WEBVTT - Learning from Mistakes - Tech Startup Failures 0:00:04.400 --> 0:00:07.800 Welcome to Tech Stuff, a production from I Heart Radio. 0:00:12.119 --> 0:00:15.120 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.400 --> 0:00:18.400 Jonathan Strickland. I'm an executive producer with I Heart Radio 0:00:18.440 --> 0:00:21.720 and I love all things tech. And those of you 0:00:22.120 --> 0:00:24.680 who have listened to my show for a while have 0:00:24.800 --> 0:00:28.120 heard me talk a few times about the infamous dot 0:00:28.160 --> 0:00:31.360 com crash that happened around two thousand, two thousand one. 0:00:32.080 --> 0:00:35.960 And one of the factors, and there are lots of factors, 0:00:36.240 --> 0:00:38.720 but one of them that contributed to the problem was 0:00:38.760 --> 0:00:41.280 that you had a lot of companies popping up that 0:00:41.360 --> 0:00:46.280 were based around novel and potentially awesome ideas, but they 0:00:46.360 --> 0:00:49.720 had no real way to generate revenue. And that's a problem. 0:00:49.800 --> 0:00:54.319 A company might be centered on a fantastic idea, one 0:00:54.360 --> 0:00:57.720 that appeals to a lot of people, but if there's 0:00:57.880 --> 0:01:01.200 no way to monetize the bis no, then you're living 0:01:01.240 --> 0:01:04.319 on borrowed time. You can only operate for as long 0:01:04.360 --> 0:01:07.400 as you have the money to fund it, which means 0:01:07.440 --> 0:01:11.560 you're hustling for investments from venture capitalists or you know, 0:01:11.800 --> 0:01:14.960 even better, for some bigger company to come along and 0:01:15.000 --> 0:01:18.640 scoop you up in a lucrative acquisition. Now, perhaps that 0:01:18.840 --> 0:01:23.080 larger company will actually find a way to monetize your idea, 0:01:23.280 --> 0:01:26.800 or maybe integrate your idea with other existing products and 0:01:26.840 --> 0:01:31.200 services that that company already has. Either way, for some companies, 0:01:31.840 --> 0:01:35.000 this ends up being a pretty dangerous game. It doesn't 0:01:35.040 --> 0:01:38.720 always pay off. While a company like Twitter might manage 0:01:38.760 --> 0:01:42.880 to hang around for years before developing a viable revenue model, 0:01:43.400 --> 0:01:46.399 others will fade away. So in this episode, I want 0:01:46.440 --> 0:01:50.080 to look at some tech startups that didn't survive and 0:01:50.160 --> 0:01:52.840 not really focus on the dot com crash because that 0:01:52.920 --> 0:01:58.360 was a particularly rough time that that affected a lot 0:01:58.400 --> 0:02:00.280 of companies, both good and bad. I'm going to look 0:02:00.280 --> 0:02:04.040 at stuff outside that era. Now. To be clear, I 0:02:04.120 --> 0:02:07.160 don't necessarily think that all the companies I'm going to 0:02:07.160 --> 0:02:10.560 talk about today were bad, or that the people who 0:02:10.600 --> 0:02:13.560 are working on them weren't working hard enough or anything 0:02:13.639 --> 0:02:18.200 like that. Like I said, good ideas can fail, and 0:02:18.360 --> 0:02:21.880 on the opposite side, bad ideas can sometimes really take off. 0:02:22.480 --> 0:02:27.079 A business is financial success isn't necessarily tied to how 0:02:27.160 --> 0:02:31.160 good an idea it is, you know, which is kind 0:02:31.160 --> 0:02:36.079 of frustrating, But that's capitalism, baby. So let's talk about 0:02:36.160 --> 0:02:38.480 a few companies that made a go of it but 0:02:38.919 --> 0:02:42.520 came up short in you know, more recent years. To 0:02:42.600 --> 0:02:45.280 set the stage, it is very easy for us to 0:02:45.320 --> 0:02:48.000 assume that a tech startup is one of the best 0:02:48.080 --> 0:02:51.440 bets to get rich quick. We see reports in the 0:02:51.440 --> 0:02:55.600 news all the time about companies where the valuation skyrockets. 0:02:55.919 --> 0:02:59.040 I mean, you hear about unicorns all the time in 0:02:59.120 --> 0:03:02.880 tech news. Those are startups that reach a billion dollar valuation, 0:03:03.600 --> 0:03:07.960 and most of those companies at least well many of 0:03:07.960 --> 0:03:12.400 those companies are in the tech sector. Right. It's not 0:03:12.520 --> 0:03:17.160 just tech sectors that are billion dollar unicorns, but that's 0:03:17.160 --> 0:03:19.440 typically the way I hear about it. Then again, I 0:03:19.520 --> 0:03:22.639 also cover technology for a living, so I'm already biased. 