There are many game-changing startups and talented entrepreneurs out there revolutionizing everything from medical equipment to eco-friendly transport options.
However, there’s also an abundance of failed attempts, fraudsters, and people who simply did not live up to the grand promises they made.
We’ve all been told that our best lessons lie in our failures, but these lessons are less painful when learned from the failures of others.
With that in mind, let’s dive into four of the most interesting stories of failed startup founders who were once hailed as “the next big thing.”
1. A Whimsical Failure – Loon
Let’s start with a story that demonstrates the importance of failure in growth. Though it may be one of the most influential companies on the planet, Alphabet (the parent company of Google) has had plenty of failures.
One of the most interesting ones was their startup Loon, which intended to provide global internet access via a flock of stratospheric balloons. In other words, balloons in space. What an idea!
Loon had some successes during its nine-year run, providing connectivity that helped emergency response teams during the floods in Peru and hurricane in Puerto Rico in 2017.
However, in the end, the company folded. Sadly, the project’s significant risks, multifaceted complications, and high expenses did not make for commercial viability.
2. The First Streaming Site – Pseudo
Long before the rise of YouTube, Facebook Live, TikTok, and other streaming platforms, there was Pseudo. As unbelievable as it sounds, this site was established in 1993, and it allowed for both video and audio webcasting.
Pseudo survived until the early 2000s when it succumbed to the market crash that erupted from the dot com bubble.
After the business failed, founder Josh Harris claimed it had been nothing more than performance art all along. The man had been hailed as the next Andy Warhol during Pseudo’s prime, so this is a distinct possibility.
However, former staff members have disputed his claim, stating that Pseudo absolutely was run like a business – just a poorly managed one.
Money was frittered away through employee expense accounts, and a company that beat YouTube to the punch by more than a decade failed.
3. Medical Mismanagement – Singulex
After a spectacular failure that involved whistleblower revelations and a $114 million fine, Singulex shut up shop in 2019.
The company delivered healthcare technology and services, but it was revealed that they had been providing kickbacks to physicians disguised as processing fees.
These kickbacks were offered in exchange for the physicians referring patients to HDL and Singulex laboratories.
In many cases, the tests weren’t even necessary – patients were being referred for no reason other than for the physicians and Singulex to make bank.
4. Broken Promises – LightSail Energy
This story is actually quite sad as the company really could have gone somewhere. Founded by Danielle Fong,
LightSail Energy promised to solve the problem of sustainable energy storage through the use of compressed air. The pitch was so promising that even Bill Gates invested.
Fong accrued a total of around $70 million in funding. However, instead of spending it on developing the technology, she went on one of the largest spending sprees of the 21st century.
By 2017, the funds were gone, and all LightSail Energy had produced were some gas canisters.
Though none of these stories have a happy ending, we can give them value by taking their lessons into our own lives: Don’t be afraid to fail, do be afraid to commit fraud, and never spend investor money on personal shopping trips!
___________________________________________________
Some other articles you might find of interest:
Make your business rock with these business plan writing skills:
Startup’s Guide to Write a Business Plan
Would you like to know how investors value a startup?
How Do Investors Value a Startup?
