Why Social Network Startups Fail and What to Learn from Them?

Six Degrees

Six Degrees is a pioneer in the social media industry. Launched in 1997, this platform was built on the Six Degrees of Separation Theory. It was established as the first digital platform that facilitated communication, created relationships, and contributed to growing social networks. Users could create profiles, send messages, and post on their bulletin boards for their social connections to see.

Reasons For Failure:

Due to its innovative idea, the website quickly became popular and peaked at 3.5 million users in 2001. However, it soon met its demise due to the following reasons:

• The idea for Six Degrees was ahead of its time. In the late 1900s, the Internet wasn’t as widely available as today. Hence, despite having millions of users, the platform lacked avenues for engagement.
• Reports suggest that Six Degrees could not generate sufficient ROI to continue its operations because it did not have a revenue model. Online advertising hadn’t emerged then, and making money through it was a thing of the future.
• Being the first social network startup, Six Degrees lacked privacy-related functionality and didn’t adapt to improve.
• Six Degrees lacked proper leadership and idea implementation, ultimately leading it to failure.

What To Learn from Six Degrees

If it had strong leadership and implementation strategies, Six Degrees could’ve been Facebook’s direct competitor today. Moreover, Six Degrees still doesn’t support HTTPS. Hence, its lack of adaptation to changing market trends and user security set it so far back that there was no way of bouncing back.

Friendster

Friendster was launched as a social gaming site in 2001 and was widely popular in Asia. Through this platform, users could participate in online games, write comments, send messages, and post and share content with others, both publicly and privately. Moreover, many users also used it as a dating and hobbyist platform.

Reasons For Failure

The platform peaked at 115 million users back in 2011. However, Friendster was indefinitely shutdown in 2015 due to the following reasons:

• While Friendster offered the first social gaming site and engaged users, it failed to become a social network. It didn’t facilitate social interaction.
• It did not have a newsfeed for users to share media, which decreased user interactivity.
• Friendster had a technical problem at the 1 million user mark. The website had slow loading times, technological constraints, and frequent service disruptions. It prevented it from scaling. 
• Friendster did not have any monetization strategy to raise revenue.
• Friendster wasn’t fast and adaptive enough to add features and respond to the industry’s evolving needs.
• Friendster also faced strict content regulation problems.

What To Learn from Friendster

Friendster teaches us that despite having the first-mover advantage, you can still fail spectacularly without investment in more research and improved server technology. If you’re going for a venture capitalist to fund your business, ensure it doesn’t hinder your creative process. Moreover, learning from the mistakes of your predecessor can truly set you apart. They did not learn from Six Degrees and had very poor management; this added oil to an already raging fire.

iTunes Ping

iTunes Ping was Apple’s leg in the social media race. It was a music-focused social network startup.  Launched in 2010, it is amongst the most famous startups that failed. Apple’s iTunes already had over 160 million users, and they were confident this venture would succeed. They allowed users to view what music their friends purchased and reviewed and provided a personalized charts list.

Reasons for Failure

Despite being affiliated with a giant like Apple, Ping failed due to the following reasons:

• Ping lacked Facebook integration when it was launched. Without backing from Facebook, Ping couldn’t tap a vast user base.
• Ping didn’t offer services that differentiated it from other social media startups.
• It only encouraged sharing small snippets rather than the entire song.
• It was based on a purchase model where users had to listen to a 30-second sample before sharing.
• Ping’s recommendations weren’t user-specific and often led to frustration when a user’s disliked artists popped up.

What To Learn from iTunes Ping

Ping teaches us that despite being affiliated with a tech giant, you can fail if you don’t make the media-sharing process seamless. Affiliating with a social networking giant opens new avenues for success, and Ping should’ve affiliated with Facebook. Moreover, differentiating yourself from the crowded social media market is essential to last in the long run.

FriendFeed

FriendFeed was launched in 2007 to become the first social aggregating website in the world. It used other social networks like Facebook, Twitter, and MySpace to build its network. FriendFeed posted content from all the big social media platforms and created a one-stop solution for users to get the latest viral content. 

Reasons for Failure:

FriendFeed was shut down in 2015 because of these reasons:

• FriendFeed had a narrow vision and did not offer much more than an aggregation of social updates. Its buzz died down very quickly, and people switched to other platforms.
• They suffered from some development issues as well.
• There were complaints of piracy. Many bloggers and content creators complained that FriendFeed had decreased engagement on their profiles. The likes, comments, and shares that were supposed to be left on the original content were being left on FriendFeed.

What to learn from FriendFeed

While FriendFeed could’ve been a great social network startup idea, its lack of rules and regulations against piracy and respect for other people’s content made it an enemy in the industry rather than a competitor. Hence, you must ensure you don’t violate other creators’ rights when using their content. Moreover, social media developers should be adept at ensuring a seamless user experience.

Google Buzz

Google launched Google Buzz in with the 2010 vision of competing with Facebook. It was a microblogging app that allowed users to share posts with friends privately and publicly. To improve user experience, it was integrated into Gmail, Twitter, Blogger, YouTube, FriendFeed, and Flickr. It had a simple interface that everyone could use.

Reasons for Failure:

Google Buzz had millions of users, but it was led to its demise because of these reasons:

• Their heavy integration strategy with other platforms caused complications in operations.
• Their “no-setup needed policy” backfired and created functionality problems.
• It created severe privacy problems for users and even led to a lawsuit that cost Google $8.5 million.

What To Learn from Google Buzz

Google Buzz was a backdoor into making a user’s Gmail account more social. However, unnecessarily integrating it with many platforms wasn’t wise. Moreover, Google should have ensured that the platform is safe and secure to retain users and ensure smooth functionality.

