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8 Failed Startups Founded in Los Angeles

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The Postlight Podcast is your weekly source for answers to tough leadership questions, and candid conversations on tech, business, ethics and culture. New episodes on Tuesdays, wherever you get podcasts.

Here’s a list of 8 failed startups from Los Angeles.

Some of them were big, with huge teams and funding rounds.

Others were smaller, ran by the co-founders, and with no funding.

But all of them shut down.

And each for a specific cause of failure.


8 Failed Startups Founded in Los Angeles

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Design Inc.

Design Inc.

Design Inc. linked clients to talented designers. They reached market saturation and the startup could not make enough revenue to cover operation costs.

Details of the startup:

  • Founders:

    Bjoern Zinssmeister, Marc Hemeon

  • Country:

    United States

  • Industry:

    Design

  • Started in:

    2016

  • Closed in:

    2017

  • Nº of employees:

    1-10

  • Funding Amount:

    $1M-$10M

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Fuhu

Fuhu

Fuhu was a seller of cloud-served software. After reaching Top 1 on Inc 500, the company amassed an enormous amount of debt and had a very high burn rate.

Details of the startup:

  • Founders:

    John Hui, Robb Fujioka, Steve Hui

  • Country:

    United States

  • Industry:

    Software & Hardware

  • Started in:

    2006

  • Closed in:

    2015

  • Nº of employees:

    500-1,000

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Mismanagement of Funds

You can read more about their failure here.

Laurel & Wolf

Laurel & Wolf

Laurel & Wolf was a marketplace for interior design solutions. They shut down due to large spendings on marketing and a bad reputation among customers.

Details of the startup:

  • Founders:

    Brandon Kleinman, Leura Fine

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2014

  • Closed in:

    Active

  • Nº of employees:

    50-100

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

MySpace

MySpace

MySpace became the most popular social networking site before Facebook. After competing with them, they decided to repurpose it as a platform for artists.

Details of the startup:

  • Founders:

    Aber Whitcomb, Brad Greenspan, Chris DeWolfe, Colin Digiaro, Josh Berman, Michael Addicott, Tom Anderson

  • Country:

    United States

  • Industry:

    Social Media

  • Started in:

    2003

  • Closed in:

    Active

  • Nº of employees:

    250-500

  • Funding Amount:

    $10M-$50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

Quibi

Quibi

An analysis on why did Quibi, a short-form video streaming platform, shut down despite raising $2 billion from investors and having an experienced team.

Details of the startup:

  • Founders:

    Jeffrey Katzenberg

  • Country:

    United States

  • Industry:

    Entertainment

  • Started in:

    2018

  • Closed in:

    2020

  • Nº of employees:

    250-500

  • Funding Amount:

    > $50M

  • Specific cause of failure:

    Multiple Reasons

You can read more about their failure here.

ToyGaroo

ToyGaroo

Toygaroo was the Netflix of toys. Funded by a great group of people based in Los Angeles, the company appeared on Shark Tank asking $100k for a 10% stake. They ended up raising $250K in 2 funding rounds, but after some months, they had to shut down the company. Inventory and logistical costs were too high, so capital rapidly disappeared.

Details of the startup:

  • Founder:

    Phil Smy

  • Country:

    United States

  • Industry:

    e-Commerce

  • Started in:

    2010

  • Closed in:

    2012

  • Funding Amount:

    $100K-$500K

  • Specific cause of failure:

    Bad Business Model

You can read more about their failure here.

Vacation Bird

Vacation Bird

Gene founded VacationBird, a marketplace for finding your vacation rental. It was an early version of Airbnb and a VRBO competitor. Having a misalignment of incentives between co-founders and poor planning were the main causes to shut it down in 2012.

Details of the startup:

  • Founder:

    Gene Maryushenko

  • Country:

    United States

  • Industry:

    Travel

  • Started in:

    2011

  • Closed in:

    2012

  • Funding Amount:

    $0

  • Specific cause of failure:

    Lack of Experience

You can read more about their failure here.

Zapstream

Zapstream

Zapstream was a social live streaming platform, which competed with Meerkat and Periscope. The startup raised $1m from angels and grew from 0 to 100k users. However, a combination of dwindling engagement, mismanagement of money, and the inability to fundraise further, led to their shut down.

Details of the startup:

  • Founder:

    Devan Sood

  • Country:

    United States

  • Industry:

    Social Media

  • Started in:

    2015

  • Closed in:

    2016

  • Funding Amount:

    $1M-$5M

  • Specific cause of failure:

    Mismanagement of Funds

You can read more about their failure here.

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