7 Promising Startups That Went Bust

7 Promising Startups That Went Bust 7. Friendster In the days when Facebook was just a gleam
in Mark Zuckerberg’s eyes and one full year before Myspace was launched, Friendster kicked
off the era of social networks in 2002. Founded by computer programmer Jonathan Abrams, Friendster
had funding of nearly $50 million from investors including KPCB and LinkedIn, 115 million users
at its peak and a sizable offer of acquisition from Google. In 2003, Friendster turned down Google’s
offer of $30 million and chose to stay independent instead of selling. That decision is now regarded
as one of Silicon Valley’s biggest blunders, and it was all downhill from there for the
social networking site. Technological challenges slowed the site down, and it became so bad
that users had trouble logging in. Friendster failed to build their infrastructure to match
the traffic and competitors Myspace and Facebook quickly caught up. Friendster would never
return to its former heights and was eventually acquired by MOL Global, one of Asia’s biggest
Internet companies, who discontinued the social network and turned it into a gaming destination. 6. Alta Vista
Alta Vista was “the” search engine of the ‘90s. Today, Google indexes pages in
the billions, but in December 1995, Alta Vista hit the 20 million mark, far surpassing contemporaries
Lycos, Excite & InfoSeek. It simply seemed to find information the other’s couldn’t.
Alta Vista surged in popularity and soon attracted 80 million hits per day, but within a short
time had been part of some confusing acquisitions that, in part, ultimately led to its demise.
Compaq acquired AV’s parent company Digital Equipment Corporation in 1998, which then
merged with Hewlett-Packard in May 2002. The search engine was purchased in 2003 by Overture
Services, then the leading seller of online search advertising. Overture, in turn, was
bought by Yahoo in 2003. Yahoo officially pulled the plug on Alta Vista in July 2013,
though it had been dead for nearly a decade. It’s also generally believed that AltaVista’s
inability to capitalize on opportunities — like buying Google’s search technology when they
had the chance — is what ultimately sunk it. 5. Napster For a short time in the early 2000s, Napster
allowed users to share music with each other online for free. Founded by Shawn Fanning
and Sean Parker in 1999, the peer-to-peer file sharing site turned the music industry
on its ear with more than 80 million users swapping and downloading music, but in the
end, it was sued out of business. In April 2000, Metallica brought a lawsuit against
the company for copyright infringement after finding their leaked song, “I Disappear,”
being distributed online before it was officially released. Other lawsuits soon followed and
by 2002, the once popular site filed for bankruptcy. Roxio bought the Napster brand and logo and
turned it into a music subscription site. They later sold it to Best Buy who, in turn,
sold it to Rhapsody in 2011. 4. The Torquing Group The Zano mini-drone project, which was Europe’s
most successful Kickstarter idea to date with over £2 million in funding, was shut down
in 2015 by the Torquing Group, the company responsible for creating the drones. Now,
it appears, thousands of people who invested in the project will not receive the device
they had paid to support. Suspicions started to pique in 2014 when Torquing sent out emails
saying there were 7,000 mini drones ready to be dispatched, but none ever came. After
missing another crucial distribution date in June 2015, CEO Ivan Reedman resigned due
to “personal health issues and irreconcilable differences” and the writing was on the
wall. A few months later, Torquing released a statement to backers of the project, saying
it had decided to pursue a “creditors’ voluntary liquidation.” Kickstarter also released
a statement absolving itself from any responsibility saying there are “no guarantees” a project
will work out, and a company’s “contract with backers requires them to bring the project
to the best possible conclusion.” 3. Boo.com
The failure of Boo.com had more to do with timing than most anything else. The site launched
in 1999 and sold branded fashion apparel over the Internet. This is something we take for
granted now, but back in the early 2000’s most people did not buy goods online. Despite
this, Boo grew quickly. Some would say too quickly — the company initially had 40 employees,
but within a few short months had a total of eight offices and 400 employees in cities
including Amsterdam, Munich, New York City, Paris, and Stockholm. Boo spent $135 million
of venture capital in just 18 months and hoped to slide for a few years on investors backs
until sales caught up with operating expenses. They never got the chance to see that business
model through — the dot.com bubble burst in 2000 as did Boo’s dreams. Boo’s main
assets, its software, and technology, were sold to Bright Station for $250,000 — they
had purchased this technology for a whopping $70 million. Ouch! 2. Secret
In April 2015, the founders of Secret did what they believed to be the right thing and
returned money to their investors and shut down. Secret was an app that allowed its users
to share their thoughts anonymously. The app’s founders raised more than $35 million in 16
months, and its introduction into the marketplace was covered by every major tech publication,
as well as some mainstream news outlets. So, what went wrong? The company couldn’t retain
users over time, nor could it solve the challenge of global copycats. In the end, founder David
Byttow revealed he was also concerned about the security of the product and feared that
a hack would lead all those secrets to come out. That resulted in refinements of the product,
which made it a more complicated and less elegant app. Secret simply failed to represent
the vision Byttow had when he started the company. 1. KaloBios KaloBios Pharmaceuticals, Inc. went belly
up in late December 2015 and listed its assets at anywhere between $1 million and $10 million
in bankruptcy court. The death knell sounded for the startup drug maker when the “most
hated man in America,” CEO Martin Shkreli, was arrested by the FBI for alleged investment
fraud. Shkreli gained overnight notoriety after his other company, Turing Pharmaceuticals,
raised the price of the HIV drug Daraprim from $13.50 a dose to $750 — an increase
of 5,500 percent. KaloBios stock jumped from $1 to more than
$39 after Shkreli took over at the company in November 2015. He installed some of his
executive pals from Turing into top management positions at KaloBios. The company cited his
arrest, Nasdaq’s delisting notice, and the departures of its accounting firm, chief financial
officer and two board members as challenges that have disrupted its ability to restructure. Thank you for watching Interesting Top 7’s!
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40 thoughts on “7 Promising Startups That Went Bust

