Lessons from 10 Famous Failed Startups

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Starting a startup is a big deal. Running a successful startup is even bigger. However, saving your startup from its ultimate failure is essential. (Yes, duh!) While entrepreneurs are busy thriving to grow their startups and make them more profitable, the red flags get obscure. Something similar occurred to these 10 famous failed startups. Just like any other business, did not know they were on the road to failure until their businesses hit rock bottom. 

Also read, 10 promising Indian startup stories to inspire you

According to a report by IBM, 90% of Indian startups fail within 5 years. Well, there is no step-by-step guide an entrepreneur can get to save the business from failing. Therefore, with the increasing number of failing startups, and reasons for the failure of startups, vicarious learning is more important today than ever. Thus, we bring you stories and mistakes of startups that failed, so hopefully, you’ll learn a lesson that will save yours. 

Stories, Mistakes, and Lessons from 10 Famous Failed Startups


Famous failed startups: PepperTap

This Gurgaon-based startup is one of the biggest famous failed Indian startups of the year 2016. Being one of the best (at the time) grocery delivery startups, it was backed up by $51.2 million from investors like Snapdeal and Sequoia Capital. 

However, as the founders were at the stage of heavy fruition and were serving more than 17 cities with around 20,000 orders in a day, they began to have financial issues due to heavy discounts and logistics maintenance. Ultimately, that led to facing a loss in every order and shutting down the business entirely. 

Lesson: Even though the customer base is important, keeping that following your financial model is more crucial to surviving. Also, aiming for fast growth mostly doesn’t work in the long-run. One step at a time. 


Famous failed startups: beepi

Beepi acquired funding of a whopping $60 million. As the platform for buying and selling used and old cars, this business had a full-fledged on paper-plan and potential to succeed. And it did succeed, for a time. 

Having said that, in an attempt of becoming too big too soon, the founders spent their earnings extravagantly. On top of that, the leadership and micromanaging decisions did not work for them. Thus, the downfall began from laying off 180 members, spending $149 million in funding and merging, and ended in 2017 as the company shut off. 

Lesson: Money management can never be overlooked. No matter how much you earn, poor financial decisions can bring doom.

Related: Mistakes a startup should avoid


Famous failed startups: Doodhwala

In an interview, the founders of Doodhwala, Aakash Agarwal, and Ebrahim Akbari said that their target market is anyone who seeks fresh milk in India. Statistically, more than 85% of India’s population was seemingly potential customers for this Bangalore-based startup. 

However, their competitors were companies like BigBasket, SuprDaily, and MilkBasket. On top of that, at the time, their funding was limited. In 2019, the startup was taken over by its rival, FreshToHome. 

Lesson: Even a creative, technology-based idea needs a proper market and competition analysis. Also, know when to slow down in order to come back stronger.


Famous failed startups: Yumist

Launched in 2014, this Gurgaon-based food-tech startup was another of many food-ordering businesses. According to the founders, their business model was more focused on daily-meal, which was not a tapped market at the time.

However, that didn’t stop Yumist from becoming another case of low-funding and failed startup. Had there been a low burn business model, we might be enjoying its services even today.

Lesson: Chasing growth in a heavy and tightly packed competitive industry, such as food-delivery, needs a heavy amount of funding. However, there are so many other industries and businesses to start a business in. 

Related: 100 small business ideas with low investment

Yik Yak

Famous failed startups: yik yak

Yik Yak was valued at $400 million at its best. Also, youth welcomed this anonymous chat app immensely. As the rise of smartphones and apps was welcomed, this startup was expected to run in the long run. 

Obviously, that did not exactly happen. One of the leading apps, Snapchat, entered the market. Above that, Yik Yak could not adapt to the changing environments. 

Lesson: Your startup needs to change according to its dimensions and market from time to time. 


Famous failed startups: baby berry

This Bangalore-based app provided cognitive, emotional, and physical health for the kids to their parents. With features like reminders to get a vaccination and fixing an appointment with a pediatrician, this app was one of the most liked apps by new parents. 

Although the specific reasons are not provided by the founders of the company, reports suggest that improper revenue model was one of the biggest reasons followed by funding of $1 million acquired by the startup before shutting down in 2016.

Lesson: At times, funding is not the problem, having a strategic and customer-based revenue model is. It helps your business get monetized better.


Famous failed startups: Juicero

Founded in 2013, this company had an interesting journey from its hype to one of the famous failed startups. The founder, Doug Evans, promised a luxury juice machine while comparing himself to Steve Jobs. Also, assured his juice machine had the power to lift 2 Teslas. 

As a given, once his product was launched, he received a lot of bad press. Also, what consumers saw was completely different than what was promised: it was simply an obsolete and large juicer. 

Also read, How to drive growth through customer satisfaction

Lesson: An entrepreneur solves an existing problem, doesn’t create a new one, and false promises to hype the product. That is a certain and obvious downward spiral for the business. 


Famous failed startups: taxiforsure

Acquired by Ola, a small rival, TaxiForSure was an unexpected and unforeseen failure for founders, Raghunandan G and Aprameya Radhakrishna. When asked about the competitor Ola, Raghu said “We didn’t think the spike of Ola would last.”

Well, it did. Whereas, due to oversized ambitions and in order to balance dwindling cash reserves, the CEO of Ola had to lay off 700 employees and eventually shut down. 

Read more: Survival of the Richest: the complete story of TaxiForSure

Lesson: Taking your competition, especially when its doing better than you, is surely a bad idea.


Famous failed startups: overcart

Founded by Alex Souter and Saptarshi Nath in 2012, this Gurgaon-based startup was the first fintech startup to provide a platform to buy pre-owned goods. Along with early entry and an untapped market, the company received a funding of $3 million. 

However, Alex and Saptarshi did not capitalize on the funding well enough to survive in the market. Also, there were numerous complaints about unsatisfactory services and poor customer support system.

Lesson: Financial models, funding, and business idea need to be and stay aligned with customer satisfaction. 


Famous failed startups: doppler labs

With their most famous product, Here One, a wireless earphone and microphone, Doppler Labs started achieving success. It raised around $51 million in four years of their business. 

However, the founders didn’t equip Here One enough to beat AirPods. AirPods, supposedly, run for 5 hours of duration with a one-time charge. Whereas, Here One, lasted for only 2 hours or less. Also, due to many other manufacturing issues and delayed product launches, the company shut down. 

Lesson: The hardware business is tough. Therefore, you need to be sure your product has something that other products don’t have. 

Related: How to find a product to sell online

Except for these businesses, startups like eBay and Snapdeal are probably on the road to failure. However, there is always hope for better. Do you have a survival story of a business or lessons to share? Let us know in the comments.


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