Leaving the startup you spent months, if not years, of your life building is never easy. But it's common: Twenty-five percent of small businesses fail within the first year, and the odds only worsen from there.
As CarWoo co-founder and chief executive Tommy McClung said earlier this year, "A lot of people will say, 'Oh, it was just one thing' [that led us to shut down]." But deep down he knew "it was a series of events in which we realized it was going to be [too] expensive" to continue working.
The idea that there's never one reason for failure is what makes browsing Closed Club, a site that lists startups that have closed their doors, so illuminating. Click on Hailo (US), the taxi app that matches drivers with passengers--and up until yesterday was operating in the U.S. and Canada--and you'll receive a full summary of the app, along with where it launched and its funding. Most of all, you'll learn just why it failed:
"The reason for the closure was that competitors Uber and Lyft were dropping prices and using a highly competitive pricing strategy in order to out compete each other out of the market, this lasted until Hailo could no longer afford to sustain healthy profit margins, therefore the service was closed down."
Closed Club was launched last week by 27-year-old Andrew Condurache, an Aussie entrepreneur in San Francisco, and a few friends. The idea of the site, they write, is that "the best lessons are learned the hard way," and it's a place where entrepreneurs can open up about their failures, share what they've learned, and ideally help others.
"It's kind of more like Product Hunt," Condurache told Forbes' Ryan Mac, comparing his site to the venture where users share and vote on new tech startups. "This is more community-driven with sharing. It's not about telling hidden secrets."
Like Wikipedia, the entries provide references, or links to relevant stories. At the bottom, there's a list of key factors explaining what led to the startup's demise. (In Hailo's case, this involved an ineffective marketing strategy and technical problems related to payment processing.)
So far, only a few members can add entries to Closed Club immediately, although the platform is open to anyone to write and comment so long as they log in with their Twitter account. The community scrutinizes entries for relevance (and presumably accuracy), and visitors can vote on products to show what's popular, prompting the community to select founders for interviews. When the product page is updated with their quotes, it gets reposted to the main page.
Philip Kaplan of F*cked Company, a similar site that chronicled failing and troubled startups in the dot-com era, recently took to Closed Club to reflect on his work (the site closed down in 2007): "Was fun while it lasted but today I have a better appreciation for entrepreneurs and their struggles."