Koinex – Piattaforma di scambio di criptovaluta

Koinex – Piattaforma di scambio di criptovaluta

Koinex

Cryptocurrency exchange platform

General Information
Category
Finances
Country
India
Started
In 2017
Business Failure
Business Outcome
Shut Down
Closed
By 2019
Cause of Failure
Legal Challenges
Founders & Employees
Number of Founders
Three
Name of Founders
Aditya Naik, Rahul Raj, Rakesh Yadav
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
2
Total Funding Amount
Number of Investors
3
Description

Koinex started in India in the summer of 2017 and quickly built a big cryptocurrency exchange, reaching a peak in December 2017. During that time, the platform recorded a staggering 246 Million dollars in trading volume and added as much as 45,000 new users during a timespan of only 24 hours! 

The idea was to bring the world of cryptocurrencies to India. The platform let users trade Bitcoin, Ethereum, Bitcoin Cash, Ripple and many other well-known cryptocurrencies on a peer to peer basis.

Users could enjoy the benefits of transparent pricing for each currency so that buyers could place bids and sellers could place ‘asks’. Koinex also offered a highly secure wallet where users could store their money.

Koinex also had raised a secretly kept amount of funding from foreign investors.

Cause of Failure

On April 6th, 2018, the Reserve Bank of India issued a statement where it said that all government-regulated exchange platforms had to stop trading with and exit relationships with any individual or organization that dealt with cryptocurrency transactions and block such transactions from taking place.

Koinex took the case to court and, to this very day, has a writ pending in the Supreme Court of India, but things move slow and there hasn’t been any progress in the case so far.

The statement meant that all banks in India were forbidden to deal with cryptocurrencies, so users of the platform now faced a daunting task: how would they even get their money if they couldn’t deposit and withdraw it from their own bank?

As the CEO of Koinex, Rahul Raj stated himself on a blog post on Medium; “The last 14 months have been tough to operate a digital assets trading business in India, on account of the closure of bank accounts holding user deposits.”

To force law-abiding users to have to deal with transactions that their own government is waging a war on is difficult. It meant that Koinex had to find other solutions so that their users could get their money’s worth.

And while there were other payment platforms that worked, Koinex suffered from a constant stream of obstacles like payment denials, closure of bank accounts and disruptions of operations. A very important point to make here is that this also happened for non-crypto transactions such as salary payments, rent, and purchase of equipment.

In other words, just because Koinex was associated with cryptocurrency exchanges, many of their employees got a call from their bank every month, where they were presented with a new problem related to payment and their bank accounts because they worked for Koinex.

Ultimately, there were too many obstacles and too little profit to be made from exchanging cryptocurrency in India. Nobody literally made anything anymore and the Indian Government clearly wanted cryptocurrency out of the way. What simply was left for Koinex to do, was to shut their doors. 

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Zirtual – Assistenti virtuali dedicati per professionisti impegnati

Zirtual – Assistenti virtuali dedicati per professionisti impegnati

Zirtual

Dedicated virtual assistants for busy professionals

General Information
Category
Software and Hardware
Country
United States
Started
In 2011
Business Failure
Business Outcome
Shut Down
Closed
By 2015
Cause of Failure
Mismanagement of Funds
Founders & Employees
Number of Founders
Three
Name of Founders
Collin Vine, Erik Jensen, Maren Kate Donovan
Number of Employees
Between 101 And 250
Funding
Number of Funding Rounds
4
Total Funding Amount
$5.5M
Number of Investors
10
Description

Zirtual was an online agency that provided services for companies. The firm essentially worked as a matchmaker between busy entrepreneurs with small companies with efficient and ready to work virtual assistants (VA). The company was quite successful and at its height employed over 400 people based in the U.S, from 39 States. The Zirtual Assistants (ZAs, as they were called) took care of assigned administrative tasks, from scheduling meetings, answering emails, making arrangements for travel but also did research and were recruited to build social engagement.

Cause of Failure

Zirtual was a successful
and highly on demand service. What brought the firm on the verge of bankruptcy
was its management and the high burn rate it had.

