253 Startup Failure Post-Mortems

From CB Insights, Apr 17:

It's hard to enjoin goodbye. A compilation of startup failure post-mortems yesteryear founders together with investors.

Of his many failed experiments, Thomas Edison in 1 lawsuit said:

“I conduct hold learned l one one thousand ways it cannot endure done together with thus I am l one one thousand times nearer the concluding successful experiment.”

In the spirit of failure, nosotros dug into the data on startup death and found that 70% of upstart tech companies neglect — normally around 20 months after starting fourth dimension raising financing (with around $1.3M inward total funding closed).

For consumer hardware startups, the stats are especially brutal, alongside 97% of seed or crowdfunded companies eventually dying or becoming “zombies.”

So why practise then many startups flame out? The existent reasons tin endure hard to uncover, exactly the obituaries written yesteryear founders, investors, together with journalists offering enough of clues.

Below is a time-staggered compilation of startup post-mortems for some of the most notable failures inward the CB Insights database.

After reading the 253 goodbye letters together with investigative takedowns below, cheque out our rundown for the top xx reasons that startups shutter.

• 2018 First Update (4/17/18)
• 2017 Third Update (10/31/17)
• 2017 Second Update (6/9/17)
• 2017 First Update (2/10/17)
• 2016 Third Update (11/8/16)
• 2016 Second Update (7/28/2016)
• 2016 First Update (2/15/2016)
• 2015 Second Update (12/3/2015)
• 2015 First Update (8/15/2015)
• 2014 Second Update (9/24/2014)
• 2014 First Update (6/3/2014)
• Original 50 Startup Failure Post-Mortems (1/20/2014)

2018 starting fourth dimension update (4/17/2018)
In the in conclusion few months, startups conduct hold shuttered for reasons ranging from the conventional (Doppler struggled to heighten upper-case alphabetic lineament to back upward the production of a complex hardware product), to the regulatory (Coinprism’s CEO cited concerns almost the regulatory futurity of the cryptocurrency space), to the unexpected (connected vino bottle startup Kuvée ran into problem next fires inward Napa Valley).

Influenza A virus subtype H5N1 issue of latterly shuttered startups cited vehement incumbent contest equally the argue for their closures. Philadelphia-based B2B nutrient delivery startup Zoomer floundered inward comparing to UberEats together with GrubHub, spell video platform Videma had difficulty luring consumers away from established platforms similar YouTube together with Facebook.

Read on for post-mortems of 11 startups that conduct hold shuttered since our in conclusion update inward Oct 2017.

Title: ‘Colored coins’ startup Coinprism is shutting down
Product: Coinprism web wallet
In an electronic mail to CoinDesk, Coinprism founder together with CEO Flavien Charlon wrote:

We didn’t meet a describe of piece of work organisation model that would conduct hold been feasible long term. Regulators are starting to pay attending to the [cryptocurrency] space, together with activities to a greater extent than or less blockchain assets (tokens exchanges, ICO tools together with services, etc.) are probable to overstep heavily regulated inward the adjacent five years. That agency some of these services volition conduct hold to unopen downwards or limit their activities, some mightiness overstep to prison, together with alone a modest issue of good capitalized companies volition successfully arrange to the regulator’s demands.

Title: I can’t hold back for y'all to meet what nosotros practise next
Product: Shyp
Shyp CEO Kevin Gibbon published a companionship post-mortem on LinkedIn afterward the companionship shuttered inward belatedly March.

Consumer increment slowed. People unopen to me together with the describe of piece of work organisation began to warn that chasing consumers was the incorrect strategy. After all, how oft practise consumers send things? I didn’t listen.
At the time, I approached everything I did equally an engineer. Rather than modify direction, I tasked the squad alongside expanding geographically and dreaming upward innovative features and increment tactics to farther penetrate the consumer market… But, increment at all costs is a unsafe trap that many startups autumn into, mine included.
… We decided to maintain the popular-but-unprofitable parts of our describe of piece of work organisation running, alongside modest teams of their ain behind them. This was a fault — my mistake. While large, established companies conduct hold the fiscal liberty to explore novel production categories for the sake of exploring, for startups it tin endure irresponsible.

Title: A $178 vino bottle that connects to Wi-Fi raised $6 1 one one thousand thousand from investors, together with instantly the startup is shutting down 
Product: Kuvée connected vino bottles

[It] became clear that, to properly develop the market, nosotros would demand a much louder phonation together with considerably to a greater extent than capital. The in conclusion year’s Napa fires affected our powerfulness to scale our client base of operations over the vacation flavor together with hence our powerfulness to heighten the funds required to maintain edifice awareness of Kuvée.

Title: An experienced startup founder learns some novel lessons 
Product: IntroNet
Mike Krupit, CEO of IntroNet, a service for professionals to make together with rail introductions, wrote a lengthy post almost the factors that contributed to the company’s failure:

On the surface, the describe of piece of work organisation didn’t succeed inward the starting fourth dimension 2 iterations of IntroNet for the same argue that 90% of tech startups fail: nosotros did non honour a product-market friction match earlier the goal of our cash. It’s a math equation that is pretty deterministic. Why didn’t nosotros honour product-market fit? Perhaps nosotros were solving for a hurting (e.g., LinkedIn sucks) instead of a existent occupation (e.g., I can’t honour expertise)? Did nosotros essay to modify user demeanour inward a way that wasn’t tractable? Yes, in all likelihood all of that....

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