The Most Spectacular Startup Flameouts of 2017
Mountains of venture capital and all the PR buzz in the galaxy couldn’t save these doomed companies.
PHOTO CREDIT: Getty Images
Many startups died in 2017. That's as it should be. Speculative new ventures are inherently risky and the market snuffs out the majority before they get far off the ground.
Some startups go down less quietly than others, though. And a select few manage to attract the kind of attention in their death throes that even successful launches seldom achieve. They go out with a bang, or at least a widely heard whimper. Here are five that did not go gentle into that good night.
Juicero made a large, expensive juicing machine that wasn't actually necessary to squeeze juice out of the pouches that the company sold. And this was after raising $120 million from well-known Silicon Valley venture capitalists, who can't have been pleased. After months of widespread derision and lackluster sales, Juicero gave up the goat in September.
YikYak was an anonymous social app that was most popular on college campuses, where it was also occasionally banned. The service was used like a geographically tethered mishmash of the Showerthoughts subreddit, Craigslist's Missed Connections, and the nasty corners of 4chan. Bonus points for prominent racism. In April, YikYak co-founders Brooks Buffington and Tyler Droll called it quits.
3) Lily Drone
Hardware is hard, which Lily Drone discovered. "The trajectory of Lily Robotics is a cautionary tale for the young and adventurous enchanted by the latest technology dreams," as Jessica Pishko wrote in Wired. Lily failed so badly at actually making the magical self-flying camera drone it pitched to crowdfunding customers that it was sued by the San Francisco DA's office, which is an accomplishment of some kind. How could that not be the beginning of the end?
Social bookmarking site Delicious, which you may remember as its earlier incarnation del.icio.us, finally met its end in June. It was purchased by Pinboard purveyor Maciej Ceglowski, who plans to maintain it as an archive of an era. "Even Yahoo, for whom mismanagement is usually effortless, had to work hard to keep Delicious down," Ceglowski wrote in his acquisition announcement. "I bought it in part so it wouldn't disappear from the web." Delicious has been limping along in dire straits for years, but now it can rest.
Infamous healthtech company Theranos is not actually dead, but it's struggling enough to try to sell its headquarters. It's been more than a year since Forbes declared founder Elizabeth Holmes's stake in the company essentially worthless and wrote down its value to the amount of cash it has raised plus a token sum for its intellectual property and sales. Theranos has likely lasted longer than spiritual counterpart Lily Drone -- neither came close to making good on its product promises -- precisely because Theranos raised so much money from investors before its sleight-of-hand was exposed. If it's still in business by the end of 2018, that would be a bigger medical miracle than any blood test.
Maker of wearables Jawbone was worth $3 billion in its heyday. Then... it wasn't. The Information reported, "Its fitness bands were expensive to produce, eating into margins and causing the company to struggle financially." Those financial struggles never abated, and FitBit's rival bit the dust for the last time.
7) Doppler Labs
Doppler Labs made smart earphones that could do things like suppress specific sounds in a user's environment. If only its business model was as smart. Despite having raised $50 million, the premium product never found its true consumer niche. If you're going to make a spend-y high-tech product, make sure that it's one people will happily spend money on. Venture capitalists won't subsidize your product forever, however buzzy it may be.
Hello made sleep-tracking devices under the brand name Sense. But despite more than $40 million in venture capital and a $250 million valuation, it wasn't long before the whole venture said goodbye. "When we first launched Sense, sleep was one of the most neglected part of our lives," wrote CEO James Proud. "Three years later, for many, it is now rightly recognised as perhaps the most important pillar of our health and wellness, alongside exercise and diet."
Take care of yourselves, dear readers.