[HN Gopher] Biggest Y Combinator Failed Startups ___________________________________________________________________ Biggest Y Combinator Failed Startups Author : nicocerdeira Score : 183 points Date : 2020-10-09 18:58 UTC (4 hours ago) (HTM) web link (www.failory.com) (TXT) w3m dump (www.failory.com) | moron4hire wrote: | That's not why Meta failed. Meta failed because their product was | garbage. | TwoBit wrote: | Has any AR product not been garbage? | cyrux004 wrote: | but none of the CEOs say that you have to switch from using | monitors at the company to AR glasses | moron4hire wrote: | The HoloLens 1 does what it claims to do. It is | uncomfortable, the FOV is narrow, but it's usable and there | aren't any big, negative surprises. You can use it and say, | "yeah, I get it, I can see where this is going". | | The Magic Leap doesn't do what they claimed it would do. But | it does do what the HoloLens 1 does, _slightly_ better in | some areas, _slightly_ worse in others. | | The Meta2 was fundamentally broken. Nothing on it worked | correctly. Everything on it was a hack job. | cyrux004 wrote: | I will have to agree. The tarrif war accelerated their demise; | but there product was far from ready. Infact the CEO of Meta | said at some point said that employees will be required to | shift from monitors to using Meta and they werent able to reach | that goal because their tech (or AR in general) wasnt there | PradeetPatel wrote: | "The Trump administration's trade war with China resulted in a | failed funding round led by a Chinese investor..." | | Is there another president that's so callous about small medium | sized businesses? | Mascobot wrote: | This list seems to be a biased list. I thought the list was first | in descending order (funding), but it's not. Some super early | stage startups were picked for some reason in the bottom section? | | To clarify: by numbers, the vast majority of startups fail, and | that's part of trying new things until one of them works great. I | know multiple founder friends that had 1-3 *big failures before | they built a great company after that. | knes wrote: | How can you make a list of failed yc companies and not mention | homejoy? | | $66m raised, bad operations, bas unit economics, lawsuits and an | abrupt shutdown. | | All of that after being the calley darling for so long. | tikwon34 wrote: | Regardless of who stole the data, does it have to do fact that | they are chinese? Ever wonder if something cultural going on | here? | pmiller2 wrote: | It's clearly not a very complete list. I wish they had | presented a more complete list, filterable by funding round, | amount raised, year founded, year shut down, and maybe one or 2 | other things. | nicocerdeira wrote: | Maybe something like this (https://www.failory.com/cemetery), | but only for YC startups? | kapitalx wrote: | I used HomeJoy once, a student showed up and said "Wow your | house looks pretty clean already, I'm not sure what I would | even do". My apartment was tidy, but it wasn't clean (at least | by my standards) | nicocerdeira wrote: | Will add it! | Sindrome wrote: | Maybe because the CEO is now a YC exec | WoahNoun wrote: | After stealing HomeJoy's customer DB for another start-up, she | is now a YC partner... | | Move fast and break things? | sillysaurusx wrote: | Ok, the situation seems to be: brother and sister cofounded | startup; startup failed; brother acquired failed startup's | assets via legal proceedings. | | Which part of this is illegal, or -- I'll meet you halfway -- | unethical? It seems like a straightforward business | transaction. | | If I'm missing something nefarious, I'd like to educate | myself to avoid it. What do you see as the problem? | | (Apologies if my facts are incorrect; this is info from | elsewhere in the thread, so maybe you know something that | hasn't been said yet.) | avery42 wrote: | I'm not familiar with the story, but this is what I found: | https://www.businessinsider.com/aaron-cheung-brings- | homejoy-... | | > The weird tale begins with an email that John Salzarulo | received Tuesday afternoon. A Los Angeles based user, | Salzarulo received an email from Cheung that "$20 cleaning | is back!" thanks to its local partner. | | > "I wanted to reach out personally today to invite you to | join a private house cleaning trial with our Los Angeles | partner, Fly Maids," Cheung wrote, not disclosing his | connection to the company. | | > When Salzarulo clicked the email link, the Fly Maids' | site logged him into his Homejoy account, which still had | his credit card number and notes about where to find the | trash can. | | I don't know if it's illegal, but I definitely think it's | unethical. | sillysaurusx wrote: | Hmmm. | | Thank you for finding that! This opens up a