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Lessons from failure

30 failed businesses and what they teach.

Short, plain stories of companies that stumbled or closed, and the one lesson each leaves for a founder. Written from public reporting, in our own words, with a question to ask about your own business.

Read this first

Trying is the whole job. Failing is part of it.

“Failure gave me an inner security that I had never attained by passing examinations.”
J.K. Rowling, Harvard commencement address, 2008
A point for every try
In our home, you earn a point for every try, whether it works or not. A failed attempt counts the same as a win, because the point is for having a go. That is how a child learns that failing is part of getting good at something.
Research on praise points the same way: toddlers whose parents praised effort and strategies later saw challenges more positively, and children praised for effort kept going after a setback better than children praised for being smart.
Why we tell these stories
We have real respect for the people behind most of these companies. They tried, and they put everything they had into it. Anything can go wrong at any time, in any company, and it can happen to good teams.
Read each one, take the lesson, and use it so you do not repeat it. One note: three stories, Theranos, FTX and Fyre Festival, ended in fraud convictions. We include them as warnings, not as brave tries.
1. Pick a reason.
2. Read the story and the lesson.
3. Answer the question for your business.
Demand was not proven2020
Quibi
A short-video streaming service built for phones. It raised about $1.75 billion, launched in April 2020 and announced its shutdown six months later.
The lesson. Money and famous names do not replace proof that people want the thing.
Ask yourself. What proof do I have that customers will pay, before I spend more?
Demand was not proven2016 to 2017
Juicero
A connected juicer that cost $700 at launch and later $400, and used special pre-filled packs. In 2017 a Bloomberg video showed the packs could be squeezed by hand about as well. The company shut down that September.
The lesson. If a much simpler option does the same job, your complex product has a problem.
Ask yourself. What is the simplest way a customer could solve this without me?
Demand was not proven2009 to 2015
Quirky
A company where the community voted on product ideas and Quirky made the winners. It raised well over $100 million, but weak sales could not cover high development costs, and it filed for bankruptcy in September 2015.
The lesson. People who vote for an idea are not always the people who will buy it.
Ask yourself. Who is actually paying for this, and how do I know?
Demand was not proven2011 to 2012
Color Labs
A photo-sharing app that raised $41 million just before its March 2011 launch. By September 2011 only a little under 100,000 people were still using it, and the app shut down at the end of 2012.
The lesson. A big raise is not a signal that customers want what you built.
Ask yourself. Who will use this on day one, and why would they come back?
Demand was not proven2001 to 2020
Segway
A two-wheeled personal transporter unveiled in 2001 with huge hype. Early targets were far higher than sales: about 6,000 had sold by 2003, and the original model went out of production in 2020.
The lesson. Hype is not demand. Test the real need with real buyers.
Ask yourself. Would my customer really change their habits to use this?
Demand was not proven2013 to 2015
Google Glass (consumer version)
Smart glasses sold to early adopters for $1,500. In January 2015 Google stopped selling the consumer prototype after a backlash over price and privacy. Glass later found a second life with businesses.
The lesson. A clever product still needs a clear daily use that people feel comfortable with.
Ask yourself. What will the customer do with this on an ordinary Tuesday?
Demand was not proven2011 to 2019
Google+
A social network Google launched in June 2011 to rival Facebook and built into products like YouTube. Use stayed low: Google said 90 percent of user sessions lasted under five seconds. The consumer version closed in April 2019.
The lesson. Forcing people into a product does not create real engagement.
Ask yourself. Are people choosing this, or being pushed into it?
Cash and scale1999 to 2001
Webvan
An online grocery delivery company that raised hundreds of millions of dollars, ordered about $1 billion of warehouses and trucks, and grew to ten areas before its model was proven. In 2000 it had about $178 million in sales against about $525 million in expenses. It went bankrupt in 2001.
The lesson. Scale only after the economics work in one small area.
Ask yourself. Do I make money on one customer in one place before I expand?
Cash and scale1998 to 2000
Pets.com