0:03:23.240 --> 0:03:26.240 But the fact of the matter is that, according to 0:03:26.280 --> 0:03:30.560 the Harvard Business School, nearly nine out of ten startups 0:03:30.600 --> 0:03:35.000 actually fail. So for every big success we hear about 0:03:35.000 --> 0:03:39.240 in the news, there are nine companies that didn't survive. 0:03:39.880 --> 0:03:42.720 And heck, I'm not even sure that this takes into 0:03:42.760 --> 0:03:47.520 consideration companies that initially appear to be a monumental success 0:03:47.600 --> 0:03:51.960 and then like a decade later, completely implode when it 0:03:52.000 --> 0:03:55.800 becomes clear that it's all, you know, built around a fantasy. 0:03:56.160 --> 0:04:00.800 Cough Faroness Cough and of course more rea. Suddenly we've 0:04:00.840 --> 0:04:04.880 had the COVID nineteen pandemic playing a major role in 0:04:05.000 --> 0:04:09.440 all factors of our lives, including business startups that were 0:04:09.440 --> 0:04:12.040 tied to activities that were meant to bring a lot 0:04:12.080 --> 0:04:16.280 of people together in a physical space. Suddenly they found 0:04:16.320 --> 0:04:20.200 their use case eliminated. You know, when I did my 0:04:20.320 --> 0:04:25.040 episode about the video service Quimby, I talked about how 0:04:25.080 --> 0:04:28.400 the pandemic has played a part and pulling the rug 0:04:28.560 --> 0:04:31.480 out of the use case for that service. And if 0:04:31.480 --> 0:04:35.080 you don't know what Quimby is, the original idea was 0:04:35.120 --> 0:04:39.000 to create a short form video content platform and they 0:04:39.000 --> 0:04:42.760 would serve up high production value videos like think TV 0:04:42.920 --> 0:04:47.320 level production value to subscribers, and each of those videos 0:04:47.320 --> 0:04:51.000 would be around ten minutes in length or shorter. The 0:04:51.040 --> 0:04:53.640 idea was that people would watch these videos on their 0:04:53.680 --> 0:04:56.800 mobile devices well, you know, like waiting on stuff like 0:04:56.880 --> 0:04:59.240 let's say you're in line at the coffee shop or whatever. 0:04:59.680 --> 0:05:03.760 Because the pandemic meant that the use case scenarios kind 0:05:03.760 --> 0:05:07.000 of went away because people were spending greater amounts of 0:05:07.000 --> 0:05:10.720 time at home. Quimby is still around right now, and 0:05:10.720 --> 0:05:12.880 the company has tried to pivot a bit by offering 0:05:12.920 --> 0:05:16.279 up the service on platforms beyond mobile devices. But you 0:05:16.320 --> 0:05:20.440 get my point. So let's talk about some big and 0:05:20.520 --> 0:05:23.159 maybe a few not so big. But you know recent 0:05:23.520 --> 0:05:26.320 tech startup failures, and one of the ones I want 0:05:26.360 --> 0:05:29.479 to cover existed for more than a decade, it received 0:05:29.520 --> 0:05:34.400 an enormous amount of financial backing, and yet it's still 0:05:34.480 --> 0:05:40.000 ultimately failed. That company was General Magic, and I should 0:05:40.040 --> 0:05:43.840 really do a full episode about this company, as it 0:05:43.880 --> 0:05:48.599 was incredibly innovative and important, and yet for years, not 0:05:48.920 --> 0:05:52.760 that many people outside the computer and telephone industries and 0:05:52.800 --> 0:05:56.000 Silicon Valley really knew much about it. Now that has 0:05:56.080 --> 0:05:59.040 changed over the years. There's a documentary that came out 0:05:59.080 --> 0:06:02.920 about this company, and that documentary came out in and 0:06:03.400 --> 0:06:06.159 so that's a great resource to learn more about it 0:06:06.200 --> 0:06:09.200 if you want to. But the founders of General Magic 0:06:10.080 --> 0:06:13.520 were incredible. They saw the writing on the wall before 0:06:13.520 --> 0:06:16.480 pretty much anyone else did. Heck, you might even argue 0:06:16.680 --> 0:06:18.920 that they saw the writing on the wall before there 0:06:19.000 --> 0:06:23.000 was a wall there. They were looking beyond the PC 0:06:23.120 --> 0:06:26.640 to see what was coming next down the pipeline, like 0:06:26.680 --> 0:06:29.920 what was going to be the next big revolution in computing, 0:06:30.240 --> 0:06:33.080 And they were convinced that the future would be centered 0:06:33.120 --> 0:06:37.599 around communications devices and mobile devices. So they got to 0:06:37.640 --> 0:06:42.320 work developing technologies that would converge into a form factor 0:06:42.400 --> 0:06:46.800 that we would recognize as sort of a proto smartphone. 