “beta test.” It began full operations on March 18, 2015, with four full-sized refurbished buses that included all of the above-mentioned amenities. It charged $6 per ticket each way.
Closing Reason(s): Leap Transit discontinued operations on May 20, 2015, after receiving a cease-and-desist notice from the regulators after a disagreement. The California Public Utilities Commission (CPUC) issued the notice based on charges that Leap Transit failed to provide proof of liability insurance, worker’s compensation insurance and driver testing compliance.
While they had been granted an “authority to operate,” they had not received a license from the state. The temporary pause became permanent when their buses were auctioned in October 2015.
Duration: Jan 31, 2011 - 2015
Money Raised: $5.5 Million
Investors: VTF Capital, TenOneTen Ventures, Mayfield Fund, Tony Hsieh and Recruit Strategic Partners.
Founder(s): Collin Vine and Maren Kate Donovan
Overview: Zirtual was built to assist professionals around the world with managing their busy schedules. It provides dedicated, U.S. assistance to professionals in need, from meeting management to day-to-day life activities to travel itinerary preparation.
Zirtual assistants did everything to ease the hectic schedules of working professionals. Zirtual offered flat, monthly and annual rates, that were chosen based on the needs of each individual professional.
Closing Reason(s): Zirtual laid off all 400 of its employees overnight in an email, without providing any of them with fair warning, in August 2015 after a last-minute round of funding failed to come through. CEO Maren Kate Donovan later said, "the numbers were f*****" and the company had overstaffed without achieving matching demand”.
Duration: May 1, 2013 - Feb 24, 2017
Money Raised: $23.2 Million
Investors: Graham Holdings, Social Capital and Techstars
Founder(s): Kyle Hill and Mike Townsend
Overview: HomeHero was a non-medical home care provider using technology and human compassion as its pillars. It was an extension of the health system into the home.
HomeHero provided premium, high-quality home care to individuals and their loved ones, featuring trained, licensed and bonded W-2 employees and $4 million in insurance coverage. The goal was to partner with insurance companies to help cover the costs so as to reduce the risk of hospitalization, thereby lowering insurance costs and expenses. Despite this vision, the company couldn’t be saved.
Closing Reason(s): CEO Kyle Hill announced HomeHero's shut-down in a Medium blog post.Hill claimed the company’s closing was due to switching caregivers from 1099 to W2 status. As a result, the company lost its core identity, which, in turn, cost it its business.
Duration: 2015 - Aug 26, 2016
Money Raised: $5 Million
Investors: Michael Birch
Founder(s): Furqan Rydhan, Michael Birch and Shaan Puri
Overview: BLAB was a video chat platform where people socialized and exchanged opinions and work. It was a social network designed to provide users a platform for connecting and engaging in live video chats. Up to four people could simultaneously participate in an alive video, with many others tuning in to watch within an instance of a "blab." People could use BLAB to ask questions and chat in real time, as well as exchange links on BLAB, Twitter or Facebook.
People in the video chat could drop out at their convenience while others could join to replace them. Additionally, BLAB allowed people to record and download the conversation, which was a favorite feature of the content creators who were active on YouTube and other such platforms.
Closing Reason(s): In an August 13, 2016, post on Medium, Shaan Puri declared BLAB to be dead, stating, “Most live streams suck.” This was the primary reason for them closing the BLAB doors, in addition, more people were interested in using BLAB to make friends and hang out than companies or individuals were interested in using BLAB to create content.
These failures provide innumerable lessons that cannot be taught any other way. They’re the tough love we need from time to time to achieve and become more successful. The perfect example is that these failures didn’t stop a single one of these founders. They still went out into the world to try to make it a better place—one startup at a time.
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Sawaram Suthar (Sam) is a Founding Director at Middleware. He has extensive experience in marketing, team building and operations. He is often seen working on various GTM practices and implementing the best ones to generate more demand. He has also founded a digital marketing blog - TheNextScoop.
