In the history of the business world, it should go without saying that far more companies fail than succeed. This is an unfortunate truth, with as many as 20% of new businesses failing in their first year, 50% within 5 years and 65% within 10 years. Only 35% of companies, or around one-third according to the Bureau of Labor Statistics, can celebrate a ten-year mark. 

The most challenging point for some businesses, especially founders and CEOs, is that their failures are very public. It’s one thing to fail and disappoint yourself and your family, but it’s an entirely different thing to fail on a global scale, let go of employees, and see yourself in headlines worldwide. 

10. Pets.com

• Founded: 1998
• Defunct: 2000
• Amount lost: $110 million
• Why it failed: An unsustainable business model based on too high shipping costs

The Dot-Com Burst

The poster child for the dot-com era going bust, Pets.com was a company born in 1998 and with its massive war chest of startup money, it looked to conquer the pet product delivery market. On the positive side, Pets.com saw an influx of customer activity and orders, but company management spent too much on advertising before the company was bringing in enough revenue. As a result, the company went defunct after just two short years and while it may not be the most expensive failed startup, it’s one of the most memorable. 

9. Anki

• Founded: 2010
• Defunct: 2019
• Amount lost: $205 million
• Why it failed: High-profile promise that was unable to meet customer expectations

Robots For All

The promise of Anki was a welcome one as an American robotics and AI startup that manufactured small robots for children. After receiving over $200 million in investments, the hope was that robots like Cozmo and Vector had emotional intelligence, making them a more ideal play “toy” for children. Unfortunately, the company failed to secure its last round of financing and its only place on the market was a palm-size toy that provided gibberish chitchat with children. 

8. Abound Solar

• Founded: 2007
• Defunct: 2012
• Amount lost: $614 million
• Why it failed: Unproven technology and high costs were too much for the solar industry

Affordable Solar Panels

One of two solar startups to rank among the most expensive failed startups of all time, Abound Solar lost its investors almost $614 million over five years. In an industry where price is everything, Abound Solar didn’t have the right technology or at least reliable enough technology to reduce costs low enough to meet customer demand. Separately, this company should be a lesson on not relying too heavily on government subsidies that don’t help businesses avoid marketplace realities. 

7. Webvan

• Founded: 1996
• Defunct: 2001
• Amount lost: $800 million
• Why it failed: Didn’t have the correct scale to match an overly ambitious delivery rollout service

Groceries To Your Door

The idea of door-to-door grocery delivery is a fantastic one that hits all the right spots today with services like Instacart, Shipt, and Walmart+. However, before these services, Webvan tried out a similar business starting in 1999, but it expanded too fast without building up the right amount of demand. Unfortunately, it spent a ton of money without a solid customer base and profits to sustain its quick growth. In other words, Webvan should have tested demand in a few markets before expanding. 

6. Theranos

• Founded: 2003
• Defunct: 2018
• Amount invested: $700 million – $1.4 billion
• Why it failed: Inaccurate and misleading claims about technology

Total Fraud

Arguably the best-known name on this list, Theranos has become something of the poster-child for failed startups. With hundreds of millions in investments from some of the world’s wealthiest families like the Waltons, Carlos Slim, Betsy Devos, and more, Theranos promised a revolutionary blood-test process. Unfortunately, the technology wasn’t real and the company that was at one time worth $9 billion went up in smoke leaving investors holding the bag on everything and its CEO in jail. 

5. Jawbone

• Founded: 1999
• Defunct: 2017
• Amount lost: $900 million 
• Why it failed: Failure to properly market and sell its products

Not So Wearable

Before the Apple Watch helped solidify the wearable market once and for all, Jawbone attempted to do the same thing. Established in 1999, the company was heavily focused on wearables, Bluetooth headphones, and wireless speakers. Venture capitalists poured money into the company, giving it a $3.2 billion evaluation at its peak, but the best Jawbone could manage was only capturing 3% of the market by 2015 before it wound itself down in 2017. 

4. Better Place 

• Founded: 2007
• Defunct: 2013
• Amount lost: $850 – $900 million
• Why it failed: Mismanagement, increasing infrastructure costs

The Pre-Tesla

An electric vehicle startup founded by entrepreneur Shai Agassi in 2007, Better Place was poised to look as big, if not bigger, than Tesla. Raising between $850 and $900 million in capital, the company looked to build battery-swapping stations so users could extend the range of their cars. Unfortunately, infrastructure costs were high and the company couldn’t keep operations going indefinitely. 

3. Solyndra 

• Founded: 2005
• Defunct: 2011
• Amount lost: $1.2 billion
• Why it failed: Could not compete with conventional solar panel manufacturers

The Solar Flare Out

One of the most heavily promoted startups of all time, Solyndra seemed so promising that even the Obama administration offered them $535 million in loans alongside $1.2 billion in private fundraising. Unfortunately, timing is everything in the startup world, and Solyndra’s timing couldn’t have been worse in 2011, as prices tanked for many of the materials it needed to make its panels. As a result, the company folded and the hope for widespread solar technology along with it. 

2. LeSports

• Founded: 2014
• Defunct: 2017
• Amount lost: $1.7 billion
• Why it failed: LeSports faced financial mismanagement while overpaying for broadcasting rights

Streaming Failures

With an investment of $1.7 billion, LeSports was poised to dominate the Hong Kong sports streaming industry. Backed by a cadre of big investors, the company suffered from poor management and aggressive expansion that left it unable to pay rent on its buildings at one point. The biggest lesson here is to ensure a sustainable revenue model before going to market and not to expand too quickly without ensuring profitability first. 

1. Quibi

• Founded: 2018
• Defunct: 2020
• Amount lost: $1.75 billion 
• Why it failed: Niche, mobile-only content didn’t resonate with the audience

Most Expensive Of All-Time

Widely considered the most expensive failed start-up of all time, Quibi couldn’t have been in a better place to succeed. With more than $1.75 billion invested, two massively well-known entertainment and business co-founders, Jeffrey Katzenberg and Meg Whitman, the mobile-only short-form content didn’t resonate with audiences. Quibi was too early to market with 10-minute episodes. Unlike TikTok, which is creator-focused, Quibi was too close to traditional television, which was its ultimate downfall. 

 

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