4 types of startups able to suck you directly into the swamp

4 types of startups able to suck you directly into the swamp

Modern history of startups teems with examples when creators of new businesses step strictly on old rakes that were littered around by their predecessors, or try to create yet another type of all-in-one “killer”. Here are some general categories of this kind of initiatives that caused harmful effect on their creators.

1. “I’m-not-a-pirate-just-wanna-make-everything-free-of-charge”

Time after time around the world new startups are established that plan to make music (movies, books – any other types of copyright-protected products whatsoever) – free of charge. Every time these initiatives come to the very same end. Indeed, all these startups that somehow offer stolen property to everyone interested, what is more at no charge, are closed. “That’s not possible! I’ll succeed in this!” – thinks yet another “startupper” and creates yet another network for the pirated content distribution. Needless to say, he makes this out of the goodness of his heart and with the best will in the world.

Let’s recall Grooveshark, for instance. This service did not upload pirated content by itself, but enabled the users to do so. Believe it or not, but the enterprise established in 2006 raised about $5 mln of investments! Having existed for less than 10 years (quite a long period for such a business) Grooveshark considered that it was more profitable for it to be dissolved than to stand against the majors that piled its creators with lawsuits.

2. “Developer-of-new-great-Social-network”

It’s strange but startuppers are still trying to create something new, popular and interesting in the social networks world. At least, this is how they present this to investors. After all, who will wish to invest in the project with the motto “We will make the new Facebook and force Zuckerberg’s masterpiece out of the market”? For the last dozen of years in Ukraine alone scores of similar projects were established, and each of them was launched under its slogan: this one – is the most patriotic, that one – is the most modern, and this one – is the most convenient in the world. But…

I have nothing to add, considering that even grandees broke down under Facebook’s strain. Let’s recall, for instance, the history of MySpace, that made the top five in the US as to the attendance as of the moment of emergence of its main competitor on the market. Half billion USD was injected to it to make it better, but soon the company was barely sold for several tens of millions.

3. “I’m-creator-and-know-better”

At some time startup creators, who have already deserved some popularity with their product, start to realize that their product – undoubted masterpiece. That the original product was truly original. It was fresh, there was nothing like it before on the market. And then its creator starts gradually be absorbed by the feeling that he is genius, and any his creature will be as genius. And if he comes to grips with his offspring that has already acquired popularity, he will surely make it even better, and the world will appreciate it.

Regardless of the product that may have such a history – software, web-service, some kind of gadget – in many instances “improvements” staying on the tail of explosive growth of popularity turn to be the “fifth wheel”. Aggressive reduction of popularity and customer outflow walk behind such “improvements”. Conclusion may be made in the manner of an anecdote about software engineer: “If the sun rises every day in the east and sets in the west – do not touch anything!”

Originators of basically bright idea – anonymous social network Secret – chose another path. Sharing of personal secrets with random people rattled the nerves of the users, and massive information “leaks” in IT field made provisions for the explosive growth of sincere interest in Secret. But the explosive growth was followed by the redesign that scared away many users, and the end of this history came almost immediately – project was closed rather quickly.

4. “My-friends-like-it-and-you-have-no-clue”

The last category of failed approach to startup creation is the situation when pretty clever, not poor and quite down to earth persons try to “push through” new project, having launched it cashing in on the wave of surrounding community. “After all, I and my friends (choose you option: my neighbors, partners, shareholders, our engineers, friends-designers like it) – like it! So, it will be a success!” When the significant investments are made and after some time such projects are often dissolved.

Here, as an example, we may mention many attempts made by a number of major companies (we are not pointing fingers at the largest internet-corporation) to something a bit different from the existing one on the market, occasionally, revolutionary – because “this shall be the success!”, and, when year or two of support is over, the project is ruined. Or, for instance, let’s recall Allmyapps startup, when a group of persons holding the same views, with financial support from relatives and friends, created application store for Windows OS. It was well-liked by the creators, who invested massively in project, but it was sold several years ago (having raised almost $1.5 mln investments) for the amount that is five times smaller than the amount raised. And you certainly would like to avoid such a sad result.