10 Social Media Startups that Failed and What to Learn from Their Failures

Before the 90s, the mode of communication was very limited and was confined to regions. This did restrain people to connect across the globe. The thirst for the human impulse to communicate gave birth to social media with the advancement of digital technology.

As defined in Wikipedia, “Social media are interactive digital channels that facilitate the creation and sharing of information, ideas, interests, and other forms of expression through virtual communities and networks”. 

In other words, social media is a form of digital communication where the users interact by forming online communities to share information, ideas, and personal messages. The content can be shared in various formats like text, videos, audio, e-business cards, etc.

It is interesting to note that social media has evolved from direct information sharing to a virtual gathering place, to a retail platform, to an important marketing tool in today’s world. The first social media platform was launched in 1997, Six Degrees followed by Friendster in 2001.

Many other businesses started taking this as an opportunity to make social media startups to enable and grow the online communities, making people meet and interact online, on a real-time basis.

Many of such websites were successful, however, 90% of them failed. When building a new startup, there are multiple aspects to consider like funding, idea validation, features, and more. In this article, we will take up examples of 10 such social media platforms that failed and learn from their failures.

Social Media Startups that Failed and the Lessons Learned

1. MySpace.com

Founded by a group of people, Aber Whitcomb, Brad Greenspan, Chris DeWolfe, Colin Digiaro, Josh Berman, Michael Addicott, and Tom Anderson in the year 2003, MySpace.com was the most popular social media networking platform before the launch of Facebook.

What was MySpace.com?

The URL of MySpace is still active, and one can still create an account. They have an operational office too with approximately 250-500 employees.  In the first and the only round of funding, they raised $ 37.8 million.

Post the official launch of the social media platform in the year 2004, it gained one million users in the span of just one month and 20 million registered users within a year.

On the website, registered users could create personalized profile pages, share blogs and posts, connect with other users through comments and messages, stream music of their favorite artists or even stream their own, share art, and more.

MySpace could generate revenue through the ads on their platform where the registered users crossed a mark of 75 million in the year 2008.

Reason for Failure

The platform created by the founders, who were from the industry and the marketing sector, was created with a different perspective when compared to Facebook, which became their competitor. Post making some failed iterations in the platform, MySpace was later remodeled as a platform for artists and musicians.

The primary reasons why it lost to Facebook were:

• Poorly organized interface
• Faulty technology and applications
• Negative press coverage

Although later they tried to find a remedy to the challenges they were facing by offering cleaner designs, it was a little late. As the primary source of revenue for MySpace was serving ads, too many ads made the platform less attractive. It was from the year 2010 that the users simply discontinued their use of the site. 

2. Friendster

Founded by Jonathan Abraham in 2001, Friendster was a popular social gaming site that underwent five rounds of funding from seven different investors with a total amount of $48.5 million. 

What was Friendster?

Friendster was a popular social gaming website that was actually a prototype of social networking sites. Because of the popularity it gained, it had more than 115 million users by the year 2011. The users could play online games, send messages, share content, write comments and share media content with other users privately or publicly. With its popularity and humungous user base, it was also used for dating, joining a group of people with similar interests or hobbies, and for discovering new events.

Reason for Failure

Games and connections is all fun. These were the ingredients of Friendster. Then why does it fall under the category of failed social networks? Social gaming was the reason for the users to keep coming back, however, gaming is fun only to a limit. You seek freshness and new games.

The missing dot that became the reason for this social media failure was actual social interactions with the social news feed features. Social interactions of every kind never die, and this is what differentiates Facebook from Friendster and similar failed social media apps.

This led to reduced registration and reduced use by existing users which lead to a shutdown.

[Also Read: An Ultimate Guide to Social Media App Development in 2022]

3. Vine

Founded in the year 2012 by Colin Kroll, Dom Hoffman, and Rus Yusupov, Vine underwent only one round of funding from two investors. This platform was created to share short looping video clips.

What is Vine?

Vine was very similar to what TikTok is today. This social media platform hosted short 6-second videos created and shared by users. Vine was a micro vlogging platform because of its video length restrictions along with social features like following, reshare, etc. 

The platform was acquired by Twitter even before its launch as it provided an opportunity to compete with giants like Facebook and Google on video content.

Reason for Failure

There were multiple reasons for this failed social media app. In the end, it did not come out as a profitable business that lost its popularity because of the following reasons:

• It became an entertainment media platform deviating from the original concept
• It did not refine as per the users by sticking to a strict 6-second video format for a long time.
• It was not open to exploring other monetization options
• It was not the priority for the parent company.

As quoted by one of the executives of Vine, “Instagram video was the beginning of the end”. The leadership churn and lack of direction also were one of the key reasons for it to lose popularity that consequently leading to the shutting down of the platform.

4. Zapstream

This short-lived social media platform was founded in 2015 and defunct in 2016. Founded by Devan Sood, it came up as a competition with Meerkat and Periscope within initial funding of $1 million.

What is Zapstream?

Zapstream was a social live streaming platform with live effects. The technical team took less than two months to design the application and make it up and running in no time. The special feature “Zap” differentiated Zapstream from other competitive apps.

The app was marketed with the help of social media influencers. By paying a petty amount to the influencer, Zapstream could drive 75K downloads with this marketing strategy.

Reason for Failure

The primary reasons for failure were mainly the rising competition, mismanagement of money, and inability to raise further funds to lead to this social media failure.

5. Dopplr

Dopplr was founded by Dan Gillmor, Lisa Sounio, Marko Ahtisaari, Matt Jones, and Taneli Tikka in the year 2007 that raised three rounds of funding from 16 different investors.

What is Dopplr?

