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The Biggest Start Up Fails That Might Surprise You

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Start Up’s usually sell a lifestyle many want. The fancy life and laid back office structure is nothing short of spectacular.

What they don’t tell people is that 90% of startups fail within the first two years for a number of reasons.

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These include poor planning and lack of funding among many more. Here are some of the notable startup fails in the past.

 

WebVan.com

WebVan was created in 1996 during the dot com bubble by Louis Borders. Its headquarters were in Foster City, California, United States. The company primarily dealt with delivering grocery to the client’s doorsteps. 

It delivered products to customers’ homes within a 30-minute window of their choosing. At its peak, it offered service in ten US markets: the San Francisco Bay Area; Dallas; Sacramento; San Diego; Los Angeles; Orange County, California; Chicago; Seattle; Portland, Oregon; and Atlanta, Georgia. The company had hoped to expand to 26 cities by 2001.

Within a few months since launching, the company raised close to $800 million from blue-chip VC funds like Sequoia Capital, Benchmark Capital, Softbank, Goldman Sachs, and even Yahoo.

The company also raised $375 million from its IPO where it sold 25 million shares at $15 each.

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It failed after three years of operations. The company lost over $800 million and shut down in June 2001, filing bankruptcy and laying off 2,000 employees. 

As part of its shutdown process, all non-perishable food was donated to local food banks. According to reports, it failed because of expanding before perfecting the product.

“The company committed the cardinal sin of retail, which is to expand to expand into a new territory…before we had demonstrated success in the first market. In fact, we were busy demonstrating failure in the Bay Area market while we expanded into other regions,” Mike Moritz, the Sequoia Partner who was the board member at Webvan, said.

 

Call9

Call9 was co-founded in 2015 by Celina Tenev, a radiology postdoctoral fellow from Stanford, and an emergency medicine physician and faculty at Harvard Medical School called Timothy Peck. 

The company provided medical equipment and a video platform (via iPad) that enabled doctors to talk with nursing home residents. 

Using the iPad, the patients could call into their doctor and get medical advice – in their own living room instead of having to call an ambulance or even drive somewhere by themselves.

The company raised $34 million and was once a high-flyer but it struggled to secure additional financing.

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It failed and laid off its over 100 employees in 2019.

 

Yik Yak

Yik Yak was founded in 2014.

It was a messaging app that offered users the ability to post anonymous messages shared with those nearby, and, as such, caught the attention of students in both high school and college, who used the app to share gossip on campus without their names attached.

It was an instant hit, with co-founders Tyler Droll and Brooks Buffington raising about $73 million.

The anonymity feature which attracted students inevitably fueled online cyberbullying leading to the app crashing in 2017.

 

Pets.com

Pets.com  sold pet supplies to retail customers with headquarters in San Francisco, USA.

It was started in 1998 by Greg McLemore and Eva Woodsmall before Julie Wainwright bought it the next year. Pets.com attracted big-name investors like Amazon.com and raised a whopping $82 million during its IPO in 2000.

Sadly its business plan had many loopholes considering how hard it is to drive online sales for pets.

It closed down after nine months after the IPO with stocks crashing. From launch to liquidation, the whole thing lasted 27 months.

 

Juicero

Juicero was a company that made a device for fruit and vegetable juicing. The startup founded in 2013 by Doug Evans raised $120 million.

It offered pre-sold packets of diced fruits and vegetables that users plugged into the $400 machines, which then transformed the contents into juice.  

Juicero failed to build a profitable business after raising a substantial amount of funds under the claim of innovation and disruption. The product was criticized for not solving any problem as anyone’s hand could do the job of the $700 machine.

They filed for bankruptcy in 2017.

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