Startups that were massively funded that died in 2017(businessinsider.com)
businessinsider.com
Startups that were massively funded that died in 2017
http://www.businessinsider.com/startups-that-raised-148-billion-have-shut-down-or-may-soon-2017-7/?r=AU&IR=T
112 comments
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.
I think your second truth is closer to the real one.
There's a lot of capital floating around out there. Most of it is actually foreign, either OPEC sovereign wealth funds (like how Saudi Arabia put $3.5B into Uber) or wealthy Chinese businessmen. All that capital is seeking a productive return: it has to go do something, if it sits in a bank account it'll just shrink because of inflation. Right now, tech is basically the only sector of the economy that has noticeable growth. Hence, anything vaguely connected to tech gets plenty of funding, regardless of how ill-considered the idea is.
The fundraising climate has tightened fairly significantly since 2015 - that's why all these companies are going out of business. But around 2012-2013, the way you got funded was you went out, painted a picture of how everyone in the world would be using your technology-enabled product, and asked lots of people for money. There were so many people with money to invest that you'd be bound to find somebody.
There's a lot of capital floating around out there. Most of it is actually foreign, either OPEC sovereign wealth funds (like how Saudi Arabia put $3.5B into Uber) or wealthy Chinese businessmen. All that capital is seeking a productive return: it has to go do something, if it sits in a bank account it'll just shrink because of inflation. Right now, tech is basically the only sector of the economy that has noticeable growth. Hence, anything vaguely connected to tech gets plenty of funding, regardless of how ill-considered the idea is.
The fundraising climate has tightened fairly significantly since 2015 - that's why all these companies are going out of business. But around 2012-2013, the way you got funded was you went out, painted a picture of how everyone in the world would be using your technology-enabled product, and asked lots of people for money. There were so many people with money to invest that you'd be bound to find somebody.
anyone got any contact details for said wealthy Chinese businessmen (and women!) ?
Seriously, I watched the startupschool video on "how to raise money" and they literally gave zero advice on how to raise money. They just said "you'll need money"
So how does one find Saudi or Chinese money that needs to do _something_
So how does one find Saudi or Chinese money that needs to do _something_
I know this is kind of circular, but you need to cultivate a network of CEOs and VC people before needing to raise. Then you'll know who to raise from or be able to get introduced to others.
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I see hindsight bias lurking. Now we see it as a "waste," but I dare you to make and publicly post predictions about a bunch of startups, and prove you are more accurate than VCs.
Happy to take on the challenge. Two recent investments involve a "Mindfulness" app and an even better coffee machine. Guess who made those investments, while I wouldn't have touched them with a 10 foot pole? They're sophomoric ideas that offer little in the way of fundamentals.
Where's the compelling drive to grow an industry? Where's the compelling argument for making money with a real capitalizeable asset? How do these projects fundamentally grow an area of the economy, put people to work, so they will want to buy these things. make life better and make investors more money?
This kid is what we should be investing in: https://qz.com/909614/a-cameroonian-17-year-old-won-the-goog...
Putting this kid to work is what we should be doing, not goofing around with some stupid ass Mindfulness app in SF. This is exactly the plan I'm working on. If somebody doesn't scoop this kid up, I will at some point.
Africa and South America each represent 6% of the world's app revenue. You want to make some money? Help these continents compete. Help the governments involved learn how to manage their information and build out their IT infrastructure. Help bright kids like the one I linked to use their talents to help you make money and grow their local economies at the same time. That's what I'm interested in.
If vc's in the US have been reduced to investing in yet another goddam coffee machine to sell to the US market, then I'd suggest silicon valley has exhausted their strategic thinking, and have been reduced to daddy and friends giving college grad something to do. It's a waste of money that could be so much more strategically spent.
Where's the compelling drive to grow an industry? Where's the compelling argument for making money with a real capitalizeable asset? How do these projects fundamentally grow an area of the economy, put people to work, so they will want to buy these things. make life better and make investors more money?
