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 *** 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! Make sure to click the like button below and subscribe for new videos every week!