Why do startups fail? There’s a number of reasons. Sometimes its the wrong person at the wrong time.
Sometimes though, the problem is just too big too tackle.
Sometimes there’s a reason nobody has been able to solve the problem a startup is tackling.
What follows is a list of such ideas, culled from a question on Quora: “What are some startup ideas that persistently fail?“
People in that thread pointed out that many ideas failed time and time again until someone figured it out. Groupon is one such company.
Tackling a problem that has regularly vexed most startups is just the sort of hubristic move we’d expect from a startup. We fully expect people to keep trying to make it work. It’s the just that sort of hubris that makes entrepreneurs.
The fact of the matter is Google, and to a much lesser extent Bing, own the search market. Ask Barry Diller, if you don't believe us.
Yet, startups still spring up hoping to disrupt the incumbents. Cuil flopped. Wolfram Alpha is irrelevant. Powerset, which was a semantic search engine was bailed out by Microsoft, which acquired it.
It's a very tempting idea. Collect data from people about their tastes and preferences. Then use that data to create recommendations for others. Or, use that data to create recommendations for the people that filled in the information.
It doesn't work. The latest to try is Hunch and Get Glue. Hunch is pivoting towards non-consumer-facing white label business. Get Glue has had some success of late, but it's hardly a breakout business.
Maybe Tim Armstrong, AOL, and Patch will prove it wrong, but to this point nobody has been able to crack the local news market and make a sustainable business.
In theory creating a network of local news sites that people care about is a good idea. You build a community, there's a baked in advertising group with local businesses, and classifieds. But, it appears to be too niche to scale into a big business.
Micropayments are one idea that's tossed around to solve the problem of paying for content on the Web.
If you want to read a New York Times story it would only cost a nickel! Or on Tumblr, if you want to tip a blogger or pay for a small design you could with ease. So far, these micropayment plans have not worked.
If any startup says it's going to eliminate email, it's destined for failure.
You can iterate on the inbox, and try to improve it, but even that's not much of a business. The latest high profile flop in this arena is Google Wave. It was supposed to change email forever. It was going to displace email. Didn't happen.
Considering how frustrated people are with car companies, you'd think launching a new one would be perfect for a startup.
So far, that's not the case. You can point to Tesla as a success, and considering it IPO'd it's hard to argue against it.
But, Tesla has sold fewer than 2,000 cars since it was founded in 2003. It's far from certain it will succeed. Even when its next car comes out, Nissan could be making a luxury electric car that competes with Tesla.
Beyond Tesla there's a wake of startup car companies that have flopped, or are struggling. (Fisker, V-Vehicle, Aptera, etc.)
No industry has been as savaged by the Internet as the music industry.
It was the first major industry we can think of that was obliterated by the Internet. At first you could fault clumsy record labels for missing the fad. But at this point, it appears as though it was just the way things had to be.
There are no successful web music ventures. Certainly no successful startups. iTunes is a success. Lala was barely working when Apple bought it. eMusic is not a smash hit. Even Amazon's digital music business is tiny.
If Apple can't get TV through the web right, you know it's a tough business to crack.
That's not stopping the people at Boxee, Roku, and now Google from trying, though.
There's some fundamental disconnect between the web and TV that has eluded startups. Steve Jobs says people just don't want another box in their homes. Maybe that's true. And maybe Google TV software baked into TVs is the answer.
It's a niche audience, so it just doesn't work.
Ben Black on Quora makes a good argument about why these startups fail: 'I think there are way too many consumer products companies and services focused on young children and the success rate is extremely low. When I was on the team at Maveron, l felt like I saw a pitch for little kid products constantly. I think many entrepreneurs have children and then see 1000 ways to make that fantastic but exhausting process better. The problem is that there are only about 4 million new kids each year in the US, so any time a value proposition is targeted on a specific age, the market is actually quite small. Also, you have to contend with Toy' R Us, Walmart and Target, who seem intent on killing every start-up they touch.'
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