Success of a start-up is never certain. As a matter of fact, 90% of the startups fail before they could shine under the sun. However, the optimism in the UpStarts has still managed to create companies and products all the times in the history.
People always come up with some great and unique ideas for their start-ups. But unfortunately, there are some start-ups which face a massive failure despite a great idea behind it. Even the most useful and seemingly revolutionary of the ideas eventually turn out to be a failure due to many reasons.
While there is a myriad of factors as to why startups and mobile apps fail, there are a lot of factors which just cannot be attributed as the element of failure. Here in this article, we will look at some of the biggest start-up/mobile app failures, the idea behind them and what could be learned from their failure stories.
Let us see what the basic idea behind Hailo was. Hailo is a mobile application used for calling cabs using your smartphone. It is similar to Uber but instead of having black cars with drivers, it connects you to the network of yellow cabs. It came into existence in 2011 in London, and was doing really great until 2013 with over $100 million invested in it. But by the end of 2014, it crashed down. Despite having such a great and useful idea, it broke down due to following reasons:
There was intense competition in the market. With Uber coming up with new market strategies, it made things difficult for Hailo. When in New York the decision was made to legalise the e-taxi service, Ubers and other similar services tried to grab the opportunity. With such tough competition, Hailo could not cope up.
Another reason for failure was their flawed business model. As Hailo was a London based start-up where there are luxury cabs and confusing streets. People are dependent on them for their up and down. But as far as New York is concerned, the taxi drivers are less trained, and many of them do not carry a smartphone. The owners did not do much market research and suffered a failure.
Seeing the story of Hailo, it can be concluded that you need to keep in mind that somebody out there might be having the same idea as yours. Two things that the Hailo ignored was marketing and targeting the correct audience. They failed in their marketing strategy and secondly, targeted the inappropriate audience. They offered a solution for a problem the people are not even facing. To sum up, they failed to adapt.
Released on May 27 way back in 2009, Google wave was supposed to be a game changer but unfortunately it failed to do so. The main idea was to let you communicate and collaborate in real time. This means that using Google Wave you multiple users can edit a same document at the same time, or maybe for a group discussion. This seemed on papers but practically it was a failure.
The Google Wave failed due to multiple reasons:
People could not really understand what it was. Google failed at explaining the purpose it served and how it is useful to them. No one actually knew what it was.
It could not meet the expectations of the people. Even if people didn’t know much about it, then also they gave it a try but the soaring expectations could not be met. They considered it to be kind of new-Gmail which it was not.
Even if some used it, the product was really complex to use. There was too much of confusion and hustle while using it at the user end.
From this failure, it is a message for those dreaming of their start-up to make sure to explain your product and idea well. What your product it, what problem does it solve or in simple terms paint a picture of what you are offering to the people. And one more thing; keep things simple. Initiate with a few useful features which serve your purpose well. And then gradually add on new features.
Founded way back in 1998, Govworks.com was help to connect the government with their clients. The idea was to facilitate the users with the payment and use of government’s producers and regulations. Using this, clients can keep track of their contracts, apply for jobs, pay tickets or look up for city information. The company was doing fine and grew from 8 to 250 employees in 2 years.
But it too encountered failure. There were some issues amongst the founders, who were actually childhood friends. Also they offended some of the government officials and released the information about not yet official statements. Their company software had few bugs which they were not able to fix. Due to all this the company was sold in January 2001.
This start-up failure is a good example of “Never letting your ego come in-between your business”. You need to treat your customers and partners well for your business to grow. And if you believe that they need to use your service anyhow then you are surely in some misconception. Also, a good start-up idea won’t be successful unless it is backed up with a good business model and practice.
India has a huge population of 1.2 billion people. It is definitely a great market for a laundry business. This was the idea behind the start of Doormint. They served on demand laundry services to 1.2 people of Mumbai, Bangalore and Gurgaon. The start-up was doing fine in the initial stage but soon things became unmanageable.
There were many reasons for the failure. So of them are:
Many of the middle class people have a housemaid who along with washing clothes performs other household chores in a much lesser time as compared to Doormint.
Also there were issues like low ticket size, pickup delivery cost and quality management. They were unable to perform a good budget management.
Damage or defect in the garment which was not seen during pickup resulted in mismatch of expectations during delivery.
The founders did not consider all the factors before releasing their product in the market. Or rather they ignored the factors like household maid or the local dhobi. They made several assumptions about the problem which went wrong during execution. So it’s an advice to do a complete research beforehand.
Everpix came up with an idea to sort and organize your photos in online storage. You need not trawl through hundreds of photos to look up for a particular shot. They used a certain algorithm to sort and organize your pics. Started in 2009, it managed around 55,000 users by 2012 but broke down by 2013.
It failed due to 2 major problems:
1. Although the app was easy to use, had a clean design with lots of functionalities, but great products don’t come at cheap rates. By the time it entered in the market, the company was out of money as well as time to raise the capital. Due to this, they could not manage a sustainable number of users.
2. Due to this shortage of capital, they needed to sell their app to the users to raise funds but they decided not to.
From their failure, others need to understand that you need to market your product. Although the purpose is to deliver product to the users, but you also need to money to run your business. In such a competitive world, you need to serious marketing backing your product.
So, these were one of the biggest mobile app and startup failures that I find quite interesting. Do you have any other interesting stories that need to be shared? Hit me up and I'll add it here.