fascinating | discussion about ethics. | | So, to start from a purely capitalistic viewpoint, it | seems like you are free to use your property that you own | however you wish, subject to the law. That raises | questions like: in this situation, is it legal for the CC | numbers to be stored in that way? From the customer's | POV, they authorized HomeJoy to store their CC info, not | Fly Maids. But that leads to the question of: those CC | numbers are stored somewhere (or the authorization token) | and those assets were a part of the sale. | | I don't know. It's a massive advantage to have your | customers in a position of "just click this button to | give us money" rather than pestering for CC details. | | It's a little odd, to be sure, but... it seems like | unless it's illegal, it might not be unethical to take | advantage of that opportunity. It depends how you feel | about capitalism, I suppose. _If_ there was nothing | illegal here, which seems perhaps likely, then it seems | valid. | | From another point of view, it sounds like he was just | trying very hard to succeed, and in some sense Fly Maids | was the continuation of his previous endeavor. So I sort | of understand why it might have felt natural to reach out | to the customers you were already doing business with. | | But again, all of this has two important assumptions: (a) | he legally owned all assets, and (b) used those assets to | the letter of the law. If those are mistaken then someone | with more experience should definitely call it out. | | "When we contacted customers, we didn't tell them we were | Homejoy relaunching because we wanted to gauge reception | to our new model without the influence of Homejoy's | brand," Cheung allegedly wrote. "As a result, we scared | many customers, who expected the worst had happened to | their data. We should have told customers upfront who we | were, what we were testing, and used original content." | | I dunno. This seems pretty reasonable, honestly. It kind | of alarms me that you see this as clearly unethical, | because I could see myself making this same mistake, in a | different life. If you feel like explaining more of the | reasoning regarding the ethics, I'd personally find it | interesting to listen. | mijamo wrote: | Not everything is an asset. You do not legally own the | credit card numbers. At most you own the right to use | them to fulfill a contract. Just like if I share my | screen with an IT support company that does not give them | the right to suddenly transfer my screen to an | advertising company, except if I have been explicitly | told that would happen (and no, terms and conditions are | not enough for that, because it is way out of the | expected behavior of the contract, just like having terms | that make the user pay a billion dollar on each visit | would not make it work either). | mattkrisiloff wrote: | I used to work alongside Adora at YC and she works super hard | for the startups she is working with and is very helpful -- | totally justified for her to be there. | tikwon34 wrote: | so you said it and we should buy it? Why? Because you had | successful experience? What about people whose data is | stolen? | swyx wrote: | i dont know Adora and i'm sure she has useful things to teach | people. however i really wonder if this clouds every | interaction with people going through YC. it's kind of the | huge elephant in the room. | Judgmentality wrote: | I guess people can brand themselves as "successful" after | what is by all objective standards a spectacular failure. | | I have no idea how impressive Adora is and I cannot speak to | her qualifications, but HomeJoy should be a textbook example | of an SV failure. | [deleted] | cvhashim wrote: | This comment a little sexist. Is it just me? | Judgmentality wrote: | How is my comment sexist? | IncRnd wrote: | It's just you. | twmahna wrote: | The person who was accused of "stealing customer data" was | the other co-founder - not Adora (CEO & now YC partner). | | If you actually look into the details of the matter, what | happened was that the co-founder acquired the failed company | as it was put through a bankruptcy process. | | People who weren't privy to the process thought it was | stealing when it really wasn't different from any other | acquisition. | TimSchumann wrote: | > The person who was accused of "stealing customer data" | was the co-founder, not the CEO & now YC partner. | | So, her brother? | WoahNoun wrote: | My comment doesn't use the word CEO so I'm not sure what | point you are making. | [deleted] | jeromegv wrote: | How can you say all that and not mention the fact that they | are sibling? You make it sound like 2 separate person that | have no relationship to each other. It looks like you have | something to