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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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Leap Transit

Provider of private transit and offers bus services

Transportation
Shut Down
$2.5M
Legal Challenges
Transportation
United States
In 2013
By 2015
One
Between 51 And 100
Between 1M 10M
Legal Challenges
Shut Down
Flud

Social news reader for different platforms

Productivity
Shut Down
$3.1M
Multiple Reasons
Productivity
United States
In 2010
By 2013
Two
Between 11 And 50
Between 1M 10M
Multiple Reasons
Shut Down
Kiko

Ajax-style online calendar application

Productivity
Acquired
$50K
Bad Management
Productivity
United States
In 2003
By 2008
Two
Between 11 And 50
Less Than 1M
Bad Management
Acquired
Circa

Mobile news app on diverse topics

Productivity
Acquired
$4.7M
Multiple Reasons
Productivity
United States
In 2011
By 2015
Three
Between 11 And 50
Between 1M 10M
Multiple Reasons
Acquired
Wesabe

Personal finance management website

Finances
Shut Down
$4.7M
Bad Management
Finances
United States
In 2005
By 2010
Two
Between 11 And 50
Between 1M 10M
Bad Management
Shut Down
PostRocket

Facebook page marketing platform

Analytics
Shut Down
$610K
Poor Product
Analytics
United States
In 2010
By 2013
Two
Between 1 And 10
Less Than 1M
Poor Product
Shut Down
This is Brought to You by:
NerdPilots

NerdPilots

Get fast, reliable web, mobile and software development help 24/7.

Acadium

Acadium

120 hours of digital marketing from a remote apprentice for only $299 (+ $50 off!).

This could be your AD. Sponsor Startup Cemetery to reach +10,000 entrepreneurs.

Subscribe to Our Newsletter!

Invite us into your inbox and get immense learning and 80+ deals on tools to help you scale your startup (worth up to $50,000)!

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