In the past three decades, there have been so many stories about some guy who ramped up a tech start-up in his garage or mother’s basement -– and then went on the make billions –- that we sometimes fail to notice that some of these ventures turn into truly spectacular failures.
Let’s take some examples:
This short-form streaming platform similar to TikTok launched in 2018 with a huge amount of investment cash and powerful backers. It raised an impressive $1.75 billion. But by December of 2020, the company had dissolved. After shuttering the operation, CEO Meg Whitman (former head of Hewlett Packard) and Jeffery Katzenberg (former Chairman of Disney) sold off the corpse of Quibi to Roku for $100 million – a huge loss from the original $1.75 billion.
It sounded like a good proposition at the time, but Loon proved to be a looney idea. A project of Google, Loon was to place a fleet of high-tech balloons to float on the edge of space. These would act as the infrastructure for a sub-space-based global internet access network. After pouring billions of dollars into the project over nine years, Alphabet pulled the plug. Alphabet is the parent company of Google. Loon CEO Alastair Westgarth said developing a “radically new technology is inherently risky” and that Loon proved to be far more complicated than they thought it would be.
After ScaleFactor launched in 2014 it seemed unstoppable and was raising an amazing $100 million a year in investment capital. It went out of business in 2020. The product was a groundbreaking AI-enabled software that was ballyhooed to revolutionize performing the accounting bookwork for small businesses.
Company leaders blamed the onslaught of COVID-19 for killing the operation, but insiders said significant and numerous internal problems were widespread and would have deep-sixed the firm anyway. ScaleFactor failed to scale.
The idea behind this company was to create a convenient smartphone for hotel guests that would take the pain out of roaming charges. Based in Hong Kong, Tink Labs raised an impressive $125 million in start-up cash and continued to attract huge investment sums. By 2018, two years after launch, it was rolling high. Two years later it passed into the tech-firm graveyard. One of the most cited is that Tink Labs raised too much money too fast which made management overconfident and sloppy in its execution strategy.