Mapping Tech Startups
More than 90% of tech startups fail. The reasons for these failures are as varied as methods to success. Why do some startups succeed while others fail?
History (Shopkick & Airtime)
- Succeeded (Shopkick): Founded in 2009; 2) Launched mobile app in 2010.
- Failed (Airtime): 1) Airtime launched in June, 2012 at a star-studded release; 2) The brainchild of Napster creators Sean Parker and Shawn Fanning.
Function (Shopkick & Airtime)
- Shopkick: The mobile incarnation gives customers deals at participating retailers as soon as they enter the store.
- Airtime: 1) Airtime works in conjunction with Facebook to let users video chat; 2) Users are paired for random chats based on areas of interest.
- Success (Shopkick): Shopkick developers invented new software, more accurate than GPS, which responds when customers walk into participating retailers.
- Failure (Airtime): The program took two year and $33.5 million in investment funds to come to fruition.
- The app is the only one of its kind (Shopkick): 1) Shopkick was rated the 4th-most-widely used shopping app in 2012; 2) The app partnered with Visa in 2011 to offer users rewards at any location that accepts Visa credit or debit
cards; 3) In 2012, the app partnered with Mastercard.
- One Airtime finally launched, it was riddled with programming bugs (Airtime): 1) Users discovered Airtime employees were monitoring their video chats to filter inappropriate content; 2) Months after Airtime hit the Internet,
projected user numbers were far below the company's expectations; 3) The company expanded Airtime to include Twitter compatibility, but was still slow to take off.
History (Level Up & MySpace)
- Succeeded (Level Up): 1) The app launched in late 2011 as a couponing service; 2) In April, 2012 the company revamped the app and changed its executive staff; 3) The new app implemented a streamlined user interface which let
users browse merchants by category and browse their transaction history.
- Failed (MySpace): 1) The site was founded in August, 2003, but launched in 2004; 2) One month after its launch, MySpace registered 1 million users; 3) Five months after launch, that number had risen to 5 million; 3) By July, 2005
MySpace was worth $327 million.
Function (Level Up & MySpace)
- Level Up: 1) Level Up lets users pay with their smartphones instead of their credit card; 2) The app also gives users unique, first-time purchase discounts in stores and unlocks other offers as they shop.
- MySpace: MySpace built on the success of Friendster to become the primary social networking site of the early 2000's.
- Level Up (success): In addition to giving users safe and convenient payment options and discounts, the app also provides other unique services.
- MySpace (failure): 1) In OCtober of 2006, 13 year-old Megan Meier killed herself due to MySpace bullying; 2) In April, 2008 Facebook brought in 115 million unique monthly visitors, the same number as MySpace; 3) In April, 2009
co-founder Chris DeWolfe stepped down as CEO.
- Level Up was the first mobile payment app to let users give to charity while shopping: The app also lets merchants custom-design their own version of Level Up, specifically geared toward their customer base.
- As Facebook grew , MySpace released nearly half of its employees in January, 2011: 1) In June, 2011, DeWolfe expressed disgust with the direction the site had taken; 2) That same month MySpace sells to Specific Media for
$35 million; 3) Many cite preference for advertisers over customers and lack of innovation as the ultimate failings of MySpace.
- In late 2012, MySpace relaunched sporting a complete redesign: 1) The revamped site borrows from popular image-sharing platforms like Tumblr and Pinterest; 2) After announcing the relaunch, the site's traffic increased, but
eventually leveled; 3) As of January, 2013 the revamped MySpace is the 138th most popular site in the US.
History (Zynga & Friendster)
- Succeeded (Zynga): 1) Created in 2007; 2) The company's first game was a small poker title on Facebook; 3) Zynga games originally made money on MySpace, but switched soon after to Facebook; 4) Since its inception, Zynga
has generated $1.5 million.
- Failed (Friendster): 1) The site launched in early 2003; 2) By the end of that year, Friendster made $13 million; 3) As MySpace succeeded, Friendster went from one of the most innovative ideas on the web to 13th among social
networks in 2007.
Function (Zynga & Friendster)
- Zynga (success); 1) Zynga creates online games which are hosted primarily through Facebook, most notably Farmville; 2) The company's founder, Mark Pincus, saw a slew of failures before the success of Zynga.
- Friendster (failure): 1) Friendster was the first major social network on the Internet; 2) On May 31st, 2011 the site erased users' pictures, blogs, and more, effectively dissolving the site.
- In 2011, all of the top Facebook-hosted games were owned by Zynga: 1) Pincus and his business partner at the time invested in Facebook in 2007, just as it was beginning to take over social media; 2) The company constantly
researches and releases new titles and hoped to make Zynga synonymous with online gaming in the same way Google is with searching.
- The ultimate failure of Friendster was that it couldn't keep up with evolving social media practices: 1) While users could generate profiles, there was very little functionality for users to interact with each other; 2) news feeds, a core
feature on Facebook, were completely absent from Friendster; 3) In Asia, a revamped version of Friendster was launched in 2011 and is growing rapidly, but success has yet to trickle to America.
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