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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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MySpace

Social network based on personal user pages

General Information
Category
Social Media
Country
United States
Started
In 2003
Business Failure
Business Outcome
Still Active
Closed
Active
Cause of Failure
Multiple Reasons
Founders & Employees
Number of Founders
Seven
Name of Founders
Aber Whitcomb, Brad Greenspan, Chris DeWolfe, Colin Digiaro, Josh Berman, Michael Addicott, Tom Anderson
Number of Employees
Between 251 And 500
Funding
Number of Funding Rounds
1
Total Funding Amount
$37.8M
Number of Investors
2
Description

MySpace was originally launched as a side project. Started as a spin-off of Friendster, it grew rapidly to become the most popular social networking site before Facebook entered the scene. It gained 1 million users in about one month after it was officially launched in 2004 and by 2005 it had 20 million registered users. Upon registration on the site, users were given profile pages they could personalize, write posts or blogs, connect with others through comments or messages, share art, stream their own music or that of their favorite artists. The platform principally made profits by serving ads to its users which reached about 76 million in 2008.

Cause of Failure

MySpace was founded by people in the industry and marketing sector and their perspective of the platform was since the beginning very different from that of Facebook, which nevertheless became its primary competitor. MySpace tried first to ignore Facebook, then to copy it and lastly decided to repurpose itself as a platform for artist and musicians.

There are several reasons why it’s thought that MySpace lost to Facebook. Starting from its poorly organized interface to the often-faulty technology and applications on the site, it was clear that although MySpace had a superb marketing strategy, from the technical side they were way behind other platforms. They later tried to remedy these problems by offering a cleaner design and allowing third-party companies to provide applications for the site.

Since MySpace revenue source was ads serving, it was pressured by investors and partners into taking an aggressive ad publishing strategy, which made their pages even less attractive to users.

In 2010, it’s estimated that 50% of MySpaces users simply left and discontinued their use of the site and that continued as the once popular site kept changing ownership and direction every few years.

Besides buggy technology and poor management, the company also faced public image issues when the site started being associated with dubious or even scandalous figures thus alarming parents and earning MySpace negative press coverage. This only accelerated users flock to other platforms such as FB that offered the additional incentive of providing users with news and interactions related to their real-life friends as opposed to anonymous people.

MySpace is currently active and receives an estimated 15 million visitors per month as of 2016 (for comparison, Facebook has 2.07 billion monthly active users), currently has 53 million songs on the platform and an average of 13 thousand songs uploaded every day on the platform.

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37Coins

Startup that developed Bitcoin technologies

Finances
Shut Down
$525K
Lack of Funds
Finances
United States
In 2014
By 2015
Three
Between 1 And 10
Less Than 1M
Lack of Funds
Shut Down
Desti

Online travel guide app

Travel
Acquired
$2M
Bad Business Model
Travel
United States
In 2011
By 2014
Three
Between 1 And 10
Between 1M 10M
Bad Business Model
Acquired
MatterFab

Selling affordable solutions for metal 3-D printing

Software and Hardware
Shut Down
$13.2M
Bad Business Model
Software and Hardware
United States
In 2013
By 2019
One
Between 1 And 10
Between 10M 50M
Bad Business Model
Shut Down
Anki

Building emotionally intelligent robots

Software and Hardware
Shut Down
$182M
Lack of Funds
Software and Hardware
United States
In 2010
By 2019
Three
Between 101 And 250
More Than 50M
Lack of Funds
Shut Down
LayerVault

Allowed users to store and collaborate on design work

Design
Shut Down
$535K
Lack of Funds
Design
United States
In 2011
By 2014
Two
Between 11 And 50
Less Than 1M
Lack of Funds
Shut Down
Kichit

Brought local chefs to private households

Food and Beverage
Shut Down
$8.1M
Competition
Food and Beverage
United States
In 2011
By 2016
Two
Between 11 And 50
Between 1M 10M
Competition
Shut Down
This is Brought to You by:
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This could be your AD. Sponsor Startup Cemetery to reach +10,000 entrepreneurs.

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