0:06:47.040 --> 0:06:51.520 And keep in mind the company actually formed around n 0:06:52.520 --> 0:06:55.520 and that was before there was even a worldwide web. 0:06:56.200 --> 0:07:00.159 General Magic would do a lot of pioneering work that 0:07:00.200 --> 0:07:04.839 would later be intrinsic in smartphone design, both from a 0:07:04.880 --> 0:07:09.960 hardware standpoint and a software and user interface standpoint. The 0:07:10.000 --> 0:07:13.440 company itself had spun off from Apple, which, of course, 0:07:13.680 --> 0:07:16.640 Apple would go on to execute on many of the 0:07:16.680 --> 0:07:19.680 ideas General Magic kind of came up with and do 0:07:19.800 --> 0:07:23.880 it with enormous success. So what happened? I mean, if 0:07:24.240 --> 0:07:29.360 General Magic's ideas were so radical and transformative, why isn't 0:07:29.400 --> 0:07:33.400 the company around today? I mean, why didn't it stick around? 0:07:34.040 --> 0:07:37.720 There's not just one reason that I can point to 0:07:37.720 --> 0:07:40.720 to explain all this, but there's a collection of issues 0:07:41.200 --> 0:07:45.280 that contributed to its ultimate failure. For one, when the 0:07:45.320 --> 0:07:49.160 company started working on an operating system called magic Cap. 0:07:49.680 --> 0:07:52.720 They were doing that for an announced project. It was 0:07:52.760 --> 0:07:55.480 sort of a partnership project with Sony and A T 0:07:55.560 --> 0:08:00.720 and T was involved to feature creep became a huge issue. 0:08:01.240 --> 0:08:04.840 Feature creep is what it sounds like. During the design 0:08:04.960 --> 0:08:08.520 and development process for a product, people begin to add 0:08:08.560 --> 0:08:13.160 more and more features to the original concept, which causes 0:08:13.280 --> 0:08:18.440 that concept to bloat, and more importantly, it creates delays 0:08:18.800 --> 0:08:21.040 as the development teams have to figure out how to 0:08:21.080 --> 0:08:25.720 turn those ideas into reality. That's not easy to do. 0:08:26.160 --> 0:08:30.400 Feature creep often originates as a well intentioned idea, kind 0:08:30.400 --> 0:08:33.640 of a wouldn't it be cool if this thing we're 0:08:33.640 --> 0:08:37.840 working on could also do this other thing, but it 0:08:37.880 --> 0:08:42.800 can frequently lead to disaster or to halfhearted implementations where 0:08:43.200 --> 0:08:46.120 the product just doesn't seem very good because too much 0:08:46.240 --> 0:08:49.240 was going into it. That was a big problem for 0:08:49.320 --> 0:08:53.240 General Magic. Worse than that, though, is that when the 0:08:53.400 --> 0:08:58.079 Sony Magic Link, the product that was using this operating 0:08:58.080 --> 0:09:02.480 system they had developed. When that finally came out, hardly 0:09:02.520 --> 0:09:07.079 anyone bought it. The Magic Link was a p D, 0:09:07.240 --> 0:09:12.040 a personal digital assistant in a sort of tablet form, 0:09:12.080 --> 0:09:14.720 a small tablet form like the screen was about the 0:09:14.760 --> 0:09:18.120 size of a big smartphone, but it was a very 0:09:18.160 --> 0:09:22.199 clunky device is very thick, and this was not a 0:09:22.280 --> 0:09:25.840 knock against Sony I don't blame the company. I don't 0:09:25.840 --> 0:09:28.959 blame General Magic because the state of the art of 0:09:29.000 --> 0:09:32.920 technology in the early nineties meant it would have been 0:09:33.000 --> 0:09:36.920 impossible to make something as sleek and sexy as the 0:09:36.960 --> 0:09:39.679 smartphones of today. Keep in mind, this is more than 0:09:39.720 --> 0:09:43.800 a decade before the iPhone would come out, and it 0:09:43.880 --> 0:09:47.520 got some good reviews from you know, to tech writers 0:09:47.559 --> 0:09:50.960 of the time, but that didn't translate to actual sales. 