  1. Thankfully, Napster gave way to Limewire, Kazaa, and all the other file sharing programs in the early 2000s that let so many people download tons of free music back in the day, lol.

  2. For those interested in startup funding and positioning your idea at the top check out #NewCHIP


  3. The wheelie is expensive, HEAVY, and the sellers money hungry retards. Yeah retards they speak like 200 is nothing but theyre broke as fk. Good that thing flunk.

  4. What about the pile of garbage Clinkle who raised the largest Seed round in silicon valley history at $23M and never even shipped the product lol.

  5. classifying Napster, the company which changed the entertainment industry like no other, as a failure, is totally wrong and misleading. nothing has been the same since Napster

  6. KaloBios not a failure at all. He is still successful CEO and Di not lose any court yet. So misleading the video, including Napster which was a great business leading to another.

  7. Ffs Shkreli's drug, daraprim does not treat HIV, it treats toxoplasmosis. And Shkreli was just a victim of the msm and big corporations. Notice how other company's raise their prices to even higher percentages but no one gives a shit? Then Shkreli raises his price to at a lower percentage BUT only charges the insurance companies the full price and reinvests heavily into r&d to treat other illness, but he's the one the msm decide to attack and not even mention any of the good he's done.

  8. I got an email from the attorney for Metallica while using Napster at that time. I had metalica songs on my drive I was sharing. I forgot all about that.

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  10. How is Friendster not selling to Google for $30 million, but selling to MOL Global for ~$100 million a blunder?

  11. 0:20 You say Friendster had 50 million in investment. From companies including LinkedIn. But…Friendster is old. And LinkedIn is new. So unless this is recent investment, in a "newer incarnation" of Friendster, after LI got big enough to start doing its own investing…uh…

  12. no such thing as blunder or fail or succesx, do anyx no matter what and it can be all perfx. it might be as well perfect, no such thing as good or badx

  13. No mention of why raising the price of daraprim was a good thing. Fucking clickbait media bullshit. Ruining a good man's life and setting us back YEARS in medical advances. KaloBios had two promising drugs ready for testing that would cure less lethal strains of leukemia. Shkreki isn't a Jew, so he's not one of the in-group of elites that are holding back cancer cures from the masses because cancer is an element of the multigenerational population control plan for Globalism and the one world government. Pan Pacific union, aspartic trade union, European union, group them first as states, then combine their powers under the un, incremental process. Media are liars. Don't listen to anything they tell you, they twist the truth! Beware Jim Jeffries, John oliver, Trevor noah- Americans, they use Brits to brainwash you because studies show a correlation between British accents and perceptions of intelligence on behalf of Americans.

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