
Startups that were massively funded that died in 2017 - altstar
http://www.businessinsider.com/startups-that-raised-148-billion-have-shut-down-or-may-soon-2017-7/?r=AU&IR=T
======
jksmith
So many of these startups seem to have fragile, non-strategic products to get
these valuations. I don't understand how they get funded in the first place.
Hopefully my first jaded thought is further from the truth than I suspect it
is, which is some college grad whose dad is plugged in gets his weak idea
funded. Or maybe the far uglier truth is that venture actually has that much
money to flat out waste.

~~~
CryoLogic
I agree with this sentiment. I have found that with a little big of economics
I've been able to pick out successes much easier than large VC firms.

It almost seems as if many of these firms are throwing money away without even
thinking over the 101 level business requirements: expenses, revenues, growth
rate, 2nd derivative growth rate, market size, profit per employee etc.

~~~
marcinzm
Why do you assume that VCs don't know this rather than assume that the market
creates forces which make them not care?

I'd guess there is more money floating around than there are startups which
meet all the metrics. Thus there's investment in riskier ventures (remember it
doesn't matter if any startup succeeds as long as the fund comes out on top as
a whole). Moreover startups which do have all these metrics may have many
competing VCs which in turn lowers the return for the VC.

~~~
eight_ender
This plus FOMO will continue to be a big factor until more and more of these
bad ideas implode.

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propman
I saw the CEO of Quixey give a talk when it was blowing up and was blown away
by how little he understood the technology or the market behind his product. I
dug a little deeper, perplexed at how Quixey raised so much money, and was
extremely underwhelmed by everything. I followed it every few months till it
collapsed and it really did seem like watching a disaster unravel

~~~
kayoone
why exactly ? just watched a bit of this talk
[https://www.youtube.com/watch?v=Rgb505KRHEI](https://www.youtube.com/watch?v=Rgb505KRHEI)
and i did not get the feeling that he does not know what he is doing

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idlewords
The issue is not that these startups fail; the whole idea is that most
startups will fail. It's how much easy money they take with them. It should
not require $59M to learn that delivering expensive food at a loss is a poor
business idea.

The easy money in tech right now is harmful, as it crowds out actual
innovation. But I don't see it getting better anytime soon.

~~~
toomanybeersies
I don't believe that most of these food delivery companies are actually tech
companies. They are just food companies trying to leverage tech to get an
edge. Food delivery has been around for decades.

None of them are particularly original, they're all just variations of the
same thing. Fundamentally there's little difference between Maple and Dominoes
Pizza delivery.

~~~
lobster_johnson
I've wondered for a while why so many restaurants on Seamless etc. have
physical locations (or rather, why there are so few that don't).

Surely it would be a no-brainer to do delivery _only_ , and optimize for that.
Select a few cuisines, get great chefs to develop recipes that anyone can be
trained to execute flawlessly, set up locations strategically situated to
minimize delivery time/distance. It might not end up being Michelin-star-
quality food, but then none of the places I order deliver from are, either.

As a consumer, my biggest problems with delivery are speed and quality. Places
I order from routinely take 60+ minutes to deliver, even if they're close by.
Quality is the bigger problem, and I suspect a lot of people feel the same.

~~~
twblalock
It seems like a no-brainer, but the restaurant business is a cutthroat, low-
margin tough slog and a lot of that comes from the cost of parts (i.e. food)
and labor, not just the storefront.

A delivery-only restaurant still needs to deal with hiring staff, sourcing
product, health inspections, purchase and maintenance of equipment, etc.
That's before the whole delivery thing comes into the picture. If you want
fast service, you have to scale up the staff and get some decent logistics in
place.

I suspect this would only be profitable via automation. But that will probably
happen soon.

------
arielm
I think the “problem” here isn’t one big problem with a single process (VCs
throwing money on bad ideas), but rather a combination of issues that together
result in so much failure.

There’s a lot of venture money out there, and like some other comments
mentioned it needs to _do_ something - and that’s good. We as founders and
consumers want to see that money do something. But...

It needs to do something meaningful. I believe that responsibility lies in the
hands of those that give it. Bad ideas are merely potential opportunities, but
bad business plans, founders with short term vision, and lack of discipline
make this into a real problem.

So many companies can prove their model without big money. Yet, because
investors are hoping for a home run those founders jump right into the deep
end.

I don’t want to say getting money needs to be harder, because ultimately that
could slow down innovation. I do however believe investors need to raise the
bar for founders.

~~~
m-j-fox
Agreed. But more specifically, how can VCs be more discriminating and also not
make getting money harder?

There was another thread today about an interview with some rockstar VC and
his wisdom was: invest in ideas that sound stupid, but turn out not to be. I
mean, here I've been trying to not sound stupid in front of investors and it's
been holding me back.

~~~
andrewflnr
I'm guessing it's a matter of making it harder for some and easier for others,
in a way that makes the "total difficulty" stay the same.

------
Ethereum
“This is a sad time for Beepi and everyone involved. We set out on an
ambitious mission to build a massive company and radically transform a
decades-old industry, and stopped well short of the goal line. We take full
responsibility for that." -Former Beepi CEO

You can't help but feel bad for these guys. You know they must have poured
their heart and soul into these companies. I guess that's corporate Darwinism
for you though.

~~~
ScottBurson
Yeah, my wife and I bought a car from Beepi and it was a great experience. If
anything, I thought it was a little underpriced -- given everything they did
for us, we probably would have paid another $400. I don't really know why it
didn't succeed.

