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.

Parse

Cloud-based software developer kits

General Information
Category
Software and Hardware
Country
United States
Started
In 2011
Business Failure
Business Outcome
Shut Down
Closed
By 2016
Cause of Failure
Acquisition Flu
Founders & Employees
Number of Founders
Four
Name of Founders
Ilya Sukhar, James Yu, Kevin Lacker, Tikhon Bernstam
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
2
Total Funding Amount
$7M
Number of Investors
17
Description

Parse was a mBaaS (Mobile Backend as a service) platform. The firm offered a cloud-based platform for mobile apps developers with tools to let them build, run and test applications while taking care of the back-end support. Its main services were Parse Core to save data, Parse Cloud to run custom app codes, Parse Push for notification purposes, and Parse Analytics which had stats and optimization insights.

Cause of Failure

Parse was a growingly popular service in the developer’s community and when Facebook offered to purchase the startup in 2013 for $85 million, Parse’s founders found that it made sense for their business to join the Zuckerberg's team.

Facebook bought Parse at a time in which its stock was trading for lower than their IPO and it was not yet confident of how far its business model based on ad-serving would take them and wanted to test other possible business ideas. Thanks to Parse, Facebook was able to create a community of mobile app developers for itself. There could have also been a brief vision of developing cloud services that would match those offered by Amazon, Microsoft, and Google. However, once the Facebook business model was consolidated in the last few years making them billions, the social network lost interest in competing with the other giants in the cloud business as it would cost them millions of dollars. They were too far behind and Parse couldn't provide them with a long-term profitable source of revenue, in fact, it was most likely losing money. Facebook decided to shut down Parse in 2017 to let the team focus on other projects.

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