Google+

Google+ replaced Google Buzz in 2011 and emerged as a competitor to Facebook and Twitter. It was an interest-based social media website that enabled people to build communities to share ideas, photos, videos, and text content. It was similar to other social media platforms and had some of its features, like profile creation, inviting friends, and making videos. They added “Circles” to the social media industry, allowing people to group friends and manage content sharing based on hobbies, work, family, and more.

Reasons for Failure

Google+ was shut down in 2018, and this series of events led up to it.

• People could only create accounts with their real names. They couldn’t use pseudonyms or nicknames to make an account.
• Google banned all business profiles, leading to outrage among users and affecting its goodwill.
• Google+ alienated current and potential users by integrating Google+ and Gmail accounts. Users had to have a Google+ account to use Gmail.
• Google launched Hangouts, Blogger, Google Talk, and Huddle one after the other, and too many products complicated things.
• Google+ wasn’t very mobile-friendly.
• Google’s new update that necessitated users to have a Google+ account to comment on YouTube videos became the straw that broke the camel’s back. They faced quite a bit of backlash.

What to learn from Google+

The failure of Google+ teaches us that your social media start-up idea should revolve around people’s problems rather than company problems, i.e., create a platform for users, not force people to use your platform to optimize your other products. The perceived benefits from the app should always be greater than the effort exerted. Moreover, you should organically build your social network startup to ensure people stick with it for the long run.

Vine

Vine was launched in 2012 with the vision of creating a microvlogging platform where users could do 6-second looping videos. Vine eventually evolved to become an entertainment media platform. It competed with YouTube and Facebook with short-form video content that quickly became famous.

Reasons for Failure

Despite having hundreds of millions of users, Vine was officially shut down in 2017 due to these reasons:

• Vine’s 6-second looping videos did not meet market needs; content creators were unhappy and could not experiment with different content types.
• Vine was rigid in testing monetization options and had few revenue streams.
• Instagram and other competitors launched a 15-second video feature, which caused many people to switch from Vine. 
• Twitter acquired Vine before it was launched, and it was not their priority. This lack of attention invalidated Vine’s existence.
• Vine had managerial problems. Its key staff members and leadership didn’t stick for long.

What to learn from Vine

Vine was one of the many social media apps that failed because of a lack of a proper monetization strategy. Hence, you should invest in it when designing your business model strategy. Ensure that you expand and innovate simultaneously. If there is one thing that is apparent from Vine’s failure, it is to be the people’s app to succeed.

MySpace

MySpace was launched in 2003 and was very popular. It was the first social media app that went global. It was a powerhouse for entertainers, musicians, and everyday users because it brought a world of content to the user’s screens. It played a vital role in the development of platforms like YouTube.

Reasons for Failure

• MySpace didn’t adapt to changing market trends. Hence, users weren’t loyal to it. They switched to Facebook because it offered a more modern experience.
• They deviated from their business goals and, instead of creating a social network, became a social entertainment destination. They failed to focus on consumers and were obsessed with their competitors.
• MySpace’s interface was disorganized, and its technology and application were often faulty.
• They had limited users because they targeted a niche audience, musicians and entertainment lovers.

What to learn from MySpace

Some of the most prominent lessons from its failure are that social media startups should be more user-centric than competitor-centric. MySpace failed to conduct proper market research when launching the platform; you should avoid this mistake. Moreover, adapting to changing market trends is essential if you want to stick around. It also teaches us that social media has a very inconsistent consumer base, and to keep them engaged, you need to adapt.

Yik Yak

Yik Yak was a proximity-based social network startup where users could post content anonymously. Their posts, Yaks, could be seen by all users in a 5-mile radius, and they could react to them. Launched in 2013, it brought a new concept to the market and became popular in schools and colleges. It became the 9^th most downloaded social media app in 2013, reaching about 1.8 million downloads by 2014.

Reasons for Failure

The application was widely popular among school and college students and had a valuation of $73.5 million. However, its popularity quickly dwindled because of these reasons:

• Its anonymity became a big problem among users because they could post anything and everything without fearing consequences. This caused issues like bullying, bomb threats, sexual harassment, and hate-fueled acts of violence to increase.
• Yik Yak’s self-moderation of their platform and increased digital security made users lose interest.
• Yik Yak was a self-sustaining business, and when its popularity dwindled, investors had no reason to continue investing in it. 
• Yik Yak faced many legal challenges that ultimately led to its demise.

What to learn from Yik Yak

You can learn a lot from Yik Yak’s failure: think about potential problems in advance, consider the long-term feasibility of your social media platform’s idea, and ensure that you never lose your USP. Moreover, utilize fundraisingas a tool and don’t rely on it as the primary mode of funding; make sustainability your end goal.

Argyle Social

Argyle Social was an easy-to-use and highly interactive social media marketing tool launched in 2010. It was used by brands to improve customer engagement and lead generation. It was the most sought-after marketing tool because of its price point, and it quickly increased in popularity.

Reasons for Failure

Despite being one of the first social marketing tools, Argyle Social is one of the many failed social networks with immense potential and could’ve gone a long way. It failed because of these reasons:

• Their integration with Pardot and Marketo added value for brands. However, the brands’ competitors used stronger marketing efforts that quickly drowned out that value.
• Argyle Social’s funding efforts were never enough to keep it in the market for long.
• The rapidly changing marketing landscape opened up so many new avenues that it became difficult for the company to keep up with all the changes. The lack of funds led to a lack of skilled workforce.

What to learn from Argyle Social

Argyle Social teaches us that proper financial management could have prevented its failure. Moreover, securing sustainable modes of funding could’ve helped them keep a skilled workforce and tackle the rising competition.

See our latest relevant exploration Factors to Consider: App Development For Startups