This kid is what we should be investing in: https://qz.com/909614/a-cameroonian-17-year-old-won-the-goog...
Putting this kid to work is what we should be doing, not goofing around with some stupid ass Mindfulness app in SF. This is exactly the plan I'm working on. If somebody doesn't scoop this kid up, I will at some point.
Africa and South America each represent 6% of the world's app revenue. You want to make some money? Help these continents compete. Help the governments involved learn how to manage their information and build out their IT infrastructure. Help bright kids like the one I linked to use their talents to help you make money and grow their local economies at the same time. That's what I'm interested in.
If vc's in the US have been reduced to investing in yet another goddam coffee machine to sell to the US market, then I'd suggest silicon valley has exhausted their strategic thinking, and have been reduced to daddy and friends giving college grad something to do. It's a waste of money that could be so much more strategically spent.
Which African countries have both great untapped talent and aren't hopelessly mired in corruption or violence and have a strong western-style legal framework? Those will be the ones that VCs feel safest investing in.
Until they are identified, I don't think VCs will put their money at risk. (They may already exist; I'm pleading ignorance here.)
Until they are identified, I don't think VCs will put their money at risk. (They may already exist; I'm pleading ignorance here.)
>I don't think VCs will put their money at risk.
They're already putting money at risk by investing in startups that are obvious flops. Or even startups that do stuff that won't fly even with western-style legal framework (Theranos).
They're already putting money at risk by investing in startups that are obvious flops. Or even startups that do stuff that won't fly even with western-style legal framework (Theranos).
Of course, but in the West, the flops are due to business failures. I'm referring to systemic risk, where you lose your money due to corruption and graft, often before it even gets into the hands of the venture.
The VCs behind Theranos lost their money due to corruption.
You are correct saying that Africa has it's share of problems, but I don't think they are insurmountable.
You might want to take a look at this project: https://www.kountable.com/
I'm quite proud that I once was a part of the team working on it.
You might want to take a look at this project: https://www.kountable.com/
I'm quite proud that I once was a part of the team working on it.
What if that African kid comes up with a "bullshit" idea that's profitable? e.g sports betting, USSD rebill, celebrity gossip etc, which are all billion dollar niches in Africa. Would you still fund him in that case?
Realistically, what investor would even notice him at this point? How's he going to get in the door to pitch his idea?
What we should try to do is invest in opportunities that get them to the point when they can take a stab at building a startup around whatever they come up with.
What we should try to do is invest in opportunities that get them to the point when they can take a stab at building a startup around whatever they come up with.
What's stopping you from scooping up that kid right now?
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.
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.
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.
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.
This plus FOMO will continue to be a big factor until more and more of these bad ideas implode.
Could you point me in the direction of how to learn these things?
Quite. Luxe: that is some bullshit right there. It's exactly the kind of nonsense company that gives startup culture and "disruption" a bad name. Whilst it's possible to make money off the back of entitlement, that one certainly feels like at least several bridges too far.
What's bullshit about Luxe? I mean, besides wondering how they can make it profitable. I never used it but that's because I have an intense distrust of valets, and I don't think their communication about the experience before you try it was sufficiently detailed (like I don't remember if they had an extra charge if your vehicle is a manual or if they mentioned that all drivers can handle both types), but the concept is great. When my office was in Seattle, I found a lot I could pay $15/day not too far away, but cash only, that's about the cheapest you'll find. Without it Luxe would have been more tempting because you could pay them a very similar daily price, drive directly to the office, hand over your key, and work until you're ready to leave and they drive it back right to the office. They also had extra services like making sure your car would be washed sometime during the day.
It's not much different from food delivery (or grocery delivery), but it seems hard to make a profit. Food delivery companies from arbitrary restaurants have been a thing for a long time, it's great that now there's enough floating VC money to support lots of competition, maybe this time one of them will find out how to be profitable. And the VCs of that one will make a handsome return.
