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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HitMeUp

Developed mobile marketing applications

General Information
Category
e-Commerce
Country
United Kingdom
Started
In 2011
Business Failure
Business Outcome
Shut Down
Closed
By 2015
Cause of Failure
Lack of Experience
Founders & Employees
Number of Founders
One
Name of Founders
Charlie Pool
Number of Employees
Between 1 And 10
Funding
Number of Funding Rounds
1
Total Funding Amount
£50K
Number of Investors
1
Description

HitMeUp was a web-based business commercial center situated in London. Its zone of specialization was instant and area-based promotions. The business application enabled clients to make area-based flash deals when it experienced low sales periods. HitMeUp had also a customer's application that gave clients the ability to see a map of flash sales and deals around them. The main objective of the app was that of connecting business with clients that were looking for deals and were ready to buy on the spot thanks to its real-time and location-based service. HitMeUp advanced through three forms; Version 1 - Web-only application, Version 2 - Mobile application in addition to Web, and Version 3 - Mobile application only.

Cause of Failure

By its own admission, HitMeUp founder had no tech background when he launched the startup. Although he was well versed in the business management side and had the capital to develop his idea early on, his total dependence on someone else to develop his vision proved to be a risky thing. His idea took too much time to see the light and this brought about inflated costs.

When they finally launched Version 1, they discovered that businesses were particularly bad at selling their own product, and published post and promotions that were badly written and accompanied them with unappealing photographs of the products they were trying to sell. Furthermore, when they had a sale they didn’t want to promote it to their customers and thus lose clients who would have paid the full price for the item. They expected HitMeUp to attract a new customer base they could then sell to.

This problem was solved in the second Version where the startup provided a customer-oriented app through which businesses could promote their sales directly on the mobile environment for HitMeUp users to discover and take advantage of.

Another problem the team discovered was that using Facebook online business proved to be both awkward and not carefully conceived as people when on the platform to get in touch with their friends and usually weren’t in the particular mood for shopping, and if they were, they often ended up buying from their trusted platforms.

Finally, when experimenting with the third Version of their product they focused on a mobile-only application, which again proved unsuccessful. The app had plenty of businesses of all type of sort that were ready to sign up, but the startup hadn’t done extensive marketing outreach for their business and their users were few to enable them to scale up and sustain their business model. When business discovered that they no one showed up to redeem their coupons, they would understandably stop using the app. The failure of all the three versions eventually led to the closure of the company but was definitely an enhancing experience for the HitMeUp team.

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