Design Inc. – Mercato per lavori di progettazione di alta qualità

Design Inc. – Mercato per lavori di progettazione di alta qualità

Design Inc.

Marketplace for high-quality design work

General Information
Category
Design
Country
United States
Started
In 2016
Business Failure
Business Outcome
Shut Down
Closed
By 2017
Cause of Failure
Bad Business Model
Founders & Employees
Number of Founders
Two
Name of Founders
Bjoern Zinssmeister, Marc Hemeon
Number of Employees
Between 1 And 10
Funding
Number of Funding Rounds
1
Total Funding Amount
$2.3M
Number of Investors
No Data
Description

Design Inc. was a startup that linked clients to talented designers. Clients would post on the site the projects they needed to get done. Design Inc. allowed designers to autonomously send proposals for the projects they would like to work on while charging a small fee for it. The platform helped designers all over the world to find their dream projects and companies were happy to be able to choose from a talented pool of designers.

Cause of Failure

Design Inc. reached market
saturation after some time. The number of projects and companies were not
increasing and the startup could not make enough revenue to cover operation
costs. This put the company in a low cash situation and they founder took the
decision to close it down.

Design Inc. CEO identified
a number of reasons that he believed contributed to the failure of his company.
He stated that he should have been more focused on the essentials of business,
which is getting more leads and profit. He also mentioned that a startup
founder should also test his assumptions and keep on optimizing the product in
every little way. Team members should also be encouraged to experiment without
fear.

Another broader issue that
is not exclusively linked to Design Inc. may be with the business model itself
since the design field is considered a top-end market where job posts are
scarce by nature. Too many designers compete for only a limited number of
design jobs, thus causing the market to saturate too soon. Another reason why
the company might have not witnessed a growth in its network could have been
due to the fact that although designers are introduced to the clients by Design
Inc. platform, in the end, they might decide to continue their business
transactions independently from the marketplace.

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Tutorspree – Servizi di insegnamento basati sul Web

Tutorspree – Servizi di insegnamento basati sul Web

Tutorspree

Web-based tuition services

General Information
Category
Education
Country
United States
Started
In 2010
Business Failure
Business Outcome
Acquired
Closed
By 2013
Cause of Failure
Bad Marketing
Founders & Employees
Number of Founders
Three
Name of Founders
Aaron Harris, Josh Abrams, Ryan Bednar
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
2
Total Funding Amount
$1.8M
Number of Investors
10
Description

Tutorspree wanted to enhance the way tutoring is done by making it easier for students to find quality tutors in their area. Tutorspree graduated from Y Combinator in 2011 and was known as the “Airbnb for tutors”. People could register as a student in their educational marketplace, set their preferences and filter so that Tutorspree algorithm could pair them up with the best available tutor for them among the 7000 tutors on the platform.

Cause of Failure

Tutorspree
was a startup in a very seasoned and competitive sector. There is no clear-cut
reason for the venture failure but analyzing some of the available information
might help us shed light on possible culprits. First, it probably had to do
with the founders of the company and their lack of expertise in the field.
Also, Tutorspree’s vision of pairing up tutors and students to meet up in
person so as to create and maintain a real connection is commendable but not
practical. Although indeed, in-person lessons are still very much valuable, the
market -and the world- is heading on to a different direction.

It is also possible that the platform,
which was initially taking 50% of the tutor’s fees, might have witnessed a
decline in overall user growth because nothing could prevent tutors and
students to schedule lessons without recurring to Tutorspree.com after they got
to know each other.

Another problem for Tutorspree’s seemed
to be that the company was primarily dependent on search traffic from Google to
acquire new students and tutors, and any algorithm changes could significantly reduce
their traffic and in return their users.

As resources started
to dwindle and funding failed to come in, Tutorspree decided to shut down. Its
assets (including its user’s database) were bought by Wyzant,
a tutoring marketplace launched in 2005 which is still active.