It's not much different from food delivery (or grocery delivery), but it seems hard to make a profit. Food delivery companies from arbitrary restaurants have been a thing for a long time, it's great that now there's enough floating VC money to support lots of competition, maybe this time one of them will find out how to be profitable. And the VCs of that one will make a handsome return.
Luxe is basically an opposite bet to Uber. To invest in Uber is to be long on a future with no personal car ownership and, eventually, self-driving automobiles available on-demand. Whereas, it seems to me at least, that continued, and growing, personal ownership of cars is practically a requirement for Luxe to become a unicorn.
EDIT: changed "self-driven" to "self-driving"
EDIT: changed "self-driven" to "self-driving"
If Uber and Lux were public then the correct bet would have been to bet on both of them.
In effect that's what VC has already done for us, right?
Not really.
Properly hedging requires constant adjustment of the steak to lock in the "winnings" and replacing the losing company with a different one that does similar things but has better management.
Properly hedging requires constant adjustment of the steak to lock in the "winnings" and replacing the losing company with a different one that does similar things but has better management.
Idk. I personally feel like grocery delivery is in the same bucket as valet service.
I desperately want grocery delivery because I _hate_ grocery shopping, at least for normal sundries. Stores move the stuff I'm looking for every few months. It's crowded. You're being hit with ads constantly. I have to laboriously read ingredient labels when a simple online filter (or, at least, cmd-f) would do the trick. Self-checkout systems tacitly accuse you of theft because you brought a backpack and want to put groceries in it, but it weighs more than 2 oz. It's just effing boring and takes forever. High end grocery stores are nicer, but not where I go for the week's eggs.
Delivery is nice too, but the picking is what I really hate. Showing up, picking up a box, and leaving would be fine too. However, if delivery is the main option, I'll take it.
The fact that I strongly dislike Tesco and STILL just set up an account for grocery delivery so I can pay them to pick groceries and bring them to me, because I hate going shopping so much, suggests that this service is needed by at least some people.
I also wanted to use buymie.eu, but I have an aversion to services that would work perfectly well as websites but insist on an app instead.
Delivery is nice too, but the picking is what I really hate. Showing up, picking up a box, and leaving would be fine too. However, if delivery is the main option, I'll take it.
The fact that I strongly dislike Tesco and STILL just set up an account for grocery delivery so I can pay them to pick groceries and bring them to me, because I hate going shopping so much, suggests that this service is needed by at least some people.
I also wanted to use buymie.eu, but I have an aversion to services that would work perfectly well as websites but insist on an app instead.
don't know about the states, but in the UK grocery delivery is incredibly popular.
Most people I know use it with an 'unlimited' subscription and feel the money they save, by knowing exactly what they will be spending and by not having impulse buys, plus the time saved makes it worth it.
Most people I know use it with an 'unlimited' subscription and feel the money they save, by knowing exactly what they will be spending and by not having impulse buys, plus the time saved makes it worth it.
Worth pointing out that here in the UK much, in fact I suspect most, grocery delivery is done by existing supermarkets rather than companies that were originally independent startups.
Ocado might be seen as an exception but even that was started out as a partnership between Waitrose and another company (I forget which). I'm also discounting more niche services, such as Graze, btw.
Ocado might be seen as an exception but even that was started out as a partnership between Waitrose and another company (I forget which). I'm also discounting more niche services, such as Graze, btw.
Grocery Delivery is great. Usually only costs <5 Eur and it saves you a lot of time and hassle. Besides I can put together a list in peace at home and not rush through the store. Personally I'd say its the most useful modern thing there is
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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
why exactly ? just watched a bit of this talk https://www.youtube.com/watch?v=Rgb505KRHEI and i did not get the feeling that he does not know what he is doing
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.
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.
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.
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.
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.
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.
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.
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.