0:09:51.440 --> 0:09:55.960 So despite having some really super smart and creative people 0:09:56.040 --> 0:10:00.760 working on and creating innovation in a space that hadn't 0:10:00.760 --> 0:10:03.440 seen it in ages, and it had the backing of 0:10:03.440 --> 0:10:06.120 big companies like Sony and A T and T, General 0:10:06.160 --> 0:10:09.840 Magic ultimately failed to get a foothold in the market. 0:10:10.320 --> 0:10:13.520 The general consensus is that it was just too soon 0:10:13.880 --> 0:10:18.000 for those technologies to gain traction. Now, you could argue 0:10:18.440 --> 0:10:22.200 that it's kind of like virtual reality, which also tried 0:10:22.240 --> 0:10:25.720 to establish a place in the market in the nineteen nineties, 0:10:26.160 --> 0:10:28.679 but it failed to do so and it almost totally 0:10:28.679 --> 0:10:34.440 faded away from public consciousness. However, we could actually argue 0:10:34.440 --> 0:10:39.800 that smartphones are not just here, they dominate the technology space, 0:10:40.160 --> 0:10:43.400 whereas VR is still kind of trying to find a 0:10:43.440 --> 0:10:46.720 place today. I mean, there's a niche market for VR, 0:10:46.880 --> 0:10:50.559 but it is not what I would call a mainstream technology, 0:10:50.760 --> 0:10:55.719 certainly nowhere near as ubiquitous as mobile tech. Now I'm 0:10:55.720 --> 0:10:58.800 gonna let off of general magic for now. That's just 0:10:58.840 --> 0:11:01.040 an overview of what happened, but if you guys want 0:11:01.080 --> 0:11:04.400 to hear a full episode on it, let me know. Next, 0:11:04.800 --> 0:11:07.880 I want to talk about a company that I'm guessing 0:11:07.920 --> 0:11:11.319 most of you probably have never heard about, and it 0:11:11.360 --> 0:11:16.840 was called Atrium Legal Technology Services, Incorporated, and the idea 0:11:17.040 --> 0:11:21.439 was to pair legal services with software. The original concept 0:11:21.520 --> 0:11:23.960 for the business was to create a law firm that 0:11:24.040 --> 0:11:29.240 could offer basic legal services at lower fees than the competition, 0:11:29.400 --> 0:11:32.960 partly through the use of software which would help automate 0:11:33.000 --> 0:11:36.680 certain processes and make things more efficient. When I say 0:11:36.880 --> 0:11:40.520 legal services, I'm mostly not talking about litigation. I'm talking about, 0:11:40.880 --> 0:11:43.840 you know, other stuff that you typically need to employ 0:11:43.960 --> 0:11:47.160 legal services for in order to get it done. So 0:11:47.200 --> 0:11:52.040 in early twenty twenty, the company actually completely shed the 0:11:52.080 --> 0:11:55.880 technology part of that business. They laid off nearly a 0:11:55.960 --> 0:11:59.600 hundred people, and they slimmed down to a more traditional 0:11:59.720 --> 0:12:03.760 law firm, again, one that's not pursuing litigation, but rather 0:12:04.160 --> 0:12:08.040 providing other legal services to tech companies in particular. In 0:12:08.080 --> 0:12:11.160 the end, while the idea to use software to help 0:12:11.200 --> 0:12:15.600 streamline things seemed really promising, the company just couldn't find 0:12:15.640 --> 0:12:18.920 a way to fit the software and the legal services 0:12:18.960 --> 0:12:24.160 together in a way that made sense. And that's sometimes 0:12:24.160 --> 0:12:26.719 the case. You'll hear of a business that has an 0:12:26.760 --> 0:12:30.320 idea that, at least on the surface level, seems like 0:12:30.360 --> 0:12:32.679 a great idea. Right, it seems like a no brainer. 0:12:32.880 --> 0:12:38.360 Let's take this traditional process, will inject technology into it 0:12:38.679 --> 0:12:42.600 and will make it more betterer. But there's not always 0:12:42.640 --> 0:12:47.000 a logical or helpful way to integrate technology into a process. 