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99dresses – Armadio virtuale per scambiare articoli di moda

99dresses – Armadio virtuale per scambiare articoli di moda

99dresses

Virtual closet to trade fashion items

General Information
Category
e-Commerce
Country
Australia
Started
In 2010
Business Failure
Business Outcome
Shut Down
Closed
By 2014
Cause of Failure
Multiple Reasons
Founders & Employees
Number of Founders
One
Name of Founders
Nikki Durkin
Number of Employees
Between 1 And 10
Funding
Number of Funding Rounds
2
Total Funding Amount
$105.7K
Number of Investors
4
Description

99dresses was a fashion application marketed as a virtual model closet which offered basic inter-trade of second-hand designer dresses between users. The brain-child of this application noticed the high turnover in ladies’ closets, whereby they purchase a designer fashion dress, wear it a couple of times, get bored and end up leaving the dress hanging in the closet unused for the months and years to come. The founder of the startup figured that it could be profitable and extremely fascinating to connect two or more ladies with the similar issues, tastes, and needs and have them trade clothes; and so, 99 dresses was born.

Cause of Failure

99dresses was established by the 18-year-old Nikki who had no clue about the tech business. It successfully operated for one year after which it started encountering great money and technical related difficulties which prompted the shutting down of the app in 2014.

The key issue was that the organization did not raise enough income to maintain its tasks as the organization’s plan of action depended on the exchange cost. Steadily, their exchanges diminished in cost and 99dresses’ income endured a shot. Their plan to scale up to include handbags and different adornments, failed to gain traction and the number of exchanges in the platform dropped.

Difficulties in implementing innovation and absence of management experience likewise added to conveying deals to a stop and caused a drying up in funding sources. The startup also experienced Visa issues that obstructed smooth activities between the United States and Australia. With these series of events, the company’s group of prime supporters gradually gave up on the platform and the startup had to close down.

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Munchery – Pasti gourmet a portata di mano

Munchery – Pasti gourmet a portata di mano

Munchery

Gourmet meals at your doorstep

General Information
Category
Food and Beverage
Country
United States
Started
In 2011
Business Failure
Business Outcome
Bankruptcy
Closed
By 2019
Cause of Failure
Multiple Reasons
Founders & Employees
Number of Founders
Three
Name of Founders
Conrad Chu, Tri Tran, Van Tran
Number of Employees
Between 101 And 250
Funding
Number of Funding Rounds
8
Total Funding Amount
$125.4M
Number of Investors
20
Description

Back in 2010, Munchery co-founders Tri Tran and Conrad Chu came up with a seemingly brilliant idea in Munchery. Hiring a team of gourmet chefs that would cook up a variety of uniquely crafted, continually changing menus, Munchery allowed users to order this food and have it delivered straight to their doorstep. Customers would then be able to rate the food and the chefs according to their satisfaction. This idea of gourmet meals on-demand allowed the company to raise its most recent $125 million in total funding and was speculated to be valued at $300 million at its peak.

Cause of Failure

Munchery had a very interesting growth story. For the first few years, as a San Francisco-based platform for on-demand, microwavable gourmet meals, the business did quite well. Riding on the momentum of early success, in 2015, Munchery, in a bid to outdo its rival Blue Apron, branched into offering ingredients for customers to make their own meals (and providing them the appropriate recipes to do so). The San Fransisco-based startup continued to generate a lot of media buzz and expanded into New York, Seattle, and Los Angeles soon after. They were outperforming Blue Apron and almost every other on-demand food delivery startup, attributed to the convenience their microwavable foods model brought and Munchery’s pride on the quality control they offered that other on-demand startups, who depended upon restaurants, couldn’t. They also prided themselves in sourcing 100% natural ingredients and working efficiently under their schedule-ahead model that constantly optimized the efficiency of their couriers.

So what went wrong with this seemingly successful business?

Pascal Rigo, a celebrated chef who at one point served as Munchery’s Chief Customer Experience Officer, stated in his interview with the San Francisco Chronicle that “[startups] can be either a good food company or a good delivery company, but I don’t think anyone has been able to do both.” He left the company in 2015, after just 5 months of joining. Munchery’s attempt to juggle both of these titles led to difficulties at scale.

