We have seen people always discussing, informing, and addressing the success stories. Whether it is education, entertainment, startups, or any industry, everyone knows the success stories. But what about the failure stories? Was their story not worth the effort to reach the like-minded audience?
No doubt that Success stories will give you all the motivation and inspiration to gather all your energy to work towards your goal. But it’s actually the failures, that will finally help what mistakes you need to avoid, where things went wrong, what solution could have made the things work.
Even if you know everything about A to Z on Entrepreneurship and Startups, remember this quote by Jason Huertas:
“You think that you know it all. After all, you’re already successful in your mind, so who cares what others have to say? Fight that urge every day… You know nothing.” – Jason Huertas, My Startup Failed
To know more Life-Changing Quotes about Failure, Success, perseverance, getting started, refer to this article on 51 Life-Changing Moti Entrepreneurs to Ignite their Inspiration.
With the Startup Genome Report citing that 92% of startups fail within three years, there’s something to learn before you start off into your company. Remember that, for every Flipkart, Oyo, Paytm, or Ola, there are 90 other failed startups. Let’s take a look at these startup failure stories, the lessons learned, and how you can avoid them.
Started running on 26th October 2015, Viu is a Hong Kong-based over-the-top (OTT) real-time video supplier from PCCW Media, that happened to be the subsidiary of PCCW.
Viu’s Initial Success Journey
Viu had a huge presence in business sectors across Asia, Africa, and the Center East. India was one of the basic markets for Viu due to the exponential development expected in the real-time video industry in India. As per a report by PWC, India’s video real-time industry is good to go to develop at a CAGR of 21.82% to arrive at Rs. 11,977 crores by 2023.
Additionally, reports recommended that OTT is to see multiple times development in the following three years. Till a particular point in time, Viu India was no special case to the given details. Viu had garnered 6 million monthly dynamic clients in March 2017 from 4 million monthly dynamic clients in November 2016, a half development in around 4 months.
What Went Wrong
- Viu’s launch in 2016, was a gigantic accomplishment across different markets yet couldn’t capitulate to the cut-throat and complex Indian market. Albeit one of the chiefs referenced that the choice was sudden, others contended that they could have seen this coming.
- The high-level exits, demolishing of the group, dismissal of new thoughts or ideas were all clues to the unstable eventual fate of Viu India.
- The main purpose of the failure of a startup was the lack of budget. They became helpless in fronts of rivals like Netflix and Amazon Prime.
- To sum up, Viu became the first victim of the hyper-competitive and cash-intensive Indian OTT space.
“Giants like Netflix and Amazon are spending $5-10 million on one show in India, and we had a total budget of $15 million. Even the marketing budget that was given to us was just $8 million. You cannot create a big OTT play with such a low budget”.-A representative told ET
Viu at present has not closed activities in India. However, they are before long going to twist up. Their top administration has just left, and the greater part of the representative quality is on notice.
Viu’s failure is a lesson that it extremely necessary to keep an eye on the competitors and the market you are focusing on.
Launched in 2012, Russsh was an on-request delivery service offering top-notch solutions for people and organizations.
“Services like RUSSSH are easy to market at a very low cost. It is not possible for every restaurant or grocery store or medicine shop to have its delivery mechanism in place. RUSSSH fills that gap from the demand side.”
-Ajay Ramasubramaniam, Overseer of India, Zone New businesses
Russsh’s Initial Success Journey
Despite the fact that the model looked very encouraging, the organizer found it challenging to persuade VCs about raising funds dependent on the idea. Russsh was quite successful with its business deals. It claims to have finished 300,000 errands to date. Its delivery armada comprises of 60-80 heads at a time.
Around 150 undertakings were prepared day by day, and that goes up to 200-odd during the celebration season. The normal assignment charge was Rs 300 and could go up to Rs 1,500 relying upon the area, travel time, estimation of substance to be conveyed, and so forth. The startup had reached five lakh tasks and claimed to have a database of over 50,000 loyal clients.
What Went Wrong
Self-funded Russsh did not have the cash-flow or the capital to take on greater rivals in the space. Since it did not have the capital, it couldn’t offer discounts like other emanant players—an essential to prevail in the rebate driven Indian Market. Some of the reasons to surrender were the inabilities to get the right team on board and to raise funding.
The organizer further notices, “We’re a solitary originator organization and investors are consistently careful about subsidizing such new companies. We experienced the market-not-tolerating stage. Presently, I think we’ve arrived at a self-supporting model, and need assets to grow our innovation, ability, and tasks.”
Remarking on the explanations behind the shutdown, founder Bharat Ahirwar referenced,
“Despite the fact that we have closed down on a positive note, probably the most compelling motivation to give up was not having the option to get the correct group ready. Our failure to raise any sort of subsidizing additionally constrained us to be simply stuck in Mumbai. It is troublesome when a solitary author controls an organization.”