With a focus on travel, Dopplr was created as social travel network service. The users could create their personalized travel itinerary that could be shared with other travelers in the contact list. This helps the travel community to plan and coordinate meetings and could track each other’s journey.

Reason For Failure

The travel social network platform was acquired by Nokia in 2009 for $20 million; it is since then that the number of users fell. Nokia did maintain the platform for some time without any new features. With falling user count and revenue, Dopplr was shut down in 2013 and was listed in failed startups.

6. ArgyleSocial

Founder Adam Covati started this social media marketing tool in the year 2010. Argyle Social could successfully raise two rounds of funds with a total of $1.6 million from two different investors.

What is Argyle Social?

Argyle Social was a social media marketing tool that was easy to use and highly interactive. The tool helped the marketers to improve their customer’s social media platform engagement and lead generation. The highlight was their price which was worth the features it provided and thus once became the most sought-after marketing tool.

Reason for Failure

The social media platforms change their Application Programming Interface (APIs) quite often. For the tool to stay relevant, Argyle Social struggled with a funds deficit that lead to the shut down of the company.

7. Gowalla

Josh Williams and Scott Raymond founded Gowalla in the year 2007, which received overall funding of $10.4 million. It underwent 3 rounds of funding from 11 investors.

What was Gowalla?

Gowalla was a location-based social media platform that allowed users to share and access their location with others. Their check-in feature was the major highlight of the application. The user could check in when they were close to a certain location. With gamification features, the app encouraged users to share their locations. On achieving the higher levels, the users could gain access to specific features of the application and could also win goodies from the companies as promotional tools.

Reason for Failure

Gowalla when realized where they are lagging in terms of technology, they pulled itself up to sustain itself in the market. With an excellent design that was aesthetically pleasing, Gowalla saw rapid growth for their check-in and reward features as everyone was using it.

The downfall started when the team joined Facebook in December 2011. According to Facebook, they were more interested in partnering with developers with similar values and visions that could help Facebook in enhancing certain aspects of its platform.

[Also Read: Features that Make a Social Media Mobile App Popular!]

8. Secret

Founded in 2013 by Chrys Bader-Wechsler, and David Byttow, Secret allowed posting content without disclosing their identity. With three rounds of funding by 21 investors, the platform could raise a total of $35 million. 

What was Secret?

As it was named, it gained popularity because it allowed users to post the content anonymously within the friend circle and share it with the wider public as well. People could share their preferences and opinions without the fear of facing consequences. It was because of this feature that it was once valued at $100 million. Specially used in Silicon Valley, users were addicted to the app.

Reason for Failure

The USP of the application became the biggest problem in some time. The feature of posting anonymous content lead to cyberbullying and harassment because of which the users’ count started dropping. Because of all these reasons, it attracted a lot of media attraction for negative reasons. That’s how the app was suspended by losing the traction of the users.

9. Yik Yak

Brooks Buffington, Tyler Droll, and Will Jamieson founded this social media platform, Yik Yak, in the year 2013 with a total funding amount of $73.5 million. It underwent three funding rounds from 11 investors.

What was Yik Yak?

Yik Yak was a location-based social media app that allowed users to post content anonymously. The posts, also known as Yaks, were visible to people in and around the proximity of 5 miles radius. It had the feature of voting up and down showing reactions. 

It became popular in closer communities like schools and college campuses in 2013-14 and thus raised substantial funding.

Reason for Failure

The feature of posting content was misused for cyberbullying and harassment. It even lead to hoax threats that created chaos on the campuses. It was for the same reason that Yik Yak became a failed social media site.

10. Crowdmix

Founded by Gareth Ingham and Ian Roberts in 2013, Crowdmix came up with the concept of sharing music on a social platform.

What was Crowdmix?

Crowdmix was a social media platform for music lovers where people could stream, share and talk about their favorite music bands. Only the beta version which was an invite-only version for DJs and musicians was launched. The official app was never released.

Reason for Failure

The primary reason for its closing down was the mismanagement of the funds. The funds were extravagantly spent on more administrative functions than the actual product. Also, the management did not have a clear vision and could not create a direction for successful app development. It turned out to be a disaster even before getting launched.

How can Appinventiv help you build a successful social media application?

At Appinventiv, the team is committed to delving into every aspect of app development keeping the business growth and market needs as a priority.

With years of experience in app development, we take pride in partnering with companies to create success stories throughout the journey. 

For instance, Appinventiv has successfully built a social media app for Vyrb which enables users to send and receive audio messages optimized for Bluetooth wearables. Results? The app has been downloaded over 50k times to date and received $1+ million funding. 

Leverage our experience to convert your idea into a successful business with our social media app development services.

Conclusion

In 2013, it became a rat race to create a social media application with a vision of outnumbering the users and leading the competition. However, there are multiple aspects that one needs to consider and ensure from the inception of the idea itself. Partnering with a company that has expertise in application development along with business sense is the only solution to save yourself from launching another failed social media site.

FAQs

Q. Why did giants like Google fail in social media?

A. Google launched Google Wave in 2009 and replaced it with Google Buzz in 2010 to compete with Facebook. Buzz failed due to privacy issues and Wave failed as it was complicated.

Q. Which was the first social networking site?

A. SixDegrees.com was the original online social networking site. It was way ahead of its and people then were probably not ready for the same. Thus it became defunct.

Q. What should be the basic ingredients for creating a successful social media application

A. Discipline is the most important factor to make any business successful. For social media you must ensure a thorough dive into the following:

• Target audience and purpose
• Features and functions
• Design and development
• Analysis

THE AUTHOR

Prateek Saxena

DIRECTOR & CO-FOUNDER