Munchery also realized late that its original heat-and-serve meals had geographical constraints, as to ensure quality, food had to be delivered within a short drive of its kitchens. To accommodate for this, Munchery accelerated its expansion, setting up expensive production kitchens in Los Angeles, New York, and Seattle. These proved to be too expensive both financially and logistically, and the new kitchens were shut down by May of 2018. Additionally, new competition from Uber’s Eats spinoff and DoorDash started to kick in and Munchery soon could not match the variety offered by these companies that could source from multiple restaurants.

Another area where Munchery failed was in acquiring new customers. They attempted to use aggressive discounts to achieve success in this sector, offering things like $20 off a user’s first two orders and subscription plans that offered a free 1-month subscription to first-time customers. However, despite these efforts, Munchery failed to retain customers in any significant way. These disappointments led to Tri Tran stepping down from the position of CEO, replaced by James Beriker, who employed a slew of layoffs and other belt-tightening measures. Beriker also raised prices, which would only lead to a further downward spiral for the company amidst increasing competition.

Despite its ambitious mission, Munchery could not deliver on the gourmet experience that it promised and closed its doors to users, alongside similar decisions by startups Spring and Maple—early concepts of the “ghost kitchen” that shut down and was acquired earlier in 2017, respectively.

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Parse – Kit di sviluppo software basati su cloud

Parse – Kit di sviluppo software basati su cloud

Parse

Cloud-based software developer kits

General Information
Category
Software and Hardware
Country
United States
Started
In 2011
Business Failure
Business Outcome
Shut Down
Closed
By 2016
Cause of Failure
Acquisition Flu
Founders & Employees
Number of Founders
Four
Name of Founders
Ilya Sukhar, James Yu, Kevin Lacker, Tikhon Bernstam
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
2
Total Funding Amount
$7M
Number of Investors
17
Description

Parse was a mBaaS (Mobile Backend as a service) platform. The firm offered a cloud-based platform for mobile apps developers with tools to let them build, run and test applications while taking care of the back-end support. Its main services were Parse Core to save data, Parse Cloud to run custom app codes, Parse Push for notification purposes, and Parse Analytics which had stats and optimization insights.

Cause of Failure

Parse was a growingly
popular service in the developer’s community and when Facebook offered to
purchase the startup in 2013 for $85 million, Parse’s founders found that it
made sense for their business to join the Zuckerberg’s team.

Facebook
bought Parse at a time in which its stock was trading for lower than their IPO
and it was not yet confident of how far its business model based on ad-serving
would take them and wanted to test other possible business ideas. Thanks to
Parse, Facebook was able to create a community of mobile app developers for
itself. There
could have also been a brief vision of developing cloud services that would
match those offered by Amazon, Microsoft, and Google. However, once the
Facebook business model was consolidated in the last few years making them
billions, the social network lost interest in competing with the other giants
in the cloud business as it would cost them millions of dollars. They were too
far behind and Parse couldn’t provide them with a long-term profitable source
of revenue, in fact, it was most likely losing money. Facebook decided to shut
down Parse in 2017 to let the team focus on other projects.

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stereomood – Piattaforma musicale che ha fornito elenchi di brani basati sull'umore

stereomood – Piattaforma musicale che ha fornito elenchi di brani basati sull'umore

Stereomood

Music platform that provided mood-based song listings

General Information
Category
Music
Country
Italy
Started
In 2009
Business Failure
Business Outcome
Acquired
Closed
By 2015
Cause of Failure
Acquisition Flu
Founders & Employees
Number of Founders
Four
Name of Founders
Daniele Novaga, Eleonora Viviani, Giovanni Ferron, Maurizio Pratici
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
1
Total Funding Amount
No Data
Number of Investors
1
Description

Stereomood was an online platform for streaming music which instead of being based on genre or musical interest, it categorized and streamed songs according to the users’ mood. Users could hear and create their own playlist as well as share music with other members depending on how they felt at any particular time.

Cause of Failure

Stereomood seems to cease operation towards the end of 2014 and their last tweet and Medium post was in February 2015. In the post the team announced that after 6 years of operation they were no longer involved with the the platform nor its management. It seems that the company has been acquired by some party that decided to not continue its business. Effectively, the only strategy that could have realistically turned out to be profitable for Stereomood was acquisition as they weren’t able to make profit in any other way since companies such as Spotify already ruled the market.

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