Startup Cemetery

A big resource for entrepreneurs and startup owners, in which we have collected and analyzed why +100 big companies have failed. Learn from mistakes, and avoid being part of the 90% of businesses that fail.

Digg

Enables users to share interesting stories

General Information
Category
Social Media
Country
United States
Started
In 2004
Business Failure
Business Outcome
Still Active
Closed
Active
Cause of Failure
Competition
Founders & Employees
Number of Founders
One
Name of Founders
Kevin Rose
Number of Employees
Between 51 And 100
Funding
Number of Funding Rounds
6
Total Funding Amount
$49M
Number of Investors
14
Description

Digg stated mission on launching was that of ‘democratizing’ the content and news that people saw. The concept was simple: anyone that found interesting content could ‘digg it’ and post it on the Digg site. The post and stories that received the most amount of upvotes were featured on Digg’s front page getting thus maximum exposure. The site was initially a place for geeky and tech content but it soon grew to incorporate various types of content.

Cause of Failure

Digg is a site that missed the opportunity to become a thriving social network. The site is still active but even one of its former CEOs posts more frequently on Twitter than on his own site.

The reason Digg failed were interlinked and quite obvious to point out in hindsight.

First of all, it failed to carry on with its mission of offering a platform that was free of any group’s agenda. As a matter of fact, anyone with a large circle of friends or with a numerous follower’s base (or the highest number of fake accounts) could message their posts to get the most amount of upvotes within hours, not because of the quality of the content of the post, but simply because of the connections that that specific ‘power user’ had. In an attempt to remedy to this, the site disabled the messaging feature it had and only allowed sharing with their friends by means of Facebook and Twitter. As you can imagine, the move didn’t do them any good, not only that, but it left their users dissatisfied (to say the least) by the newly implemented restriction.

And yet, these were not the only changes Digg’s team made that distanced its users. In 2010, Digg came back with a new design that, alas, had even fewer features. Digg v4, as it was called, did away with features such as down voting posts, saving favorites and posting videos.

Digg had the advantage of being the early mover since it was founded in 2004 and valued at $160 million in 2008, but it failed to adapt to its growing user base and renew the mission it had. Another bookmarking site, Reddit, slowly but inevitably started to catch up with it. As Digg users left the platform in 2010, there was Reddit offering them a ready and welcoming alternative. The interesting and inviting thing about Reddit, which is basically a spinoff of Digg, was that user content was encouraged and this allowed the platform to thrive. Self-promotion and publishing of one’s own content on Digg, instead, seemed to be frowned upon. Reddit valued and nurtured its community in ways Digg wasn’t able to do.

There were rumors that Digg would be brought back and improved upon as an app, but even so, by now it would face quite a bit of competition.

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