hide by just ignoring that big fact. | https://en.wikipedia.org/wiki/Homejoy | tt433 wrote: | Don't you think it's possible that the person you're | responding to has a different understanding of what a | sibling relationship means? I think it's a little rude to | inject your feelings about what a sibling relationship | must be and resort to innuendo. | kevinskii wrote: | You're right that it may not have been "stealing" in the | strict legal sense, but it was unethical and deceptive. | More details here: | | https://news.ycombinator.com/item?id=10466888 | hnracer wrote: | In the hedge fund world there is a mindset that if you're | going to fail, you must fail BIG (without breaking the law). | Then you get a sort of undeserved glamor associated with the | failure that can actually lead to new opportunities. For | example, the case of Brian Hunter, if he failed small he | would've been long forgotten. | nxmnxm99 wrote: | She railroaded our YC interview for having a similar model | (albeit in a different vertical) simply because she failed, | so naturally we would also fail. Aaron Harris, another failed | entrepreneur turned YC partner, has routinely done the same | I've heard. | | We're now 2 years later pushing $2M ARR profitably and about | to raise our Series A. YC not taking 7% of our company was | the best thing that ever happened to us. | | YCombinator is nothing like what it used to be. The majority | of the partners are useless as venture partners. | nodesocket wrote: | While seemingly harsh criticism, I think you may be right. | YC of the old (PG, Jessica, etc) was much more selective | and smaller inner circle. However, even when PG was at the | helm he said they passed on many insanely lucrative | opportunities. | | Picking startups is hard, like picking stocks. You aren't | gonna pick every winner, but frankly 2M in ARR after two | years is not exactly a home-run for YC. So, perhaps them | passing was the right call for YC. | | Congrats though, sounds like you've built something useful | and you can be proud of that. Plus, taking VC money ain't | all it's cracked up to be. If you can bootstrap to get to a | level that pay's yourself $200-300k a year, that's a win. | jkarneges wrote: | > frankly 2M in ARR after two years is not exactly a | home-run for YC | | It's been awhile since I looked at this deeply, but I | thought the path of a good startup is to raise a seed | with an 18 month runway, grow to 1m ARR, and then raise a | series A. Assuming that's true, growing to 2m ARR in 2 | years is in the ballpark. | crazydoggers wrote: | $2M ARR is such a small part of the story though. You | really have to look at things like cost of acquisition, | churn, gross profit, along with understanding the market | itself. Certain markets can be easy to create quick ARR | either through enormous CAC spends and/or large amounts | of churn, all of which means poor long term growth | potential. | cvhashim wrote: | That's just what happens when worthwhile initiatives get | too big and bloated. I'm sure there was a sweet spot YC was | in years ago but I guess it's no longer that. | hnracer wrote: | There's a phenomenon I've noticed in job interviews where | the interviewer will in a sense torture the interviewee if | it's a domain that the interviewer has expertise in, asking | needlessly complex questions as if to grandstand and show | off. It becomes theatrical and I can only attribute that to | some level of sadism- or narcissism-like traits. I am not | impugning Adora's motives here just commenting on my own | experience. | dx87 wrote: | I had an interviewer do that once, and it was clearly | just to show that he knew more obscure technical info | that I did, even though it was at a much lower level than | was required for the job. The other interviewer even | sighed and rolled their eyes at him, so I'm guessing it | isn't the first time he'd done it. | TimSchumann wrote: | I understand there's probably a desire to stay at least | pseudo-anonymous, given that your account was created 42 | minutes ago as of this posting, but I'd like to hear more | of this story. Feel free to post here or contact me | directly via the info in my profile. | quartz wrote: | Interesting that two of these (three if you count Unicorn Rides | which is a note within Boosted) are hardware companies and both | were a result of the recent tariff war with China. | | I've always known startups are hard but it seems that hardware | startups, even when they appear to be on a rocketship trajectory, | are nigh impossible. | ghaff wrote: | Hardware is often a lot more capital intensive, harder to get | to an MVP, and, these days, often requires software _in | addition to_ hardware. | lnsru wrote: | And that's the reasons why all the capital sources