I think that's what the guys at Maple thought. I worked there for a bit when it started, and it seemed to me like they were growing too fast. There would be some pretty serious operational issues (from my point of view), but bang, they would open another hub to serve another thousand people, thereby magnifying the issues. I'm sure they did what they had to do, but after about a year I saw the writing on the wall and left.
But heck, I was just a delivery boy, and lots of people really loved the idea. I'm sure we'll see more delivery startups, and maybe they'll be great, having learned from Maple.
But heck, I was just a delivery boy, and lots of people really loved the idea. I'm sure we'll see more delivery startups, and maybe they'll be great, having learned from Maple.
If they go with high quality and fast delivery, their service might be too exorbitant for most people for them to expand to larger markets.
If you think of it as a trilemma between quality, speed and price, it's unlikely you'll ever find a service that can meet your needs because when a competitor shows up, "worse is better" kicks in.
If you think of it as a trilemma between quality, speed and price, it's unlikely you'll ever find a service that can meet your needs because when a competitor shows up, "worse is better" kicks in.
And if you're focusing on operating efficiency with an digital-only storefront you could try variable pricing.
Want a sandwich at noon? That's $7. Want it at 3pm? That's $4. Want us to drop everything and get it to you in 15 minutes? That's an extra $2.
Want a sandwich at noon? That's $7. Want it at 3pm? That's $4. Want us to drop everything and get it to you in 15 minutes? That's an extra $2.
There's a company in SF called Pythagoras Pizza that does this (https://www.getpi.co/). A 14-inch pizza costs $23 (!!!) but apparently, they're doing well.
Of course there is. Dominoes Pizza exists in every city or town that I can think of, with identical branding, identical product and nearly identical service.
If a startup wants to leverage technology, its founders should approach Dominoes, not try to become a competitor of Dominoes while trying to do something with delivery. Domonoes will crush them like an annoying bug they are.
If a startup wants to leverage technology, its founders should approach Dominoes, not try to become a competitor of Dominoes while trying to do something with delivery. Domonoes will crush them like an annoying bug they are.
While I agree that there's a rather pathological focus of VC money on business ideas that are not especially innovative but really just bad (the whole takeout-but-without-a-profit-margin thing being a particularly absurd waste of investment), there's a problem, in that genuine innovation is not necessarily going to be more immediately sustainable as a business preposition (exhibit A: the internet, product of the grey area between the military industrial complex and academia, neither of which are spheres of human industry over-troubled by anything so vulgar as a competitive marketplace).
Sometimes I wonder if the VC world is the worst possible combination, rewarding merely the false promise of short term impact, as opposed to genuinely worthwhile but perhaps completely unprofitable RnD.
Sometimes I wonder if the VC world is the worst possible combination, rewarding merely the false promise of short term impact, as opposed to genuinely worthwhile but perhaps completely unprofitable RnD.
Is there any reason to believe that the "actual" innovators are missing out on funding because money is being given to delivery startups instead?
Besides, how many "actual" innovations were profitable at an early stage? I take issue with the entire concept of splitting "actual" innovations from attempted innovations, because all successful innovations began as attempts.
Besides, how many "actual" innovations were profitable at an early stage? I take issue with the entire concept of splitting "actual" innovations from attempted innovations, because all successful innovations began as attempts.
I only have anec-data, but I know several engineers who have very interesting hardware prototypes sitting on shelves or gathering dust in basements simply because they aren't the "hustlers" VCs are used to be wowed by.
There's a couple of reasons people like that don't partner with someone who is able to raise the capital more easily, but the most pronounced i've heard was that they don't want to buy into the dishonest-"fake it till you make it" culture that surrounds VC.
There's a couple of reasons people like that don't partner with someone who is able to raise the capital more easily, but the most pronounced i've heard was that they don't want to buy into the dishonest-"fake it till you make it" culture that surrounds VC.
You could suggest to your friends that they consider applying to YC :-)
Even if your friends got the VC money, wouldn't the lack of "hustle" ability hurt their chances of turning the prototype into a successful company?