0:12:47.760 --> 0:12:50.760 Or it might be that the technology itself has to 0:12:50.800 --> 0:12:54.880 reach a new level of adaptability or capability before it 0:12:54.920 --> 0:12:57.440 will really be helpful. Like it's just too early to 0:12:57.480 --> 0:12:59.920 bring that tech in. It's going to cause more problems 0:13:00.040 --> 0:13:02.600 and it'll solve. So it might not even be a 0:13:02.800 --> 0:13:05.680 quote unquote bad idea. It might just be one that's 0:13:05.720 --> 0:13:09.640 not viable under current circumstances. It could be that we're 0:13:09.640 --> 0:13:12.920 gonna see something like Atriums Technology Division emerge in a 0:13:12.920 --> 0:13:15.640 few years, and at that point it will work great. 0:13:16.520 --> 0:13:19.199 This kind of reminds me of when I was a 0:13:19.280 --> 0:13:23.320 kid in high school and at that time, computers were 0:13:23.400 --> 0:13:26.960 just starting to become, you know, like a high school fixture. 0:13:27.640 --> 0:13:30.400 But it was one of those things where everyone recognized 0:13:30.480 --> 0:13:34.160 the value of technology, but not everyone had a good 0:13:34.240 --> 0:13:38.520 way to implement it into the educational process. So you 0:13:38.520 --> 0:13:42.200 would have classrooms with computers in them, but not really 0:13:42.240 --> 0:13:47.079 a meaningful way to use those computers for any good purpose. 0:13:47.160 --> 0:13:50.480 They just kind of took up space. And that was 0:13:50.520 --> 0:13:53.559 a real issue and continued to be an issue well 0:13:53.600 --> 0:13:58.800 through my high school years, where schools were competing to 0:13:59.000 --> 0:14:02.920 get funding to buy stuff like computers and ultimately not 0:14:03.000 --> 0:14:06.400 finding good ways to use it, which then turns into 0:14:06.480 --> 0:14:09.680 a perception that schools are wasting money, even though no 0:14:09.760 --> 0:14:12.720 one wanted to waste money. People wanted to make the 0:14:12.760 --> 0:14:15.960 computers be a part of the educational system. It's just 0:14:16.000 --> 0:14:18.120 that we didn't have all the pieces in place to 0:14:18.240 --> 0:14:21.200 make that a reality. You know, teachers didn't have the training, 0:14:21.280 --> 0:14:25.880 the software wasn't fully there yet. So it wasn't one 0:14:26.160 --> 0:14:31.080 single person or institution's fault. It was a collection of 0:14:31.120 --> 0:14:35.960 issues that ultimately made it a painful process. Now, the 0:14:36.040 --> 0:14:39.720 Atrium story also makes me think of a totally unrelated 0:14:39.800 --> 0:14:42.200 one of the Apple Newton, which I talked about a 0:14:42.200 --> 0:14:45.520 little bit in a recent episode. The Newton is the 0:14:45.520 --> 0:14:48.800 device that led to the coining of the term personal 0:14:48.920 --> 0:14:52.560 digital assistant or p d A. Now, granted, we don't 0:14:52.600 --> 0:14:57.480 really talk about the Newton anymore because or even PDAs anymore, 0:14:57.480 --> 0:15:00.880 because smartphones have emerged to take that spot. Right, p 0:15:01.000 --> 0:15:04.760 d a's aren't needed. Smartphones do pretty much everything the 0:15:04.800 --> 0:15:08.800 PDAs used to do. But before we had smartphones, the 0:15:08.920 --> 0:15:10.960 p d A was a high tech way to manage 0:15:11.040 --> 0:15:15.080 calendar appointments, to take notes, to build out a contact list, 0:15:15.160 --> 0:15:18.240 and you know, other business e business type of things. 0:15:18.800 --> 0:15:23.280 The Newton was one that really captured a lot of 0:15:23.280 --> 0:15:27.840 attention when it was being promoted, and its most anticipated feature, 0:15:27.880 --> 0:15:31.840 I think, was that it would be able to interpret handwriting. 