It is important to have a set of the like-minded team at your workplace who can contribute to the challenges that your startup faces. It is likewise essential to raise funds whenever the situation demands even if you are a bootstrapped organization.
Also, refer to our article on A Glossary of 51 Startup Terms Every Entrepreneur Must Know.
An organization with a huge brand name, a practical development model, and reasonably responsive clients. Tolexo had everything that one could request. Be that as it may, this B2B wing of IndiaMART InterMESH Ltd. out of nowhere shut down, leaving 300 workers jobless.
Tolexo Initial Success Story
Sponsored by industry mammoths like Intel Capital and Bennett, Coleman, and Organization, Tolexo was the glad substance of the online retail, commercial center for IndiaMART. It was planning to run on both B2B retail and B2B discount models at the same time.
What Went Wrong
Unfortunately, the adventure kept going until the FDI policy gave by Branch of Modern Approach and Advancement (DIPP) forced a roof of 51 percent FDI in multi-brand retailing. This was dependent upon government endorsement and generally watching complex conditions. The strategy offered to ascend to the vagueness in the meaning of “online commercial center” and furthermore gave a 100% FDI consent in the discount advertise, giving practically no way for the retail business to sustain.
Demonetization was another deadly blow, which at last prompted the disappointment and shutdown of this ‘high on the money down’ model as it couldn’t endure further.
A senior employee there said, “Last week, we had a town hall meeting in which the CEO told us that post demonetization, our sales have drastically gone down and operations would considerably shrink. While around 30 to 35 people have been shifted to IndiaMART, the rest have been asked to leave.”
Tolexo reveals to us how inconsistency in guidelines or the dynamic idea of the administration control and strategies can completely give a lethal hit to your startup. Initially, the FDI circular and then demonetization. Until you are prepared well ahead of time, there can be no redeeming quality for your startup.
Cardback Initial Success Story
In 2012, Nidhi Gurnani and Nikhil Wason, brought $170,000 up in a subsidizing round drove by noticeable investors Rajan Anandan, Sunil Kalra and Alok Mittal in June 2014. With a comparatively radical thought, Cardback was a payment suggestion application deliberately intended to help different cardholders set aside cash each time they made a payment.
A splendid thought, right?
What turned out Wrong?
After the first funding round, the startup failed to raise more funds. Another blow was the way that there was an absence of interest in the product. In a report by MoneyControl, the originators were of the supposition that the Indian market doesn’t understand the product that Cardback brought to the table.
In a nation loaded with recent college grads where the administration is attempting to make the economy cashless, it is truly hard to digest the failure of such a startup with a thoughtful idea.
Cardback was a magnificent thought. In any case, in a nation where individuals are as yet stuck on cash orders, questioning the believability of ATM cards and doubtful of getting advances, an application to manage them to become fund innovation keen probably won’t be the most brilliant activity.
“The kind of investor ecosystem in India was not suitable for the product like ours, which needed deep pockets to educate customers in the safety and security of our products,” Founder, Neha Gurnani said.
It doesn’t make a difference if your product is innovative; if you project it on the wrong audience, you are doomed anyway. After all, it’s the customers behind every successful company. Market research, competitor analysis, understanding of market challenges within the industry, customer demands and requirements, psychoanalysis of the customers and market trends are some of the most important aspects of the business that are most important to be studied well before entering into any industry.
Shyp’s Initial Success Story Will BLow off Anyone’s Mind
Shyp was established to make delivering things all around as simple as “two taps on a cell phone.” Just a couple of months after dispatch, Shyp managed to get into one of the columns of the New York Times and heavy investor interest. Shyp had everything that San Francisco-based venture capitalists were looking for. It was clear the torment focuses they were handling reverberated with a huge crowd.
For starters, they worked on an app-based business model that was the pinnacle of recent on-demand service models. This was taking the whole world by storm and independent couriers that were personable and incentivized to often arrive before their 20-minute promised time.
What Went Wrong
Fast development made the audience compare them with Uber, and as President and organizer, Kevin Gibbon, clarified in his blog entry laying out the end of Shyp, he clarified:
“Uber had changed how buyers pondered transportation. We could do. Likewise, I was told. Also, I trusted it. The numbers recounted to a story, and I became focused on that story.”
As buyer development eased back, Shyp couldn’t stay aware of its own development. Instead of re-modifying its strategy from customer acquisition, Shyp stumbled. In spite of the fact that Gibbon did, in the long run, accept the counsel to hinder development and re-situate the organization, at that point, it was past the point of no return.
Don’t hyper-center around vanity measurements. Act rapidly and pivot early if necessary. Late decisions and early mistakes blocked the organization’s potential with a fruitful future and led to Shyp’s destruction.
