9 Startups That Just Couldn’t Live Up To The Hype

When Jet.com raised $140M at a nearly $600M valuation prior to launching, some folks were left scratching their head about the coming Amazon killer. Bill Gurley of Benchmark Capital made his position clear:

Sorry, but a pricing model does not equate to a competitive advantage. When I see this stuff I fear the end is near. http://t.co/MRNBR7euVL

— Bill Gurley (@bgurley) February 12, 2015

With a host of other stealth startups like Magic Leap raising huge amounts of money prior to product launch, we wondered how other well-funded and much-hyped companies have fared in the past. Here’s a rundown of some notable startups that fit the bill. Let us know in the comments if anyone jumps to mind especially startups that lived up to their pre-launch hype.

	Adkeeper
Adkeeper, a product from Keep Holdings, allowed users to save ads so that they may be accessed to view later.
Total Funding : $43M
Status : Pivoted to Keep
Quote: “We believe AdKeeper’s solution for keeping ads will be an important and welcome addition to the internet ecosystem…This is a company with exceptional leadership and a very compelling market opportunity and business model.” – Fred Harman
What happened? : Adkeeper was supposed to be the solution to the bombardment of “needy, busy ads” and benefit both advertisers who could better target consumers, and consumers themselves who would engage with ads they liked. However, it turned out that consumers did not want to engage with ads in this way. The company pivoted with it’s remaining resources into Keep, an eCommerce site where you can save what you want to buy. H/T Shai Goldman

	Aereo
Aereo provides infrastructure technologies designed to allow consumers access to live TV across any device or platform.
Total Funding : $97M
Status : Filed for bankruptcy
Quote: “Aereo is the first potentially transformative technology that has the chance to give people access to broadcast television delivered over the Internet to any device, large or small, they desire…truly a revolutionary product.” – Barry Diller
What happened? : Aereo was meant to revolutionize the cable industry by capturing live and recorded TV to play on your computer. The company had difficulty gaining traction in the existing cities, which could have been due to the endless court battles they fought (time and resources which could have been spent improving the product). At the end, a Supreme Court ruling definitively deemed the service illegal, nipping Aereo at the bud before it could develop into the product that it aspired to be.

	Airtime
Airtime, formerly Supyo, is a Web video chat service founded by Sean Parker and Shawn Fanning.
Total Funding : $34M
Status: Shutdown, spun into OkHello
Quote: “We’re trying to restore surprise and serendipity to the Internet…It was definitely there in the early days, but it has disappeared.” – Sean Parker
What happened? : Ex-Napster founders Sean Parker and Shawn Fanning created a video chat startup meant to disrupt the communications sector. Despite being publicized by tons of celebrities in an audacious launch party, the company never got traction and slowly faded into obscurity, and has now spunout into a relatively more successful app called OkHello. H/T Bryan Chang

	Blippy
Blippy was a consumer web company that allowed users to share their credit card purchases with one another.
Total Funding : $12.8
Status : Shutdown
Quote: “Yes, I know this is a controversial idea — that’s part of what makes it potentially a great one. Imagine being able to see everything your friends buy with a credit card as they do it. ….There is actually a lot of data tied into the transactions we make, and Blippy takes that and makes it social.” – MG Siegler
What happened? : Blippy a company once valued at $46.2M, tried to take advantage of an age of “publicy”, sharing personal information with others. The site never got traction apart from press mention spikes, and the company had some mishaps after releasing some personal credit card information which tainted trust by consumers. According to reports about the company’s demise, the company never solved a problem consumers had, and people’s (public) credit card purchases were never interesting enough to drive user engagement.

	Clinkle
Clinkle is a mobile payment solution which attempts to integrate a consumer-facing mobile wallet with a merchant-facing system.
Total Funding : $30.5M
Status : Alive, pivoted from mobile payments to prepaid debit card
Quote: “Focusing mobile commerce on college and university campuses is very exciting and exactly the right thing to do…In today’s world, where mobile and social are exploding [it] is an incredibly astute place for entrepreneurs to start…I’m hopeful that Lucas is and does continue to develop and become a true product visionary and leader and believe there is that possibility.” – Jim Breyer
What happened? : Clinkle raised one of the largest seed financing rounds, getting $25M from a roster of well-known investors. After being in stealth for 3 years and getting questionable publicity about what was happening in the office, the company finally released their product and received an underwhelming response. They have currently pivoted from mobile P2P payments, and focused on their prepaid debit card with “treats”.

	Color Labs
Color.com has developed apps for iPhone and Android platforms that enable users to publish photos and have outsiders follow their photo streams.
Total Funding : $41M
Status : Assets acquired by Apple
Quote: “[Sequoia Capital] told us that every 10 years or so a company and a marketplace and an opportunity come together that’s transformative…They told us, ‘Not since Google have we seen this.’” – Bill Nguyen on Sequoia Capital
What happened? : Color Labs emerged in the wake of the photosharing explosion, and raised an eye-popping $41M in a Series A before launch. After launching, users were confused by the app and eventually gave up on it. The company tried pivoting to focus on live video streaming with a Verizon partnership, but this ultimately failed as well as the company eventually sold its assets to Apple for a reported $7M.

	Cuil
Cuil (pronounced COOL) is a search engine that aims to combine the largest Web index with content-based relevance methods, organized results, and complete user privacy.
Total Funding : $33M
Status : Shutdown, patents acquired by Google
Quote: “Even though I try to approach every startup with an open mind, there are few companies more likely to provoke knee-jerk skepticism than those claiming to compete head-to-head with Google in Web search. But a new company called Cuil looks like it could actually give Google some real competition.” – Anthony Ha
What happened? : Cuil was touted as a “Google-Killer” mostly due to the fact that it was able to index more web pages. However a month after launch the VP of Product departed and the site failed to get enough traction to rival Google. The company eventually shutdown and Google acquired several patents from the company with some ex-Cuil founders going back to work for Google.

	Jelly
Jelly is a human-powered discovery and search parsing engine driven by images.
Total Funding : Undisclosed
Status : Alive
Quote: “As I played with the product during the early days, I had a few experiences that had me thankful I had Jelly. Someone on Jelly helped me realize I had a leak in my shower based on a spot on my siding 20 feet below. I was able to help others with planning trips and shopping for the perfect new monitor.”- Josh Elman
What happened? : Jelly was a concept hinted at by Twitter co-founder Biz Stone on April Fools day, and garnered a lot of attention and speculation as the app continued to raise money from investors. Once the concept was revealed and hit the app store, its performance was not great and eventually the founder made it clear he was working on another project while letting the Jelly app continue to exist.

	Segway
Segway produces the Segway Personal Transporter, a two-wheeled, self-balancing, electric transportation device using patented dynamic stabilization technology.
Total Funding : $125M
Status : Acquired by Summit Strategic Partners
Quote: “If enough people see this machine, you won’t have to convince them to architect cities around it; it’ll just happen.”- Steve Jobs
What happened? : The Segway was supposed to be the clean alternative to cars and transform transportation as we know it. While an impressive technological feat, the Segway never quite caught on as the need for an intermediary between a car and walking was better fulfilled by the cheaper and less bulky bicycle. The company was acquired by Summit Strategic Partners in 2013.

Want more data about startup financings? Create a free account on CB Insights venture capital database.