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Startups That Failed: Reasons and Lessons from Delicious, Imzy

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Startups are actively developing and obtain good investments. But in fact, it should not be considered as a panacea for failure. Getting an investment is only half the battle. It is of high importance to dispose money properly and turn a small company into a company of world renown. As practice shows, it is not so easy, even if you have more than $ 100 million in your pocket.

Delicious

Well-known all around the globe site is finishing its operation. It was founded in 2003 by Joshua Schachter. They began as a small MVP project. It attracted 300,000 of registered users within a year and a half. Such great activity interested Google, Yahoo and Amazon and by the end of 2005 the company was bought by Yahoo. After that Delicious was resold 4 times more. The last owner was unremarkable company Pinboard, which was an indirect competitor to Delicious. The transaction amount was $ 35,000. New owners disabled API support and took away ability to add bookmarks. From then Delicious will offer owners to use the Pinboard and in fact is acting as an advertising platform. However, in far 2005 Delicious was estimated at $ 15-20 million.

Reasons why startup failed
The main reasons are errors in the decision making of Yahoo management and competitors active actions. While its existence, Delicious team didn’t take significant steps to make its product more competitive. Also the main thing how to hire right developers for a startup.

Imzy

Imzy was founded by Dan McComas and Jessica Moreno in 2016. Before they had been working for Reddit and had gained immense experience with creation and further development of powerful community. During the first few months of work Imzy received tens of thousands of loyal users and 6,000 communities. The idea seemed great to investors and the startup received $ 11 million in total of investments. The next year has to be in crypto-era. Have you thought about how to build own cryptoexchange platform?

However, in the first half of 2017 its founder, Dan McComas, stated in his blog: “Unfortunately, we were not able to find our place in the market. We still feel that the internet deserves better and hope that we see more teams take on this challenge in the future.”

Reasons why startup failed
According to users’ reviews, this platform had problems with the promotion. Many users just did not know that this startup was available. This probably happened due to lack of focusing on the target audience. Moreover, users noted the following technical problems that occurred: slow speed, confusing navigation, user-unfriendly interface, etc.

Maple

Maple project was launched in 2014. Its interesting idea promised a great future for the startup. A complete cycle of business processes was the main peculiarity of the project. They were engaged in buying food, cooking and further delivering. Maple received great support by the famous chef from New York, David Chang. Maple managed to get $ 29 million investment within two years of its existence. Though, in May 2017 it was suddenly announced as to the project closure and merging its part of the team with Deliveroo. Thus, the best solutions and technologies will be for sake of another business development.

Reasons why startup failed
The idea and implementation of the project were really great. Automated processes allowed serving more than a thousand customers in New York daily. Most likely, the reason for the failure was the costs increase and low income per each order.

Beepi

That was a platform which integrated sellers of supported cars and buyers. The startup was founded in 2013 and for 3 years of operation received investments of $ 150 million in total. These guys had a great future and no one thought about its finishing until the end. The company estimated cost was $ 2 billion. In 2016, Fair.Com was going to acquire Beepi, but the deal wasn’t made. After that, DGDG also held negotiations on the startup purchase but the deal failed one more time. Financing was expired and it was announced that the company was closed in February 2017. If you're thinking about own website business then check out what to build the first website or mobile app?

Reasons why startup failed
Excessive risks were considered as the main reason for its failure. The business idea was the following: a car was bought from the owner and resold to the buyer. In this scheme, many cars were in the warehouse waiting for a new driver. Thus, the working capital was frozen and Beepi faced the difficulty of finding a sufficient number of new customers.

Luxe

Luxe application solved parking issue in a very original way. It offered a personal wallet that would help user to have a free space for the car. The startup was launched in 2013 and raised $ 75 million of investment. Founders had big ambitions, however, in 2017 it was announced that they were closing the application and changing the work concept. Still, Uber held negotiations on the purchase of the company in June.

Reasons why startup failed
The main reason for the failure was insufficient popularity and high staff costs.


Startups That Failed: Reasons and Lessons from Delicious, Imzy key takeaways:
  1. Delicious
  2. Imzy
  3. Maple
  4. Beepi
  5. Luxe
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