Shattered Dreams: Startups that Failed

We are always bombarded with news stories of entrepreneurs starting from scratch and gradually rising up to become goliaths. But in spite of all the brouhaha surrounding startups, the fact still remains that for every Facebook there is a Friendster, and for every iTunes there is a Ritmoteca: startups that vanished sooner than they came or at best, shifted to a different business altogether to survive. Here are some such startups that had a lot of potential and could very well have been the toast of the day, but for some reason or another got lost in the pages of history.

1. AltaVista

Before the onslaught of Google, AltaVista was the web search engine preferred most by internet users. It was created by a group of researchers at Digital Equipment Corporation Network Systems Laboratory and Western Research Laboratory and was launched in 1995. At its peak, it received approximately 80 million hits per day. After the acquisition of Digital by Compaq in 1996, AltaVista was re-launched as a web portal though it later went back to being a search engine trying hard to compete with Google. It was finally purchased by Yahoo! in 2003 which brought the curtain down on AltaVista last month.


Founded by three Swedes Ernst Malmsten, Kajsa Leander and Patrik Hedelin, was the one of the first online fashion stores launched during the dot-com boom of the late 1990s. The launch of the website in 1998 was initially met with a lot of excitement and had the backing of firms like JP Morgan and Goldman Sachs, but after spending a humungous $135million in the first one and a half year, it was liquidated just after two years when the dot-dom bubble burst.


Years before iTunes redefined the way we bought music, was the online music store worth visiting, especially if you were looking for Latin hits. Founded by Ivan J. Parron and Ricardo Decubas in 1998, Ritmoteca grew exponentially signing digital distribution agreements with a large number of record labels which included Universal Music Group, Warner Music Group and Sony Music Entertainment. But partly due to the dot-com bubble burst of 2000 and partly due to the arrival of Napster which enabled users to share music for free, Ritmoteca gradually went out of the limelight before finally closing shop in 2005.

4. govWorks Inc.

Another one of the dot-com companies, govWorks was founded by Kaleil Isaza Tuzman and Tom Herman in 1998. It developed a software to enable government clients to track their contracts although other functionalities were added later maiking it a full-fledged web portal. Although it was based on a fantastic business plan; mismanagement and inability to fix bugs meant that it couldn’t sustain for a long time and was sold to First Data Corporation in 2001. The story of govWorks’ transition from a startup of substance to an utter business failure was documented in the 2001 documentary feature

5. Friendster

Before the inception of MySpace and Facebook, social networking meant just Friendster. Founded by the Canadian Jonathan Abrams in 2002, Friendster quickly passed the one million membership mark, the first social networking website to do so. But just like Orkut which was virtually obliterated by Facebook, Friendster too couldn’t compete with the newer social networking sites and after being acquired by MOL Global in 2009, was repositioned two years later as a social gaming site and is now restricted mainly to Southeast Asia.

6. Sedna Wireless

Although a minion compared to those which came before in the list, I felt that an Indian startup should also find the pride of place (or whatever you call it) in this list and hence I settled for Sedna Wireless. Founded by Bangalore-based entrepreneur Rajiv Poddar in December 2006, Sedna Wireless was created with an aim to provide the Indian consumers with wireless devices with focus on WiFi. But Sedna’s ThinFone failed to make any headlines and after a brief struggle, Rajiv abandoned Sedna Wireless to start a second startup Call Graph and it remains to be seen if he gets second time lucky with this venture focussed on VoIP systems.

7. NewsTilt

NewsTilt has the ignominious reputation of being one of the fastest startup failures, being operational for just 3 months from April 2010 to July 2010 before being shut down by the founders Paul Biggar and Nathan Chong. NewsTilt had a unique business model as it intended to enable journalists to build their own brand by providing them with their own unique domain apart from marketing and content management services. But due to the clash between the co-founders as well as their lack of experience and interest in the field of journalism, NewsTilt failed to deliver most fo the services it promised which led to its debacle.

Surojit Chakraborty

Writer, HR, Bibliophile, Polyglot, Optimist

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