Shut Down: January 2012
Newsberry was an email marketing product that was founded by the then consulting company Wildbit. It was shut down after 7 years, which is a reasonable run in itself, but the unusual thing about this story is that at the time of shutting down, Newsberry was actually profitable (to the tune of $75,000 per year).
So why did they shut down? Why didn’t they sell? Wildbit have written two blog posts (here and here) explaining their decision to kill a profitable product without selling out. The crux of the problem was that Wildbit themselves didn’t particularly like the product, weren’t proud of it, didn’t even use it and basically ignored it. The second of the posts exlpains why they didn’t sell – they wanted to, but couldn’t find a suitable buyer.
This probably doesn’t qualify as a failed startup, but it does illustrate some of the complex reasons people have for creating, maintaining and letting a startup go.
Founded: January 2008
Shut Down: December 2011
Founder: Adam Kidron
Funding: $87m (News Corporation)
The flagship product of Beyond Oblivion was Boinc, which was a music service where customers paid a one-time flat fee for a music device that would give users the right to listen to unlimited music for the life of the device (or seven years). In theory, copyright owners would be paid a “micro-royalty” for each song played. But Beyond Oblivion was a big time flameout, burning over $32m of News Corp’s money and then shutting down weeks before officially launching.
Evolver.fm has written a great post-mortem about how the company fell apart.It’s a good read and the list of failings are many, but most of them boil down to the founder and CEO Adam Kidron, who seemed to really lead the company astray with his overspending, overpromising, cheap gimmicks, poor management and poor negotiating. Incidentally, this isn’t the first time Kidron has been blamed for ruining a company. Back in 2001, he was the CEO of Urban Box Office, a cable startup that failed for many of the same reasons as Beyond Oblivion.