ETA: well, here's a post-mortem (about halfway down):
[https://techcrunch.com/2017/05/25/anatomy-of-a-managed-
marke...](https://techcrunch.com/2017/05/25/anatomy-of-a-managed-marketplace/)

~~~
brogrammernot
They had an inherently flawed model in an industry that has a high barrier to
entry and requires significant cash resources.

Just take a look at Carvana's most recent earnings, they lost something like
40M in the first quarter on revenue of $160M. They're still spending a ton of
money to compete.

Beepi had a flawed model, and ran out of money.

I find it hard to be sad for them as this is what is supposed to happen when
you don't have a sustainable business model.

~~~
defined
I am sad for all the people who lost their jobs as a result of these failures,
though.

~~~
brogrammernot
That's fair. I've been through 2 "failed" startups, one somewhat success and
one that looks promising but you come out the other side of these things
alright.

They learned a super valuable lesson about market for, and it will help them
all in the future having this experience.

------
Firebrand
>Yik Yak - the anonymous social media app that was at the center of several
college harassment scandals - announced its closure on April 28, after
struggling to keep users on its platform.

YikYak was very popular at my univeristy back in 2014. What replaced it? Or
has anonymous social media fallen out of favor all together?

~~~
opportune
Jodel is the main replacement to my knowledge. There might be others too, but
I don't think any of them have caught on very much. It's a shame because there
definitely still is a market for a yikyak clone, but I doubt investors are
going to be very bullish about one.

I think the main reason anonymous social media is out of favor is that it's
hard to monetize. It's hard to gather information (and thus serve valuable
ads) about your users when they are explicitly using your app to not share
that information. When yikyak introduced profiles, I think that was when
everybody stopped using it.

~~~
dylz
Anecdotal, but previously at UCB and now at UW for undergrad I've not seen a
single person with Jodel installed - none of my friends have ever used or even
known about it either.

Is it more EU-targetted or seeded initially?

~~~
v3gas
More EU seeded, I guess, yes. Started in Germany.

------
iosDrone
Make sure to add Blue Apron, it's only a matter of time!

~~~
jcslzr
honestly for me its seems like a pretty good idea, I don't live in the US, so
I really don't know why they are not making money other than not enough
customers.

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flukus
It seems like most of these could potentially have been viable products, but
none of them were ever going to be huge businesses making billions a year.

Why isn't a niche product making people wealthy seen as good enough anymore?

~~~
majani
I think one of the issues is that in VCs allow the hottest start-ups to take
money off the table in later funding rounds. So the question in an
entrepreneur's mind becomes whether he should build slowly and make a few
hundred thousand a year steadily, or whether he should pump up with VC money,
knowing he'll be allowed to take a couple million off the table before the
music stops. It's a no brainer in my mind.

------
pkaye
Jawbone has been around for almost 20 years. Doesn't fit in with the rest.

~~~
skinnymuch
But they took hundreds of millions in normal funding and hundreds of millions
in debt sort of funding this decade. The vast majority of their funding.
Wasn't most of that funding and growth of Jawbone going with the company
trying to semi-pivot into wristbands (UP) along with their services? And a bit
of the Bluetooth speakers I guess.

The 11 or so odd years before that were their Bluetooth headsets only. I think
Jawbone could fit into this list. It's sort of like a spinoff company using
initial foundations around 2011. That's not a good sentence or way of wording
it but I can't think of something better right now. Still, the expectation
from 2011 onward was huge growth with all that funding. Unlike their first 11
years.

~~~
pkaye
Many of the other companies got funding and burned up quickly. Barely got any
traction or beyond their first product. Jawbone had quite a few products over
those years even though it was not a financial success.

~~~
skinnymuch
I understand your point. And I agree they had successful products in a small
scale through 2010 with their headsets.

But Jawbone could've become a completely new company in late 2010 when they
unveiled their speaker. And being close to unveiling their wristbands. All the
money and funding (like 90% of their funding) were done since then. The last 6
years. Jawbone was already flaming out in 2015 and 2016. That's only a few
years after 2011.

------
draw_down
Too bad about Maple. I really like David Chang and he is really trying to
solve a problem he knows a lot about and cares a lot about.

~~~
PhineasRex
Don't feel too sad about it, he launched Ando which is the same thing but
faster and with better food quality.

~~~
draw_down
Oh. Cool!

------
yourstruly33
Mostly crap products. Glad they're gone.

------
kelukelugames
1\. Too bad about maple.

2\. I fear Blind will go the way of Yik Yak. A lot of rude behavior on it.

3\. I'm not a fan of wearable devices. I suspect people enjoy collecting
health gadgets more than actually getting healthier. I also found a Jawbone
speaker in the gym and couldn't figure out how to get it to work with my
iPhone. But that's probably my fault :P

~~~
ramparrt
>3.

Can confirm. I have several wearables lying around no longer being used. The
difference between the fitness devices that I use (smart scales, gps trackers)
and the ones that I don't (pedometer/heart rate wearables) basically seems to
be that the ones I use are measuring and recording data I was previously
interested in before getting a device that tracked it. Ultimately, I can't get
excited about a pedometer because I simply don't care about how many steps I
take.

Also, the fact that the pedometers require near constant use to be worthwhile
means that there's some degree of mental energy devoted to them - is it
charged, am I wearing it, etc. A smart scale I step onto for a few seconds
each day and my garmin head unit is only used when I'm riding my bike so
there's almost no conscious overhead.

~~~
rimliu

      > the pedometers require near constant use to be worthwhile
      > means that there's some degree of mental energy devoted
      > to them - is it charged, am I wearing it, etc.
    
    

That's what I like about my Withings Steel: it's just a normal (and
beautiful!) wristwatch. I am wearing it everyday anyway. Actually I do not
take it off, because it tracks sleep too. I am not worried about charging it,
because it lasts for months. It looks like I get activity tracking as a bonus
functionality. Much much better experience compared to some ugly dedicated
tracker. Let's hope Nokia will not ruin it.

