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.

Secret

Online platform to share personal secrets

General Information
Category
Social Media
Country
United States
Started
In 2013
Business Failure
Business Outcome
Shut Down
Closed
By 2015
Cause of Failure
Legal Challenges
Founders & Employees
Number of Founders
Two
Name of Founders
Chrys Bader-Wechseler, David Byttow
Number of Employees
Between 11 And 50
Funding
Number of Funding Rounds
3
Total Funding Amount
$35M
Number of Investors
21
Description

Secret was an Android and iOS app that allowed users to post content anonymously with their circle of friends or share it with a wider public. The app gained interest - and was at one point valued at 100 million- because it provided an outlet to those that didn’t want to be bound by the ‘real name’ rule of other social applications and face consequences for sharing their opinions and preferences. It also distinguished itself from other anonymous apps in that its interest factor for users could be higher since they knew that the person that shared a certain post on the app was someone that was in their contact list or circle of friends. The app became very addictive and some users said they routinely went through the motion of uninstalling the app only to install it again soon after that. The app was especially used in Silicon Valley.

Cause of Failure

The number of active users of the app rapidly declined after only 18 months from its launch.

After the initial thrill and interest of the users, a more negative and unpleasant use of the app emerged. Users, under the cloak of anonymity, engaged in all forms of cyberbullying and harassment. Secret moderators stated they weren’t ready to deal with the flood of negative posts and inappropriate behavior.

As cyberbullying stories increased, so did the media news that covered such stories. A court ruling in Brazil even banned Secret from the country deeming it unconstitutional since although free speech was allowed, free speech (and the harassments that said speech could contain) should not be anonymous.

The app lost traction and was eventually suspended.

Go on Reading

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
Zoomo

P2P transactions of pre-owned cars

Transportation
Shut Down
$6M
Bad Business Model
Transportation
India
In 2014
By 2016
Two
Between 11 And 50
Between 1M 10M
Bad Business Model
Shut Down
Brisk

Built tools for sales organizations

Marketing
Shut Down
$137K
Lack of Focus
Marketing
Sweden
In 2012
By 2016
Four
Between 11 And 50
Less Than 1M
Lack of Focus
Shut Down
Grooveshark

Web-based on-demand music application

Music
Shut Down
$4.6M
Legal Challenges
Music
United States
In 2006
By 2015
Three
Between 51 And 100
Between 1M 10M
Legal Challenges
Shut Down
Call9

On-demand doctors in emergency situations

Health
Shut Down
$34M
Bad Business Model
Health
United States
In 2015
By 2019
Three
Between 101 And 250
Between 10M 50M
Bad Business Model
Shut Down
Rafter

Textbook and course material provider for schools

Education
Acquired
$86M
Competition
Education
United States
In 2006
By 2016
One
Between 51 And 100
More Than 50M
Competition
Acquired