An online pet store that sold heavy, low-margin items like cat litter and pet food, often for less than it paid, with costly shipping. It went public in February 2000 and announced its shutdown that November.
The lesson. Know your margin on every order, including shipping and returns.
Ask yourself. What is my profit on a single typical order?
Cash and scale1998 to 2001
Kozmo.com
A one-hour delivery service for videos, snacks and small items, with no delivery fee. In 1999 it lost $26 million on $3.5 million of revenue, and it shut down in April 2001.
The lesson. Convenience has a cost. Check that customers will pay for it.
Ask yourself. Will customers pay enough to cover the cost of speed?
Cash and scale2011 to 2015
Fab.com
A design flash-sale site launched in June 2011. It raised about $335 million, expanded to Europe and India and into its own products, cut staff in 2013, and was sold to PCH International in early 2015.
The lesson. Fast growth can hide weak basics. Keep spending tied to what is working.
Ask yourself. Which part of my growth is paying for itself?
Cash and scale1999 to 2017
Jawbone
A maker of speakers, headsets and fitness trackers that raised about $900 million. Product problems, strong competition from Fitbit and years of money trouble ended in liquidation in 2017.
The lesson. Hardware punishes quality problems. Fix the product before you push growth.
Ask yourself. How many of my customers are happy enough to recommend it?
Cash and scale2012 to 2015
Homejoy
A home cleaning marketplace that shut down in July 2015. Its CEO named worker classification lawsuits as the deciding factor, alongside trouble raising money and tough competition. Reports also said many customers booked once and then dealt directly with cleaners.
The lesson. A marketplace needs a reason for customers and workers to stay on it.
Ask yourself. Why would a customer keep booking through me?
Cash and scale2012 to 2016
Pebble
A smartwatch pioneer that raised $10.3 million on Kickstarter in 2012. After layoffs and cash trouble it sold its assets to Fitbit in December 2016 for a reported $23 million, less than its debts.
The lesson. Early excitement is not a business model. Plan the cash for the next stage.
Ask yourself. How many months of cash would I have if sales stall?
Missed the changeto 2012
Kodak
A photography giant whose own engineer built the first handheld digital camera in 1975. Kodak kept selling digital cameras, but its profits stayed tied to film, and it filed for bankruptcy in January 2012. It later restructured and still operates.
The lesson. Cannibalise your own product before someone else does.
Ask yourself. What would I do if I were starting this business today?
Missed the changeto 2010
Blockbuster
A video rental chain that earned about $800 million a year from late fees at its peak. It dropped late fees in 2005, but Netflix and mail rental had already moved ahead. It filed for bankruptcy in September 2010 with about $900 million in debt.
The lesson. If your profit comes from a customer annoyance, a competitor will remove it.
Ask yourself. Where do my customers feel most annoyed with me?
Missed the changeto 2013
Nokia (phones)
Once the world’s biggest phone maker, with about 40 percent of the market in 2007. It fell behind on smartphone software, and agreed in 2013 to sell its phone business to Microsoft in a deal that closed in April 2014.
The lesson. Being big in hardware did not protect it when software became the main product.
Ask yourself. Where is the value moving in my industry?
Missed the changeto 2013
BlackBerry (phones)
A leader in keyboard phones that had no touchscreen phone when the iPhone arrived in 2007. Its first all-touch BlackBerry 10 phones came in January 2013, too late. That September it cut 4,500 jobs and shifted its focus away from consumers.
The lesson. Do not defend a strength that customers are leaving.
Ask yourself. Which of my strengths might customers stop valuing?
Missed the changeto 2011
Borders
A large bookstore chain that, in April 2001, agreed to let Amazon run its online store. It was slow to build its own online business, carried heavy store costs and debt, filed for bankruptcy in February 2011 and closed its stores that year.
The lesson. Do not give away your relationship with the customer.
Ask yourself. Which customer channel am I handing to someone else?
Missed the change2003 to 2011
MySpace
An early social network that News Corp bought for $580 million in 2005. After Facebook took the lead, News Corp sold it in June 2011 for about $35 million.
The lesson. Being first is not enough. Keep making the product better.
Ask yourself. What do users love about a rival that I am not doing?
Missed the change2002 to 2015
Friendster
An early social network whose pages became painfully slow as users joined, while leaders kept adding features. Users moved to MySpace and Facebook, and the social network shut down in June 2015.