0:15:31.960 --> 0:15:34.600 So you could use a stylus and you could write 0:15:34.600 --> 0:15:37.680 on the Newtons screen and the Newton would detect your 0:15:37.680 --> 0:15:41.160 handwriting and interpret it and convert the script you're writing 0:15:41.440 --> 0:15:44.720 into text, which would mean you could just jot down 0:15:44.760 --> 0:15:47.080 notes and the Newton would build out a text file 0:15:47.200 --> 0:15:52.239 for you. There was one teeny tiny problem. The handwriting 0:15:52.280 --> 0:15:57.280 recognition technology was completely unreliable. There were numerous reports of 0:15:57.280 --> 0:16:00.760 people having issues with the Newton's ability to detect or 0:16:00.880 --> 0:16:05.200 understand their handwriting, and what had been a huge selling 0:16:05.240 --> 0:16:09.240 point for the device morphed into more of a punchline, 0:16:09.480 --> 0:16:12.720 and it really ended up hurting the Newtons sales, even 0:16:12.760 --> 0:16:16.760 after Apple attempted to fix the issues. Now a couple 0:16:16.760 --> 0:16:19.760 of decades later, we have devices that can do what 0:16:19.800 --> 0:16:23.240 the Newton was trying to do more reliably, or we 0:16:23.360 --> 0:16:27.560 have devices that use alternative approaches to handwriting recognition, you know, 0:16:27.640 --> 0:16:31.080 like swipe keyboards to make it really easy to take notes, 0:16:31.320 --> 0:16:34.440 or you can even skip the physical note taking entirely 0:16:35.040 --> 0:16:38.840 and use a voice to text app to dictate notes 0:16:39.000 --> 0:16:43.360 directly into text. The problem with the Newton wasn't the 0:16:43.480 --> 0:16:48.160 idea necessarily, but rather that the ability to execute that 0:16:48.280 --> 0:16:52.880 idea wasn't fully mature when the product launched. Moving on 0:16:53.000 --> 0:16:55.960 to another product that failed to find a place in 0:16:56.000 --> 0:16:59.600 the market, let's talk about the Uh Yeah, Oh you 0:17:00.240 --> 0:17:04.359 y A. This project, which originated back in two thousand twelve, 0:17:04.680 --> 0:17:08.040 aimed to bring a video game console device that would 0:17:08.119 --> 0:17:12.160 run on the Android operating system, you know, the OS 0:17:12.280 --> 0:17:16.840 that runs on Android phones. The company's Kickstarter was one 0:17:16.840 --> 0:17:20.200 of the most successful of all time. They raised more 0:17:20.240 --> 0:17:24.760 than eight million dollars on Kickstarter, and unlike another entry 0:17:24.840 --> 0:17:28.280 that I'll get to on this list, the Yeah was 0:17:28.359 --> 0:17:33.359 actually a real thing. Backers started receiving their consoles and 0:17:33.400 --> 0:17:36.800 two thousand thirteen, and the console went on sale to 0:17:36.880 --> 0:17:40.399 the general public not long after that. And it worked. 0:17:40.560 --> 0:17:43.240 You could download games to the console, you could play 0:17:43.240 --> 0:17:47.200 those games on a television. It was a lower price console, 0:17:47.280 --> 0:17:51.320 too much lower than the competition. It was at dollars retail, 0:17:51.800 --> 0:17:55.480 but despite the initial interest from backers, it failed to 0:17:55.520 --> 0:18:00.600 catch on with a wider gaming audience and sales were blackluster. 0:18:01.320 --> 0:18:03.879 The company tried to stay afloat, but it was clear 0:18:04.000 --> 0:18:06.760 that the Uyah was going to be a disappointment and 0:18:06.800 --> 0:18:09.280 there wasn't enough money to fund the development of a 0:18:09.320 --> 0:18:12.600 successor that would keep up with future versions of the 0:18:12.680 --> 0:18:15.760 Android operating system. Because, of course, the danger is if 0:18:15.760 --> 0:18:18.960 you build out physical hardware that runs a specific operating 0:18:19.000 --> 0:18:22.520 system and the operating system gets more advanced, the hardware 0:18:22.560 --> 0:18:28.240 may not support the later versions. In Razor acquired Uyah's 0:18:28.280 --> 0:18:32.040 software assets for an undisclosed amount of money, and developers 0:18:32.240 --> 0:18:35.239 on Uya moved over to Razor. Not long after that, 0:18:35.720 --> 0:18:39.000 Razor announced the discontinuation of the console, which wasn't a 0:18:39.000 --> 0:18:43.439 big surprise. The company did commit to supporting the existing 0:18:43.480 --> 0:18:46.399 consoles that were on the market for the time being, 0:18:46.760 --> 0:18:49.520 but in twenty nineteen that support finally came to an 0:18:49.560 --> 0:18:53.440 end when Razors shut down all of Uyah services, including 0:18:53.440 --> 0:18:56.080 the app store. Many of the apps for Uyah would 0:18:56.080 --> 0:19:00.440 stop working as a result, effectively killing the consoles off completely. 