Beepi’s Initial Success Story
Beepi’s trade-in vehicle commercial center made a major sprinkle when it was first established. In a universe of detonating on-request commercial centers, Beepi’s future looked brilliant to buyers and speculators. In 2015, Beepi made sure about a powerful $60 million series B funding round. The company raised $149 million on what was a $560 valuation of the company at its high point.
What Went Wrong
Considered an exemplary case of an organization with a “smart thought and terrible execution,” Beepi’s high consumption rate prompted the organization’s death. The administration was famous trivial, with TechCrunch detailing that Beepi’s CEO was experiencing $7 million monthly loss because of “terribly significant compensations” and spending on pointless additional items like a “$10,000 couch” for an executive’s private office.
The originators may have additionally been determined to raising an excess of cash too early and were forceful while negotiating for a higher valuation. Reports additionally state administration was likewise known to micromanage choices, not allowing their representatives to act rapidly and learn. Finally, Beepi had to lay off its 180 staff individuals.
Beepi blew through their $149 million in the financing, consolidating its residual parts to Fair.com, later announced an endeavor to reimburse creditors.
Be mindful, not presumptuous, and extravagant – cash runs out when you expect it won’t.
Success Story of Juicero
Established in 2013, Juicero was known for its $699 wifi-associated extravagance juicer that necessary restrictive juice packs. Founder Doug Evans, contrasted himself and Steve Jobs in his crucial squeezing flawlessness, clarifying how his juice press had the power to “lift two Teslas.” Tech sites named Juicero, the “Keurig for juice.”
The main selling points to justify the price point were:
- Cold-pressed packets of fruits bought directly from farmers.
- A proprietary press with enough power to raise two Teslas.
- Zero-clean up
- Great-tasting and healthy juices from fruits and veggies.
- Connected to the internet, highlighting a QR code scanner to verify the packets’ expiration date.
What Went Wrong
In spite of the fact that the CEO, Jeff Dunn, ex-president of Coca-Cola North America, contended that the Juicero was “significantly more” than only a juicer, the general population seemed to oppose this idea. When Bloomberg delivered a video that indicated that their juice bundles could be easily squeezed as fast, if not quicker, buyers were prevented by the apparently out of date and huge machine. Investors likewise communicated that the gadget was bulkier than initially suspected.
Reacting to the negative press, the group reduced the cost of the machine to $399 they didn’t address an actual consumer pain point. What would be the use of all this technology to a normal consumer? Subsequent to moving assets to bring down the cost of the machine and their juice packs, Juicero shut 16 months after its underlying launch. Their last blog clarified that they would have required an “acquirer with a current national new food gracefully chain” to proceed with its strategic make an extravagance juice brand.
Juicero failed because they focused too much on the juice, instead of the real difference-maker: the first and only internet-connected juice platform. It is highly important to user test your estimating and item before launching the final product into the market and react to criticism.
8) Yik Yak
Established in 2013, Yik Yak, the mysterious chat app, overwhelmed schools and colleges. Yik Yak enjoyed a lot of popularity especially in schools and colleges throughout the US in 2013 and 2014. It became the 9th most downloaded social media app in the US and reached 1.8 million downloads in September 2014.
Once the app grew in popularity after its release, they were able to raise additional rounds of $10 million by the same investors and eventually $60 million by Sequoia Capital. At its peak, the business was valued between $350 and $400 million.
What Went Terribly Wrong!
- Tormented by cyberbullies, dangers, and merciless substance, Yik Yak was even restricted from certain colleges like the College of Idaho.
- There were several cases of the police subpoenaing Yik Yak after threats were made on the app. Along with its failure to switch to group messaging, Yik Yak couldn’t keep up its buzzworthy quality. Finally, before the finish of 2016, application downloads declined 76% from 2015.
- These kinds of egregious offenses were more notable on Yik Yak compared to other social media platforms like Twitter, Instagram or Facebook because of Yik Yak’s anonymity.
- With its poor public image, Yik Yak failed to find any substantial advertisers and couldn’t find a sustainable business model.
Yik Yak shut all its operations in April of 2017.
Abstain from falling into the “trending” trap. Trends are monetary. Apply them on some of your products, but not on your entire business.
Final Thoughts: Startup Failure
The founders of these Startups didn’t expect their company to see such a fate. Of course, you, as an aspiring entrepreneur wouldn’t like to. It’s not that reputed startups or unicorns wouldn’t have faced such a situation in their journey. Every company faces challenges but the company that faces them with wonderful solutions only thrives to exist and become giants like Amazon, Ola, or OYO. All the above- mentioned startup failure stories are eventually a stepping stone towards learning for budding entrepreneurs.
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