5 famous Tech startups that failed Updated on: Sep 26, 2014

Barkha Sethi 219 Views

Establishing one’s own business is a dream for many. But this dream becomes a nightmare when the outcome of that business is not so sweet. According to a study, almost 75% startups failed between 2004 and 2010. “A new study on about 2,000 companies that received venture funding between 2004 and 2010 by Harvard Senior Lecturer Shikhar Ghosh found that most startups fail,” reveals a leading business magazine. Reasons can be numerous for such failures – bad management, immature decision making, poor budgeting or no eye for predicting future obstacles. Some firms go bankrupt, some merge with a big name or are acquired by big companies.

Be it a brand or a small startup, challenges are faced by each of them. It

Disclaimer: This PDF is auto-generated based on the information available on Shiksha as on 04-Jun-2020. doesn’t matter if the entrepreneur is a fresher or has a several years of experience. What matters is the way they handle hurdles on their way. And the solution they come out with. According to another article by a leading magazine, “There are a ton of startups trying to make it, and a lot of them just don't make the cut. In fact, 80% of new businesses fail within the first five years, according to a study by Inc. and the National Business Incubator Association.” Five years is a good time to see the acceptability and utility of a firm. Many ideas are put into action every year. Some make name and money while some die due to rejection from the customers. However, there are some names that die with the time. Shiksha.com brings a list of a few startups that failed with time: 1. Satyam Computer Services Careers of 53,000 employees came to a standstill when the Satyam scandal was revealed. The company was founded in 1987 by Raju Ramalinga. Started by a man with non-IT background, the company shocked everyone with its immense success from 1987 to 2009. The success story faltered in January 2009 when chairman Raju confessed manipulation with company’s accounts. The company’s accounts were falsified by Raju and two other members. Accounts worth US$1.47-Billion were manipulated. Company stakeholders, employees and the market suffered heavily from the scandal. New CEO and board members were appointed for Satyam. The company died in April 2009 when Mahindra & Mahindra acquired it via formal public auction. Later in 2013, the then named company, ‘Mahindra Satyam’ merged with Tech Mahindra due to tax issues. 2. Media Player This skinnable media player got love from its users for about 15 years. The geek of its time, WinAmp was a global MP3 player. Due to the success of WinAmp, creator Justin Frankel (also the founder of ) was called the ‘most dangerous geek’. But its glory faded when the company was acquired

Disclaimer: This PDF is auto-generated based on the information available on Shiksha as on 04-Jun-2020. by American Online (AOL). Mismanagement and internal politics by AOL has been cited as one of the core reasons for WinAmp’s failure. In 2010 and 2011, the MP3 player tried to survive in the market with the launch of its Android and Mac versions. But the effort was too late. Clashes between the new and old owner also affected its success. The company tried to release new versions of the player so that it can stay in the market. The entry of iTunes and iPods crashed the player. And finally, it shut down in December 2013. 3. Netscape Once known as the leader of , Netscape died in 2007. Marc Andreessen and Jim Clark founded Netscape Communications Corp. in 1994. The web-browser soon became the giant in the IT industry. Internet got meaning in that era because of the browser. World Wide Web (www) got popular because of Netscape. People loved to browse through internet. Netscape’s IPO is considered as the formal start to the dotcom era. Netscape gave everything to its users. Everything was going good until Microsoft and AOL entered the scene. AOL bought Netscape in 1998 and slowly the company started falling. During this period the Windows Explorer and Opera were launched. With this strong competition and AOL’s flaws in handling the product, the game for the browser got over. 4. The company was founded by Shawn Fanning, John Fanning, and Sean Parker in 1999. Initially the company worked well. It allowed people to share audio files and music encoded in MP3 format. The online music player was a pioneer in independent peer-to-peer file sharing service. Downloading became a task from home. Sharing was not just a part of real life but also of virtual life. The company underwent the legal scanner over copyright infringement. Various lawsuits were filed against the company for unauthorised use of music. The company assets were liquidated and it went through bankruptcy

Disclaimer: This PDF is auto-generated based on the information available on Shiksha as on 04-Jun-2020. proceedings. Software firm Roxio acquired Napster's brand and logos in 2001. Later in 2008, it was purchased by US electronics retailer Best Buy. It finally merged with Rhapsody (from Best Buy). 5. GeoCities.com Before Facebook, MySpace and Twitter, it was GeoCities which brought the concept of real people socialising in the virtual world. Initially called as Beverly Hills Internet (BHI), Geocities was founded by David Bohnett and John Rezner in 1994. In 1999, the site was purchased by Yahoo! At that time, the platform was the third most visited site on web. The idea was to get the real people participate on web, irrespective of their location and background. The site also allowed its users to create their own website. The websites could be about their interest, family tree or anything. It was based on the concept of neighborhood analogy. The users were categorised according to the place they belong to. This was changed when Yahoo acquired the company. The idea of picking up places was changed to picking up their own unique names. All went well for the next 10 years. The problems started when the technology changed. The entry of Facebook and other big social websites killed GeoCities. Yahoo started expelling the initial developers of the site to cut employees. This affected the site inversely. Finally due to mismanagement and obsolete technology, GeoCities died in 2009.

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Disclaimer: This PDF is auto-generated based on the information available on Shiksha as on 04-Jun-2020.