The lesson. If growth outruns your basics, customers will leave.
Ask yourself. Can my service handle ten times the users today?
Missed the change2004 to 2012
Digg
A hugely popular news-sharing site. A redesign in August 2010 removed popular features and upset its community, and traffic fell. After about $45 million invested, it was sold in 2012 for a reported $500,000.
The lesson. Do not change what your loyal users love without testing it.
Ask yourself. Who will be upset by this change, and have I asked them?
Missed the change2010 to 2015
Rdio
A well-reviewed music streaming service that raised about $125 million but struggled against Spotify, Apple Music and other larger services. It filed for bankruptcy in November 2015, and Pandora bought its technology for $75 million.
The lesson. In a crowded market, you need a clear reason to be chosen.
Ask yourself. Why would a customer pick me over the biggest option?
Missed the change2012 to 2017
Vine
A short-video app that Twitter bought in 2012. In the first half of 2016, more than half of its users with over 15,000 followers stopped posting or left for YouTube, Instagram and Snapchat. Twitter announced the shutdown in October 2016 and closed it in January 2017.
The lesson. If creators or suppliers leave, the product follows.
Ask yourself. What keeps my best contributors coming back?
Trust and ethics2003 to 2018
Theranos
A blood-testing company that claimed to run many tests from a tiny drop of blood. Its technology did not work as claimed. Founder Elizabeth Holmes was convicted of fraud and conspiracy in January 2022 and sentenced to 11 years and 3 months.
The lesson. Never claim what the product cannot do. Trust is the business.
Ask yourself. Could I show my product working in front of a sceptic today?
Trust and ethics2019 to 2022
FTX
A crypto exchange that collapsed in November 2022. A jury found that founder Sam Bankman-Fried used customer deposits to cover expenses and to fill gaps at his trading firm Alameda Research. He was convicted in 2023 and sentenced to 25 years.
The lesson. Keep customer money separate and the books honest.
Ask yourself. Who checks my numbers besides me?
Trust and ethics2017
Fyre Festival
A luxury music festival in the Bahamas sold on celebrity promotion. Guests arrived to disaster-relief-style tents and no concert. Organiser Billy McFarland pleaded guilty to wire fraud and was sentenced to six years in prison.
The lesson. Do not sell what you cannot deliver. Marketing cannot fix operations.
Ask yourself. Can I deliver everything I am promising?
Debt and governance2010 to 2023
WeWork
A co-working company that filed to go public in August 2019. It withdrew the filing in September after investors questioned its losses, costly leases and governance. It filed for bankruptcy on November 6, 2023.
The lesson. Strong storytelling needs strong controls and an honest path to profit.
Ask yourself. Would my numbers survive outside scrutiny?
Debt and governanceto 2018
Toys R Us
A toy retailer bought in a $6.6 billion buyout in 2005 that left it with more than $5 billion in debt. Cash went to debt instead of stores and its website. It filed for bankruptcy in September 2017 and said in March 2018 it would close its US business.
The lesson. Heavy debt leaves no room to adapt.
Ask yourself. What would a bad year do to my debt payments?
Debt and governanceto 2018
Sears
A 125-year-old US retailer whose sales fell from $53 billion in 2006 to under $17 billion in 2017, with stores down from 1,980 in 2013 to 866 in 2018. Analysts blamed years of under-investment, and it filed for bankruptcy on October 15, 2018.
The lesson. Slow decline is still decline. Keep investing in what customers touch.
Ask yourself. What have I put off improving for the longest?
Voices on failure

What people who tried said about failing.

“Ever tried. Ever failed. No matter. Try again. Fail again. Fail better.”
Samuel Beckett, Worstward Ho, 1983
“The heaviness of being successful was replaced by the lightness of being a beginner again.”
Steve Jobs, Stanford commencement, 2005, on being fired from Apple
“I’ve failed over and over and over again in my life. And that is why I succeed.”
Michael Jordan, Nike commercial “Failure”
“…failure and invention are inseparable twins.”
Jeff Bezos, Amazon shareholder letter, 2015
“What did you fail at this week?”
The question Sara Blakely says her father asked her. He celebrated the answer, so she learned that failing does not cost you love.
About these stories. They are short summaries of publicly reported events, written to teach, not to judge. Failures usually have many causes, and we pick the main lesson. Each card links to the reporting it is based on, and we checked the facts in October 2026. Still, check the sources before you quote anyone.

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