0:19:00.840 --> 0:19:03.640 I think with Uya, the reason for this company's failure 0:19:03.760 --> 0:19:05.879 is largely due to a lack of interest in the 0:19:05.920 --> 0:19:09.520 general gaming market. The tech worked, it did what the 0:19:09.520 --> 0:19:12.280 company set out to do, It just didn't find a 0:19:12.400 --> 0:19:15.080 home in the marketplace, and ultimately that led to the 0:19:15.119 --> 0:19:18.880 demise of the company. When we come back, I'll cover 0:19:19.040 --> 0:19:22.280 some more failures and the lessons that we've learned from them. 0:19:22.320 --> 0:19:33.360 But first let's take a quick break. Okay. One business 0:19:33.440 --> 0:19:38.080 that I have done episodes on was movie Pass, a 0:19:38.080 --> 0:19:42.160 company that had some major ups and downs and appeared 0:19:42.200 --> 0:19:46.000 to be quote unquote dead more than once. The company's 0:19:46.040 --> 0:19:50.320 business was about offering up a subscription based service in 0:19:50.359 --> 0:19:54.280 which for a monthly fee, a user could go to 0:19:54.480 --> 0:19:57.800 the movie theaters and see a certain number of movies 0:19:57.840 --> 0:20:00.240 per month. The number of films you could see per 0:20:00.320 --> 0:20:03.960 month changed throughout the history of the service. At one 0:20:04.000 --> 0:20:07.600 point it was three films a month, and another point 0:20:07.680 --> 0:20:09.920 it was you can see a film every single day 0:20:09.920 --> 0:20:12.320 of the month. To really get a sense of how 0:20:12.400 --> 0:20:15.680 crazy the story of movie Passes, you should go find 0:20:15.720 --> 0:20:19.080 the episodes of tech stuff I did about them. Movie 0:20:19.119 --> 0:20:22.720 theater chains at large resisted movie Pass, and they made 0:20:22.760 --> 0:20:25.680 it really hard for movie Pass to actually put its 0:20:25.800 --> 0:20:30.280 service into reliable operation. Movie Pass was trying to build 0:20:30.280 --> 0:20:32.879 out a new approach to going to the movies, and 0:20:32.920 --> 0:20:38.400 to capitalize on that approach by gathering data about moviegoers habits, 0:20:38.720 --> 0:20:43.160 which in turn could become really valuable information for various advertisers. 0:20:43.600 --> 0:20:46.600 The revenue side of the business seemed, at least on 0:20:46.640 --> 0:20:49.760 the surface, to make sense, but the opposition of movie 0:20:49.800 --> 0:20:53.640 theater chains, which were already struggling in many cases, meant 0:20:53.680 --> 0:20:56.600 that there was a huge hurdle to get over. Movie 0:20:56.600 --> 0:20:59.920 Pass never quite managed to do that. Perhaps at the 0:21:00.040 --> 0:21:03.640 company had instead become a software company that could develop 0:21:03.720 --> 0:21:07.639 products for the movie chains themselves, such as developing apps 0:21:07.640 --> 0:21:10.080 that a movie chain like AMC could use to offer 0:21:10.160 --> 0:21:15.119 up to its own subscription service. That might have worked, 0:21:15.720 --> 0:21:19.439 but we just didn't see that happen. The cost of 0:21:19.520 --> 0:21:23.320 operation was great enough to necessitate a shutdown. In two 0:21:23.320 --> 0:21:25.720 thousand eighteen, the company just shut off for like a 0:21:25.920 --> 0:21:30.160 day while they tried to figure out more financing, and 0:21:30.440 --> 0:21:33.960 it continued to limp along for another year, but in 0:21:34.080 --> 0:21:38.120 late twenty nineteen, movie Pass shut down its ticketing service. 0:21:38.400 --> 0:21:41.720 This was after numerous changes and how the service was 0:21:41.800 --> 0:21:45.639 being operated, which was a source of constant frustration for 0:21:45.800 --> 0:21:50.320 movie Pass customers, and then in early twenty the parent 0:21:50.400 --> 0:21:57.440 company that owned movie Pass itself went bankrupt Sad Trombone Today, 0:21:57.560 --> 0:22:00.280 after we have had more than six months of dealing 0:22:00.280 --> 0:22:03.159 with COVID nineteen in the United States, I think it's 0:22:03.160 --> 0:22:06.119 pretty safe to say that movie Pass would not have 0:22:06.240 --> 0:22:09.920 survived much into twenty twenty. Even if there hadn't been 0:22:09.960 --> 0:22:13.879 so many