Here Is a List of Ways to Doom Your Startup
And yes, ‘don't expense the strippers’ is one of them
Do as I say, not as I do.
A great lesson for the startup world, where something like nine in 10 new companies fail.
Hoping to glean knowledge from those who tried and faltered: Collapsed, a new site that collects failed startups and provides analysis and lessons learned.
Purposely minimal at launch, Collapsed divides the RIP startups by region and market. Each listing contains a few quick stats (date launched, date shuttered), employee numbers, funding raised and a list of investors.
“I created Collapsed because there seemed to be a lot of buzz around a few startup succeeding whilst the majority of failed startups get ignored,” says founder Aaron Kazah.
A few reasons for startup failure, according to the site:
Ridiculous burn rate (and strippers): The founders of augmented motorcycle helmets company Skully “were accused of spending company money on luxury cars, vacations and strippers.”
Growing too fast: See RewardMe, a loyalty program for restaurants and retailers that grew and then failed to achieve “product market fit” before they ran out of cash.
Lack of a revenue-making idea: Poliana analyzed and visualized money’s influence in politics … and not surprisingly, they “could not come up with a viable business model.”
Lawsuits: A very troubling backstory behind the on-demand home cleaning service Homejoy, a company that raised $64 million and used a freelance employee model similar to Uber and TaskRabbit. You’ve been warned.
“It’s complicated”: Kazah actually suggests reading a larger Medium post on companies like 99dresses, which had a myriad of problems that couldn’t be summed up easily. The article sheds some light on 99’s issues, including visa problems, tech “fuck-ups” and “backstabbing cofounders.”
The summaries here may leave you a bit wanting, But Kazah says he’s adding an expanded area on the site for more detailed failure analysis, along with a Q&A service for new startups.
Here’s hoping that takes off.