Scaling too soon, with 500 employees
on the payroll when the company has not yet celebrated its 5th anniversary,
usually gives way to an unsustainable business. Zirtual’s co-founder and CEO
had failed to calculate the stats and figures of its business, although she
states that it was the accounting firm they had contracted that gave them the
wrong numbers. When a supposedly agreed upon round of funds didn’t come
through, Zirtual shut down overnight. Within days of Zirtual closing, came news
that the CEO of the company Startups – a platform helping new entrepreneurs and small
businesses take off –  offered to
purchase Zirtual. The deal took place and Zirtual, with all of its assets, and
a percentage of its employees became the property of Startups.co.

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LayerVault – Consentito agli utenti di archiviare e collaborare alla progettazione

LayerVault – Consentito agli utenti di archiviare e collaborare alla progettazione

LayerVault

Allowed users to store and collaborate on design work

General Information
Category
Design
Country
United States
Started
In 2011
Business Failure
Business Outcome
Shut Down
Closed
By 2014
Cause of Failure
Lack of Funds
Founders & Employees
Number of Founders
Two
Name of Founders
Allan Grinshtein, Kelly Sutton
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
1
Total Funding Amount
$535K
Number of Investors
3
Description

LayerVault’s idea was to build a high-growth business in the design industry. The app helped you store, track, review, and deliver design work. The platform also gave its subscribers unlimited file storage and real-time updates and it had a companion iOS app. It built some good technology that explored new ideas and addressed a common need (pain) in the design community.

Cause of Failure

According to Kelly Sutton, LayerVault’s CEO,
the company was facing financial challenges. As a result, they exhausted their
existing capital reserves and were unable to secure additional capital to
sustain their services. The success of any business lies in its bottom line.
LayerVault had many happy customers who routinely used the service and the way
it integrated with other platforms, but it failed to build enough traction and
become the go-to destination for version control.

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Sidecar – Rete di trasporto di consegna B2B fornita

Sidecar – Rete di trasporto di consegna B2B fornita

Sidecar

Provided B2B delivery transportation network

General Information
Category
Transportation
Country
United States
Started
In 2011
Business Failure
Business Outcome
Acquired
Closed
By 2015
Cause of Failure
Competition
Founders & Employees
Number of Founders
Two
Name of Founders
Jahan Khanna, Sunil Paul
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
5
Total Funding Amount
$45.5M
Number of Investors
21
Description

Sidecar was a transportation company based in united states (US). It was founded a couple of years after Uber but was never able to catch up with it despite the fact that it had a good product built on solid technology. One of the features Sidecar introduced was that of enabling riders to set their own price. In general, the app of the company offered much more control over their riding experience both for drivers and riders.

Cause of Failure

Sidecar had the
top-notch technology but no marketing strategy. Car-hailing services depend on
the traction present in the market and the network of drivers and passengers
that they build. Sidecar could only become useful – and profitable – if there
was always a high density of drivers and users. This is mainly where Sidecar
failed. Unlike their giant competitors (Uber and Lyft) they didn’t invest
enough to market their product and gain customers. Uber reportedly lost almost
a million in its first 6 months while it heavily focused on acquiring
customers. Sidecar didn’t have the backup funding to do that on a similar
scale.

Also,
instead of focusing on its powerful technology and the empowerment their app
gave to its users, they tried to place themselves as an affordable alternative
to Uber, which didn’t really work for them. Weeks after shutting down on
December 2015, though, they were acquired by GM.

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Sposta bottino – Mercato online di mobili

Sposta bottino – Mercato online di mobili

Move Loot

Furniture online marketplace

General Information
Category
e-Commerce
Country
United States
Started
In 2013
Business Failure
Business Outcome
Shut Down
Closed
By 2016
Cause of Failure
Bad Business Model
Founders & Employees
Number of Founders
Four
Name of Founders
Bill Bobbitt, Jenny Karin Morrill, Ryan Smith, Shruti Shah
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
3
Total Funding Amount
$21.8M
Number of Investors
18
Description

Move Loot was a San Francisco based online resale marketplace for furniture. The company’s online market stage was designed with the goal of productively offering, purchasing, stockpiling and delivering second-hand furniture to its customers. Its focus was to meet the requirement for furniture transfer and urge individuals to reuse furniture while expanding the day and age in which furniture was utilized. Its target was on persons who needed to move houses and sell their furniture or those who desired to revamp their household furniture.