problems towards the end of twenty nine, maybe 0:22:13.880 --> 0:22:17.080 movie theaters would have been eager to strike deals with 0:22:17.200 --> 0:22:20.119 movie Pass in the wake of COVID, hoping to you know, 0:22:20.160 --> 0:22:23.159 make up some cash with concession sales and stuff. But 0:22:23.280 --> 0:22:27.200 the drastic drop in theater attendance would likely have spelled 0:22:27.440 --> 0:22:30.080 doom for a movie Pass, even if it had made 0:22:30.119 --> 0:22:33.760 it further into the year. That being said, it's not 0:22:33.800 --> 0:22:36.719 like you can anticipate a once in a century pandemic, 0:22:36.920 --> 0:22:39.840 So I wouldn't hold movie Pass at fault if that 0:22:39.960 --> 0:22:42.600 had been the case. But it's a moot point because 0:22:42.600 --> 0:22:45.160 the company had sunk well before we really had an 0:22:45.160 --> 0:22:48.920 inkling about the scope of what was to come. The 0:22:48.960 --> 0:22:51.600 next company I want to talk about is one that 0:22:51.680 --> 0:22:54.439 I actually have kind of a personal history with, and 0:22:54.480 --> 0:22:58.320 it's a personal history I really regret, but I feel 0:22:58.320 --> 0:23:01.840 it's important to be honest and front with you guys. Also, 0:23:02.160 --> 0:23:04.959 it could serve as a warning for some of you 0:23:05.040 --> 0:23:07.800 to help avoid the same mistakes that I have made. 0:23:08.160 --> 0:23:13.080 So it's time to talk about yik Yak. Yik Yak 0:23:13.560 --> 0:23:19.400 was a regionalized like a localized and anonymized messaging service. 0:23:19.480 --> 0:23:23.359 So essentially, the idea was that users could post messages 0:23:23.480 --> 0:23:27.160 to a localized forum to talk about what's going on 0:23:27.359 --> 0:23:32.520 in the area, with particular focus on targeting college campuses. 0:23:32.760 --> 0:23:34.520 So in other words, the idea was that it could 0:23:34.560 --> 0:23:37.639 serve up as sort of the rumor mill for a 0:23:37.760 --> 0:23:40.480 region like a college campus, users would be able to 0:23:40.560 --> 0:23:43.600 see the posts that were relevant to whatever area they 0:23:43.600 --> 0:23:46.439 were in at the time, like what's going on. But 0:23:46.640 --> 0:23:49.280 the fact that it was anonymous meant that there was 0:23:49.359 --> 0:23:53.160 also a prime opportunity for people to abuse the service 0:23:53.320 --> 0:23:57.679 and other people. There were numerous issues with a person 0:23:57.880 --> 0:24:01.520 being called out on yik yak by anonymous accusers, right Like, 0:24:01.960 --> 0:24:04.040 you could get a bunch of people saying so and 0:24:04.119 --> 0:24:09.520 so is, you know, cheating on their significant other, or 0:24:10.000 --> 0:24:13.359 so and so is cheating on tests. I mean this 0:24:13.560 --> 0:24:15.560 was a college campus after all, or just so and 0:24:15.600 --> 0:24:19.199 so is a total scumbag. Reputations could be ruined and 0:24:19.240 --> 0:24:24.080 people could be harassed, and vulnerable populations could be ostracized 0:24:24.119 --> 0:24:28.640 and hassled, or even worse, it could get seriously ugly. Now, 0:24:28.760 --> 0:24:32.840 let's talk about my personal connection to this. That happened 0:24:32.960 --> 0:24:36.879 at a south By Southwest several years ago. I was 0:24:36.920 --> 0:24:41.840 put in charge of moderating a discussion with the founders 0:24:42.040 --> 0:24:45.480 of yik yak, and all of my questions had to 0:24:45.520 --> 0:24:49.560 be vetted beforehand. I couldn't just ask them anything I 0:24:49.600 --> 0:24:52.639 wasn't supposed to anyway, so I had to work with 0:24:52.680 --> 0:24:55.679 them to create a list of questions, and I was 0:24:55.760 --> 0:24:58.879 told by others that I should be really fair and 0:24:58.920 --> 0:25:02.720 really go after them right, like really nail them down 0:25:02.760 --> 0:25:05.240 for answers. But at the same time I was getting 0:25:05.280 --> 0:25:07.480 a lot of indicators from others that were saying that, no, 0:25:07.880 --> 0:25:10.720 you really don't want to do that. So I was 0:25:10.760 --> 0:25:13.439 in a bad position. There was really no way for 0:25:13.480 --> 0:25:16.159