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.

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Gowalla

Social Guide to world's cities

General Information
Category
Social Media
Country
United States
Started
In 2007
Business Failure
Business Outcome
Acquired
Closed
By 2013
Cause of Failure
Competition
Founders & Employees
Number of Founders
Two
Name of Founders
Josh Williams, Scott Raymond
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
3
Total Funding Amount
$10.4M
Number of Investors
11
Description

Gowalla was a location-based social platform website and app that allowed users to check-in and share with others their location. It was launched in 2007 and had as a major competitor Foursquare, also a location-based app. The latter, however, has had way more success and currently boasts a user base of 45 million people while Gowalla shut down in 2012 as it reached 600,000 users.

Gowalla’s main feature was the check-in option for its users when they were close to certain “Spots”. The platform also gamified and encouraged users to actively share their location. Users could achieve a higher role and gain access to certain features if they demonstrated a high level of engagement with the app and sometimes received “items” that were provided by partner companies as promotional tools.

Cause of Failure

When the Gowalla team realized that their competitors in the check-in service were far ahead of them, it reinvents itself and tried to come up with a different design which was to support the newfound focus as a traveling and storytelling platform.

The main problem with Gowalla seemed to be that it tried to do and be too many things at once, whereas Foursquare, for one, focused on one or two basic services that users would infallibly go back to.

Gowalla had a better design and was aesthetically more pleasing, and yet FSQ, which launched in the densely populated New York, saw a rapid growth because users recommend it to their friends for the check-in and rewards features it offered and received social validation for using it, since ‘everyone’ was using it.

Funding was also probably not the main problem for the startup as Gowalla raised 3M in investments and partnered with giants such as Disney, National Geographic, and several major U.S. Universities.

Gowalla’s team joined Facebook in December 2011. Facebook claimed that it acquired the app but that it wouldn’t make use of the user data that it had generated over the years. FB representatives stated that they were rather more interested in partnering with the developers that brought forward the startup since they shared similar values and vision and could help enhance certain aspects of FB’s platform.

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