avoid | hardware startups as hard as they can. It's like betting for | a 10x slower horse than the rest. | amichal wrote: | A really good idea. Not at all the same social/economic climate | as it was at the time but I couldn't help remembering | https://en.wikipedia.org/wiki/Fucked_Company which really lent | some perspective to industry when it was so hard to understand | where the hell all these dotcoms came from and why not all of us | were getting the millions. | nimacainn wrote: | Missing from that list is Grin Scooters / Grow Mobility | (e-scooters for LATAM) which is probably one of the biggest | failures out of all YC companies in terms of investment money | raised. | | They raised $70M as Grin and then $150M after the merger with | Yellow. I think at Demo Day they were trying to raise at a $100M | cap with just an idea / pre-launch. After raising an insane | amount of money in a matter of moths, they expanded extremely | quickly to dozens of cities in several countries in LATAM while | having bad unit economics ("land-grab"). There are likely | interesting learning lessons there. | jyu wrote: | No list of YC failures is complete without mentioning Loopt. | dyeje wrote: | I remember seeing that Buttermilk company arguing with people on | their Facebook ads. | tikwon34 wrote: | I have this question on my mind and if someone could explain this | sincerely I would be very grateful. | | Time after time, YC startups seem to engage in practices which | are unethical or dark or downright scammy. Be it Homejoy, uBiome, | AirBnB (updating consent without asking). They seem to employ | aggresive marketing tactics. They work under assumption that "law | does not apply to us". Although this is true for ultra rich | people, why regular seed funded do it? Is growth focus this much | necessary to the to do outright fraud or in engage in shady | tactics? They are willing to kill other people's business and | livelihood for their growth. I would call this "preying tactics" | | Paul is very successful person and I read about him a lot. Why | companies going through YC do this? Or is this just Business-as- | usual (BAU) in Americas? Kill or be killed? | | Thanks for responding! | goatcode wrote: | I wonder who the founders were for Plurchase. It's kind of weird | that they're the only one without this info listed. | pmiller2 wrote: | This is my first time hearing about uBiome. Oh well, at least I | have one of their t-shirts from some startup trade show thingie I | went to. It's pretty cool looking. | LeCow wrote: | Does Theranos count? | | I'd say they achieved even less than most start-ups. | cortesoft wrote: | No, they don't count, because they were not a Y Combinator | startup. | qppo wrote: | Theranos wasn't a YC company | troygoode wrote: | Why would Theranos count? They were not YC. | lifeisstillgood wrote: | To all those who failed (apart from the weird sounding fraud with | the FBI), well done for actually climbing into the arena and | fighting. Better luck next time. | | To the rest of us. Schadenfreude is its own reward. | the-dude wrote: | Which reminds me : only 13 days to when the interview invitations | will be sent. | gkoberger wrote: | I don't get the last section, where you just name 4-5 small | "failed" startups. For most of them, you don't even have any real | insights! | | Why pick on them, for no reason? They didn't do anything | unethical, and most didn't seem to even raise a Series A. | | You have no clue why they failed; you just speculate... and you | don't just name the companies, you call out random founders by | name. These people put themselves out there and worked hard, and | now they're going to get a Google Alert saying they're in a blog | post called "Biggest Y Combinator Failed Startups." | | Most YC companies don't work out. In my batch (5 years ago), | about 80% are out of business now. That's okay! That's just how | it works. I'm all for talking about failures, but it's weird you | just pick on a few small random YC startups. | sillysaurusx wrote: | I had the same reaction, but then I was delighted they included | these smaller examples. It was especially interesting to hear | about the desktop search startup from the summer founder's | program. | | There's an inclination to view this sort of thing as | adversarial / picking on the founders, especially because there | are a lot of haters for successful people in general. But this | piece seemed clinical, not critical. | nicocerdeira wrote: | We aimed to cover different sizes of business, industries, | raising funds, etc. as our audience is quite broad. | gkoberger wrote: | Why call it "Biggest Y Combinator Failed Startups," and just | randomly pick on some very small companies that weren't even | contacted for their side of the