It depends on the industry they're trying to break into. Some industries prefer their providers to be quiet, competent and not promise things they haven't built yet. In these, the typical VC hustler would be a liability.
Yes, it would. It’s an oft unacknowledged fact.
Companies that don’t play the VC game are harder work but totally possible (and potentially more rewarding) but the VC game requires those “hustlers” because that’s the VC’s expectations.
Companies that don’t play the VC game are harder work but totally possible (and potentially more rewarding) but the VC game requires those “hustlers” because that’s the VC’s expectations.
Yes it would. However, note that it would not hurt their ability to be chief engineer - except that is not happening either.
It's not funding that's the scarce resource, it's user attention.
When thousands of startups with terrible ideas get funded, it floods the market with tons of new products that users don't get any value from. Eventually they get category fatigue and just start blocking out trying anything new. Even if you've got something innovative that you can build yourself, people still need to try it for it to catch on. That's easier when there are few other products vying for attention and users are actively looking for something new.
Fortunately, I think the last mania ended around 2015. Trump has sucked all of the oxygen out of the collective zeitgeist since mid-2016, so hopefully by 2018 people will be sick of being angry at their leaders and looking for small, concrete ways to improve their lives.
When thousands of startups with terrible ideas get funded, it floods the market with tons of new products that users don't get any value from. Eventually they get category fatigue and just start blocking out trying anything new. Even if you've got something innovative that you can build yourself, people still need to try it for it to catch on. That's easier when there are few other products vying for attention and users are actively looking for something new.
Fortunately, I think the last mania ended around 2015. Trump has sucked all of the oxygen out of the collective zeitgeist since mid-2016, so hopefully by 2018 people will be sick of being angry at their leaders and looking for small, concrete ways to improve their lives.
Also, it's not just user attention that's the scarce resource, it's employees, office space, food, housing, and everything else you need to actually run a business.
When you have lots of unprofitable "businesses" chasing after the same limited pool of resources using their big bags of monopoly money, the business environment becomes toxic to fragile, new organisms.
When you have lots of unprofitable "businesses" chasing after the same limited pool of resources using their big bags of monopoly money, the business environment becomes toxic to fragile, new organisms.
> 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.
What would you say might put us on the path to getting better in the long term, and what does better mean exactly? The system we have right now is designed to waste large amounts of money, it will never get better by itself. Won't VCs always seek lower risk, and go for the best ideas they can find that have some chance of working? It seems we could always look at the biggest failures and call it easy money, rip the ideas apart as stupid, regardless of how much actual innovation is there.
Is it fair to characterize the business plan of Maple or Sprig to deliver food at a loss? I assume the idea was to make a profit eventually, but being able to deliver quality on 15 minutes notice can only work on a huge scale.
What would you say might put us on the path to getting better in the long term, and what does better mean exactly? The system we have right now is designed to waste large amounts of money, it will never get better by itself. Won't VCs always seek lower risk, and go for the best ideas they can find that have some chance of working? It seems we could always look at the biggest failures and call it easy money, rip the ideas apart as stupid, regardless of how much actual innovation is there.
Is it fair to characterize the business plan of Maple or Sprig to deliver food at a loss? I assume the idea was to make a profit eventually, but being able to deliver quality on 15 minutes notice can only work on a huge scale.
I think that as initial capital requirements go down the only ideas that seek out VC investment are those that less validated. The VCs agree to invest in these "moonshots" that need to bleed for a few years maybe because there is a belief that increased difficulty means greater reward. (Like a video game)
The risk may actually not be that high due to the liquidation preferences and the inflated prices and hype may actually be promoted by the VCs themselves so they can offload at high prices. The most important factor for this pump and dump is the founders personality.
