I would define badly as biggest amount of capital raised and than went to zero or acquisition less than 1/5 of capital raised. Though this may be hard to verify as those acquisitions usually has undisclosed price.
Failing fast and cheaply (e.g. below $5 mln) is good and essential for innovation. You can still learn a lot, test some concept and next time be more successful.
E.g. Cost of 1000 dead YC style startups is likely still very positive, while BetterPlace from $850mln to zero is just a drag for the economy. Most likely those $850mln could be deployed more efficiently.
IDK . There are some big things that can only be learned when you invest a lot of money.
For example, Better place. Sure they we're wasteful.
But if they took the same idea, focused in the taxi market in a certain city(for charger density, battery use density, and mayor support) , and maybe worked creatively , instead of needing a new car, maybe using a pickup truck and putting the removable batteries in the back, and deciding on a more sane charging cost - maybe this could have worked.
A few months ago when Craig posted on YC to gather some ideas about who to invite on YC podcast and how it should be structured and I proposed to invite founders whose companies failed along with the ones whose succeeded. Looks like I yet have to see an episode with YC failure company on that podcast.
I’m not surprised. The tech/startup world’s relationship with processing failure is not the passion-fueled thirst for knowledge some may think. It’s just a type of of PR and marketing that works well with a certain crowd. It’s implemented with all the same passive inconsistency as anything else out of these departments.
True, but these are wealthy and calculated individuals we’re talking about. Wealth insulates a person from fear and shame. Intelligence encourages calculation.
I don't know about the stories of failures, but you can view the list of yc companies at http://yclist.com/ it shows the status of some companies as Dead.
This is a fascinating list. If you start from the bottom, you can see how few really survive a anything close to a decade. The "Dead" tag is not updated as a lot of the companies not marked are actually dead or never really took off.
Shows that if you are on the YC rocketship, you either go big and get acquired or die out trying.
I don't really know much about how YC funding works, but some of the startups listed on there are for simple things like browser extensions, which surprises me.
Browser extensions can start out as very simple but quickly turn into very complex pieces of software. Have a look at postman(https://www.getpostman.com/) for example.
It's a fallacy to think that just because a product is a browser extension it must be very low-tech easily-imitable app. I know there are some browser plugins that are quite sophisticated and have a complex programs in the backend. For example: Ad-blocker, LastPass, etc.
I'd guess that pretty much every batch has startups that implode very quickly due to disagreements within the team. The company is dissolved and the founders end up disliking each other. This is pretty bad but nobody has heard of these companies and it's clear the team was just bad. A decent team is able to persevere for some time.
The more interesting examples are companies that had traction, were growing, raised lots of money, but some aspect of the business didn't work out or they got beaten by competitors, and ended up shutting down. Homejoy is one example. The problem is many other companies like this end up getting acquired for some small amount of money instead of shutting down, making it plausible to deny they failed badly.
In the spirit of celebrating failure, I'd very much like to read the stories of what they tried that just didn't work, as hard as it might be to write for some
When I saw this question, only one jumped to mind: flightcar
On the surface I understand why the idea was thought to be a good one. But getting sued by SFO because they didn't have the proper licensing agreements pretty much killed that company. There may have been more, but I remember that particularly.
There was also the personal lingering questions about insurance, questionable whether the customers would be good (one damage incident spoils the well), etc.
The idea was always pretty cool. It's not super well known but they went through another accelerator before YC (The Brandery). The founders were really really young, just out of high school if I recall, so some mistakes were probably related to that. Nonetheless, what they were able to accomplish at the time was impressive.
These days it seems like Uber and Lyft have really captured the airport pickup/dropoff market. It looks like Turo (formerly RelayRides) is still active in the P2P space though, and they've raised $172M.
Thanks for these. For posterity I'd like to add that the Series B round for $20 million happened in sep 2015, investors were very optimistic at that time, and in June 2016 I received notice that they were shutting down.
The former CEO/Co-founder now works for AirBnB.
Failing fast and cheaply (e.g. below $5 mln) is good and essential for innovation. You can still learn a lot, test some concept and next time be more successful.
E.g. Cost of 1000 dead YC style startups is likely still very positive, while BetterPlace from $850mln to zero is just a drag for the economy. Most likely those $850mln could be deployed more efficiently.