story? | | Like, what could anyone learn about from what you wrote | about, for example, the vegan milk startup? You just picked | on a random small company, and then said generic stuff about | "economies of scale". | | I love hearing about failures (and am happy to talk about my | own!), but there's a difference between exploring what went | wrong, and "punching down". Now when you Google their names, | "Biggest Y Combinator Failed Startups" will be the result. | Unfair. | whymauri wrote: | I think Failory is meant to be an educational tool for | founders. I suppose there's lessons to be learned at any scale. | deft wrote: | I like how stealing is called growth-hacking now! | cbisnett wrote: | This article says Atrium ran out of money, but I feel like Justin | Kan's blog post said they gave tens of millions back to investors | when they shut down. | ryanSrich wrote: | Yeah, I commented that the list is incomplete and at times | straight up wrong. This is one example. Atrium absolutely did | not run out of money. | pvorb wrote: | Anyone else thought that the list of failed startups starts with | NerdPilots? That ad is a little misplaced. | tpurves wrote: | I didn't realize it wasn't first on yhe list until I read your | post! I though to myself, of course, why would YC fund a | contract development shop, such a wrong model for VC no wonder | they must have failed. | atlasunshrugged wrote: | They did fund Gigster which is what the business model was in | essence | hluska wrote: | Ha!! This makes my day - I thought they were on the list of | failed startups too, thought the way fact same thing as you | and didn't even realize they weren't a YC company until I got | here. :) | | Thanks friend - I needed that chuckle today! | bilbopotter wrote: | "Sponsored by" didn't do it for you | rdw wrote: | Yeah, the ads were pretty intrusive in this article. Still got | us all to engage, though! Some content marketer is happy today. | pvarangot wrote: | Yup, I was "oh they failed fast!" and then realized it was an | ad. | troughway wrote: | With the eye-raping callout (dark background -> white background | switch) half-way through the article on wanting an email address | (three callouts within the article in total), I'm shocked you | didn't finish the job and put a big fucking modal popup smack dab | in the middle as I was scrolling and ask once more. | stevewodil wrote: | Personally I find the call to actions rather tasteful on that | site | ganoushoreilly wrote: | You seem bitter, which startup was yours? | ozten wrote: | It looks like TheMelt is down to 7 grilled cheese stores. | | https://www.themelt.com/locations | phendrenad2 wrote: | Ah yes The Melt Index. You can track silicon valley startup | activity by how many tech workers are grabbing a quick grilled | cheese sandwich while their code compiles. | bsder wrote: | To be fair, Covid is a nuclear bomb dropped on the entire | restaurant sector. | | However: | | 1) Putting a grilled cheese sandwich restaurant in | _ferociously_ expensive real estate known for upscale, health- | conscious consumers can 't be smart (Irvine Spectrum Center?-- | LOL) | | 2) The food just wasn't that good. Sorry. They deserve to go | out of business. | Natsu wrote: | Why do they need 7 locations? They should downsize to one | location with an army of toaster-drones. | | Just make some specially-designed plates with a QR code target | printed on them and the drones won't even need to land, they | can just drop the food right on your plate after toasting the | sandwich into a more aerodynamic shape... | johncoogan wrote: | TheMelt wasn't in Y Combinator, but it is an interesting story. | ryanSrich wrote: | What's the story? | marcins wrote: | I found this article: https://www.wired.com/story/how-the- | trendiest-grilled-cheese... | traek wrote: | Did they go through YC? I can't find anything online about | that, but I had no clue they raised $10M from Sequoia. | Surprising. | AndrewKemendo wrote: | "The Trump administration's trade war with China resulted in a | failed funding round led by a Chinese investor, which put the | company in dire straits financially. " | | Trump is a convenient scapegoat here but in no way related to why | they failed. Meta was headed to guardianship not long after the | Meta2 was released. | | Overall Meta was just a poor experience with basically zero | traction. They changed their hardware approach from the Meta1 to | the 2 and it created a completely different experience while on | the side the Hololens was blowing everyone out of the water and | they weren't in any position to compete. Add to that the complete | collapse of Magic Leap and the bubble burst for AR this round. | | Reinforcing again - Augmented Reality is probably the hardest | market/technology