Crypto ICOs eliminate much of this potential as whilst in the VC model the investor needs to be thinking pump-and-dump. In crypto, every buyer must be thinking this. Ironically due to the hype in cryptocurrencies the hype may be so widespread that this does indeed happen despite it being able to completely upset the funding model. (That large capital requires impressing specific keyholders)
The risk may actually not be that high due to the liquidation preferences and the inflated prices and hype may actually be promoted by the VCs themselves so they can offload at high prices. The most important factor for this pump and dump is the founders personality.
Crypto ICOs eliminate much of this potential as whilst in the VC model the investor needs to be thinking pump-and-dump. In crypto, every buyer must be thinking this. Ironically due to the hype in cryptocurrencies the hype may be so widespread that this does indeed happen despite it being able to completely upset the funding model. (That large capital requires impressing specific keyholders)
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.
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.
This is a good point. Investors really need to be smarter about deciding which people to invest with. I think they also need to be more creative. YC seems to be the only VC firm that is actively funding creative ideas, different strategies etc. instead of simply a "take this cash and give me stock" strategy (of course I'm being hyperbolic about the latter, but it seems that YC is definitely trying a lot more than conventional VC firms).
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.
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.
I think that’s a terrible oversimplification...
I think requiring a more thought out business plan (ie. one that includes steps to turn profit within some timeframe).
Some investors I’ve met do this and do it well, while still investing in ideas that may not seem all there upfront.
I think requiring a more thought out business plan (ie. one that includes steps to turn profit within some timeframe).
Some investors I’ve met do this and do it well, while still investing in ideas that may not seem all there upfront.
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.
“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.
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.
At the same time, there's people that pour their heart and soul into mom n pop companies with nowhere near the visibility or valuation of these kinds. So while it sucks, I don't feel especially bad for someone who got their shot at the stars and missed.
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...
ETA: well, here's a post-mortem (about halfway down): https://techcrunch.com/2017/05/25/anatomy-of-a-managed-marke...
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.
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.
I am sad for all the people who lost their jobs as a result of these failures, though.
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.
They learned a super valuable lesson about market for, and it will help them all in the future having this experience.
>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?
YikYak was very popular at my univeristy back in 2014. What replaced it? Or has anonymous social media fallen out of favor all together?
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.
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.
I enjoyed YikYak very much, reminded me of 'local' chat in Eve online. When it closed the alternatives seemed to be Jodel (German-centric), Spout (whilst your posts are localised, all users can see them instead of just local users, heavily moderated compared to YY) and Swiflie (allows nsfw content). However imo none provide the uncensored, very local experience that YikYak did.
Yik-Yak was briefly entertaining in a "wow so that's what kids are talking about these days" way, but with no focus it was kind of vapid.
Another geolocated thing that briefly existed was Google+ - at one point and only on mobile if you stopped the screen to the right there was a "Nearby" listing that showed public posts within some geographic radius that was never quite clear.
Another geolocated thing that briefly existed was Google+ - at one point and only on mobile if you stopped the screen to the right there was a "Nearby" listing that showed public posts within some geographic radius that was never quite clear.
I think that was actually Google Buzz circa 2009. It was an awesome feature. I remember using it on the Google maps app for WinCE (which was also a very good app at the time, people forget)...
> When the service was accessed with a supported mobile device, Buzz tagged posts with the user's current location.
-- https://en.wikipedia.org/wiki/Google_Buzz
> When the service was accessed with a supported mobile device, Buzz tagged posts with the user's current location.
-- https://en.wikipedia.org/wiki/Google_Buzz
Yikyak removed anonymity (it wasn't anonymous in the first place - devices, phone numbers, and invisible accounts were tracked/established/attached to posts), added public user profiles/names.
Do you think there is room for similar app?
I haven't heard about Yik Yak but I have had the idea to create a local chat for some time already. And now, just a couple of weeks after I'd finally started writing some initial prototype(just after hours coding so far) I found out that my idea had already been implemented and failed miserably.
