It’s hardly controversial to say that many new businesses fail. In 2015, Forbes estimated that as many as 90% of startups don’t survive. It’s an unfortunate reality, but a reality nonetheless. Some companies hang on for several years before shutting down, and in the fast-paced world of Silicon Valley, it’s not uncommon for today’s venture capital darling to become tomorrow’s cautionary tale.
With that in mind – and with the new year upon us – here’s a look at seven startups that didn’t make it past 2017.
Capital Raised: $150 million
Peak Valuation: $560 million
As is the case for many failed startups, the idea behind Beepi is a solid one: an online marketplace for used cars, through users’ smartphones or computers, cutting out the costly commissions of a dealership. Poor management is reportedly to blame for Beepi’s failure – the company was said to be burning through $7 million a month during its peak, when it had some 300 employees. When the money ran out, Beepi went under, in February of 2017.
Capital Raised: $134 million
Peak Valuation: $600 million
Billed as a search engine for mobile apps that helped users find content within various applications, Quixey eventually expanded to become a “digital assistant for apps” – right as Apple and Google were developing their own digital assistants. Despite existing for several years, Quixey never managed to secure a steady source of revenue, and closed up shop in February of last year.
Capital Raised: $75 million
Peak Valuation: $400 million
Yik Yak is founded on a somewhat problematic idea – a totally anonymous social network. Unsurprisingly, this led to issues with harassment, particularly on American college campuses. These problems, from bad press to campus bans of the app, made it difficult for the network to retain a steady user base. As harassment and abuse concerns grew into major issues for more established and popular social networks like Facebook and Twitter in the latter part of 2017, Yik Yak was already finished, shutting down in April of last year.
Capital Raised: $59 million
Peak Valuation: $169 million
This food-delivery startup was built around its own line of healthy, high-quality meals made with locally-sourced produce. Unlike other similar businesses, Sprig had full-time employees rather than using contractors, and eventually added tipping to its service. The meal-delivery sector has proven to be challenging for many startups, and Sprig’s higher overhead costs contributed to its closure in May of 2017.
Capital Raised: $46 million
Peak Valuation: $276 million
Hello launched its first product, the Sense sleep tracker, via a successful Kickstarter campaign, raising $2.4 million and landing the device in Target and Best Buy stories in the US. The innovation was that, unlike other sleep trackers, Sense wasn’t worn on your wrist, but sat in your bedroom with a small tracker inside your pillow. Despite the launch, Hello was unable to find a buyer for the company, and went to sleep permanently in June of 2017.
Capital Raised: $1 billion
Peak Valuation: $3 billion
A pioneer in the wearable tech space, Jawbone began its life in the late 1990s, manufacturing portable speakers and fitness trackers. The company spent years trying to stay relevant in the market it had helped to create, but it had trouble paying its vendors and eventually began liquidating its assets in July of 2017. All is not lost, however – founder and CEO Hosain Rahman has created a new venture, Jawbone Health Hub, targeting the healthcare hardware and software industry.
Capital Raised: $121 million
Peak Valuation: $459 million
This high-end juicer manufacturer launched with plenty of hype a few years back, but a Bloomberg article revealed that the $400 machine was not actually required to use its proprietary juice packs – they could be squeezed by hand. The concept of a Keurig-style quick juicer isn’t a bad one, but the high price (for both the machine and the refill juice packs) and the controversy proved too much for Juicero, which shuttered in September 2017.
Despite these companies exiting the market last year, many of the people involved will launch, or already have launched, new businesses. There’s even an entire series of business conferences, Quebec’s FailCamp, devoted to learning from the lessons of failure.
Many thriving entrepreneurs and businesspeople only found success after experiencing failure, in some cases, multiple times. Don’t let these examples discourage you; rather, they should serve as inspiration to always keep going.
Justin Anderson | Staff Writer