to succeed or even just stay alive in. | rdw wrote: | Many startups are on their deathbed before finally succeeding. | A famous example is Fred Smith, FedEx founder, gambling the | company's last $5k, in order to come up with $24k for a | deadline[1]. Had the cards come up differently, or a political | wind had made gambling illegal, FedEx would have failed, and | someone would have been able to say that logistics was "a hard | market to succeed or even just stay alive in", and even be | correct! The casino (or lack thereof) would have been a | "convenient scapegoat". But it doesn't change the fact that | having the chance to have these kinds of lucky turnarounds seem | to play a pivotal role in a lot of success stories. | | [1] https://www.businessinsider.com/fedex-saved-from- | bankruptcy-... | 7twelve wrote: | I have this question on my mind and if someone could explain this | sincerely I would be very grateful. | | Time after time, YC startups seem to engage in practices which | are unethical or dark or downright scammy. Be it Homejoy, uBiome, | or many others. They seem to employ aggresive marketing tactics. | They work under assumption that "law does not apply to us". | Although this is true for ultra rich people, why regular seed | funded do it? Is growth focus this much necessary to the to do | outright fraud or in engage in shady tactics? They are willing to | kill other people's business and livelihood for their growth. I | would call this "preying tactics" | | Paul is very successful person and I read about him a lot. Why | companies going through YC do this? Or is this just Business-as- | usual (BAU) in Americas? Kill or be killed? | | Thanks for responding! | twmahna wrote: | Worth noting that the proximate cause of death is often times | largely uninformative as to why the startup actually failed. | | Most failed startups fit into the following timeline: was burning | more money than it was making => failed at raising more money => | did a round of layoffs / cost cuts to get economics under control | => couldn't right the ship and shut down / did a fire sale or | acquihire | | But, the above timeline doesn't teach you much about why the | company really failed. The real answer almost always involves a | multitude of contributing factors, and requires intimate | knowledge of the startup's business. | | For the most part, the only reliable source for this type of | information is one of the founders, board members, or (sometimes | but not always) c-level execs. And, even then, they have to be | willing to be vulnerable (which is very rare). | | If I could give some advice to Failory, it would be to think | about how you can incentivize founders to share their stories. As | it stands, they have little to gain and potentially a lot to lose | (e.g. being labeled one of YC's "biggest failures") | dcolkitt wrote: | > But, the above timeline doesn't teach you much about why the | company really failed. | | I for one would like to see this table with the founders' | average email response times. | | https://news.ycombinator.com/item?id=19375483 | wtvanhest wrote: | Probably be much more informative to talk to non-c-level | employees who do not have an incentive to modify the story. | new_realist wrote: | Most startups fail. I don't think most founders have the acumen | to really know the full story of their own failure. | gibolt wrote: | There is a difference between knowing the difference and | admitting it. | | When you run a business from start to scale, you likely know | the main failure point, and it is probably a few simple | variables. | sjtindell wrote: | As a relative outsider, I would hope being labeled as one of | the biggest failures would be a mark of experience among a set | that claims or claimed to uphold the "fail fast" mentality and | treats failure like the learning experience it is. | ZephyrBlu wrote: | "fail fast" refers to experiments, not the whole damn | company. | majormajor wrote: | A new company is almost by definition an experiment. | ericlevine wrote: | Quick note: you got the pronoun wrong for the founder of The | Buttermilk Company when referencing her Medium post. | ryanSrich wrote: | This list feels wrong and incomplete. The startups at the end are | completely random. If you included the full list of failed YC | startups regardless of funding it would be hundreds deep. I don't | understand what I just read. | Alupis wrote: | How's Y Combinator doing these days? | | Many smaller base hits, a few home runs, or striking out? I don't | follow the VC world much. | pbiggar wrote: | Missing Airware - $112M raised. | | (https://techcrunch.com/2018/09/14/airware-shuts-down/) ___________________________________________________________________ (page generated 2020-10-09 23:00 UTC)