Personally I'd use it to meet new people when I'm travelling alone or when none of my friends is interested to join me in an activity such as concert, tennis, football etc
Interestingly, I think if it had lived only a few months longer Yik-Yak might have found new life as chat for collaborative augmented reality or real world interactive games.
I'll use as the example Pokémon Go, which within the last month revised a major part of the game to introduce a feature that requires teams of people to defeat (gym raids). This has ended up with an assortment of tools being used in attempts to organize those teams, as well as some folks simply showing up and hoping others do the same. These include multiple fan/independent Discords, Facebook, and at least one browser map-based "I'm going to X" solution. Yik-Yak's geolocated chat (minus the anonymity that caused them so much trouble) seems like it would have been an excellent framework for for local team chats.
I'll use as the example Pokémon Go, which within the last month revised a major part of the game to introduce a feature that requires teams of people to defeat (gym raids). This has ended up with an assortment of tools being used in attempts to organize those teams, as well as some folks simply showing up and hoping others do the same. These include multiple fan/independent Discords, Facebook, and at least one browser map-based "I'm going to X" solution. Yik-Yak's geolocated chat (minus the anonymity that caused them so much trouble) seems like it would have been an excellent framework for for local team chats.
> Or has anonymous social media fallen out of favor all together?
Whisper still exists
http://whisper.sh
Whisper still exists
http://whisper.sh
There's another app called Blind that's sort of like Yik Yak for SV tech companies.
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?
Why isn't a niche product making people wealthy seen as good enough anymore?
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.
Jawbone has been around for almost 20 years. Doesn't fit in with the rest.
You have to wonder how they got through a billion of VC money and couldn't make their company a success?
I'm sure more food delivery and taxi startups will fail in the next few years. Such aggressive markets, hoping that they can undercut their competitors for longer and conker the market.
I'm sure more food delivery and taxi startups will fail in the next few years. Such aggressive markets, hoping that they can undercut their competitors for longer and conker the market.
Jawbone should have been Sonos. Their initial success was in audio products.
The 20 years might not but the never making money while still getting massively funded would fit with the rest. $590M over 11 rounds. Maybe the 20 years is an intensifier rather than an extenuation.
https://www.crunchbase.com/organization/jawbone#/entity
https://www.crunchbase.com/organization/jawbone#/entity
And that's only equity funding - including debt, they're up past $980M.
I remember from a class I took once at Berkeley that after the Roman Emperor Nero had been deposed, he was running away and a centurion who saw him quoted Virgil:
Is death so hard to bear?
Based on what I know of them, I think I'd have to describe their target product as "small electronic devices powered by rechargeable batteries and connected via Bluetooth." That's a really vague area to focus on unless you have some great and protected technology that fits best in that area, and even then you'd probably be best off licensing that out.
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.
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.
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.
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.
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.
I wonder if in hindsight they were competing for a (perceived) zero-sum niche that was given to Beats.
Otherwise we might as well include Apple and Google in a list of well-performing startups.
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Agreed. As a follow up, where do you draw the line? Is there even a single frequently used definition of a startup, or is it a gray scale for everyone?
I thought around here the definition is usually a company still expecting massive growth, hasn't gone public, and not being too old. Not sure what the guidelines are with age.
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.
Don't feel too sad about it, he launched Ando which is the same thing but faster and with better food quality.
Oh. Cool!
He is still doing https://andofood.com/ so I wouldn't worry too much...
I cancelled my sub after learning he was affiliated. Explains a lot of the operational shortfalls. He's a brilliant chef, sometimes, but figured he never needed to learn how to run a business and it shows across his portfolio.
What do you mean by "affiliated?"
David Chang owns equity in Maple and is their brand icon [1].
[1] http://www.bonappetit.com/restaurants-travel/article/maple-d...
[1] http://www.bonappetit.com/restaurants-travel/article/maple-d...
Mostly crap products. Glad they're gone.
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
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
>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.
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.
> 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.
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