Cause of Failure

Move Loot officially closed
down in July 2016. One of the key issues pointed out was its poor plan of
action. They selected to work a substantial furniture stockroom without
precisely thinking about the expenses of running it and the assessed benefits.
Thus, costs continued soaring while benefits stayed low. The startup also tried
to expand and grow to New York and Los Angeles in the expectation of accepting
some guaranteed financing. This lopsided cost – income condition prompted mass
lay off of its employees.

Move Loot tried to move
quickly it and attempted to aggressively scale up to its vision may be a little
too fast. Move Loot would bounce starting with one model idea and then dive
onto the next one before basically evaluating if the past model even worked.
After some rumors of an incoming partnership and acquisitions that never
materialized, poor customers review and massive internal layoffs, Move Loot had
to officially bring its operations to a stop.

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Papavero – Soluzione di assistenza all'infanzia per famiglie moderne

Papavero – Soluzione di assistenza all'infanzia per famiglie moderne

Poppy

Childcare solution for modern families

General Information
Category
Health
Country
United States
Started
In 2015
Business Failure
Business Outcome
Shut Down
Closed
By 2018
Cause of Failure
Bad Business Model
Founders & Employees
Number of Founders
Two
Name of Founders
Avni Patel Thompson, Richerd Chan
Number of Employees
Between 1 And 10
Funding
Number of Funding Rounds
1
Total Funding Amount
+$2M
Number of Investors
1
Description

Poppy was a modern childcare solution for families that had difficulties hiring babysitters. Think of it as an ‘Uber for Babysitters’ where you could hire the services of a caregiver on demand. According to them, the babysitters were thoroughly vetted using a 7-step process that included in-person interviews, references, background check, experience, CPR (Cardiopulmonary Resuscitation) verification and so on. A customer could avail the services of a babysitter using the Poppy app. While it did get funding of more than $2 million, it had to shut down after three years in the business.

Cause of Failure

One of the main reasons for its failure was a simple case of ‘unit economics’. An on-demand service like this should have hired their caregivers as contractors and not as full-time employees. Salary and benefits associated with each of the employees must have directly affected their bottom-line. A commission model of payment would have worked in the startup’s favour. 

While Poppy did solve a problem, delivering this end-to-end service wasn’t sustainable for them. The customers (read parents) wanted to use cheaper options while the caregivers wanted more compensation for their service. Add to that the overheads, Poppy had its hands filled with problems. 

“We are building the modern-day village,” was a phrase they used to describe the solution they provided to their customers. As a marketer, I think it was a very confusing line of thought. Nobody would associate the word ‘village’ with babysitters, right? I feel it took the zing out of their offering. Perhaps they could have used something simpler in their marketing communication. 

A service like this isn’t scalable unless there is a lot of cash to burn initially. They wanted to expand into connected services like ‘taking the child to the dentist appointments’ and so on. This would not have been too lucrative for them either. 

Also, they didn’t follow a retainer model where each client could ‘pay X amount of dollars for Y hours,’ every month. Retainer models usually work in packages of 3,6 or 12 months where clients pay you in advance for the said amount of hours. This would have at least enabled them to predict their revenue and would have been a better model since the caregivers are in-house employees and not under contract making it easy to use their time much more efficiently. 

Apart from the hourly payment plans, they also had a membership model which was priced at $8 per month and allowed for unlimited requests. I feel this was priced way too cheaply. Even if there were 100 paying customers, it would barely cover their overheads at that rate. 

In short, there were a few areas which we have mentioned here which could have tightened the screws of the sinking ship. While there was a high demand for Poppy’s offerings, unit economics failed them. In a parallel world, with better logistics in regards to unit economics, Poppy might be a thriving business.

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