Is StumbleUpon Crashing and Burning?

stumbleupon crashing

The StumbleUpon concept was great, and it still is. But somewhere along the way something went terribly wrong. Once the darling of the social media world, the company is now struggling to stay alive as it is finding it difficult to get funding and keep its employees.

According to a report from VentureBeat, the content discovery company reducing its workforce from under 100 to around 30.

Apparently, this was the end result of not being able to secure more venture capital funding. The lucky few that remain are staff in engineering and sales roles.

Tim Bajarin, principal analyst at Creative Strategies told the San Francisco Chronicle:

“The tragedy is, it’s a great site. They’re curating content based on my interests and delivering it in a seamless, entertaining way. But having said that, I’ve never been clear on how they were going to make money … It appears that they couldn’t convince investors that there was long-term earning potential.”

So how did the company find itself in this predicament?

StumbleUpon was founded in 2002 by Garrett Camp, Geoff Smith, Justin LaFrance and Eric Boyd. With its $1.2 million first round of funding, the company moved from Canada to Silicon Valley, where it was purchased by eBay for $75 million in 2007. Two years later, Garrett Camp, one of the founders, and other investors bought the company back and assumed his former position as CEO.

During the initial phase of the buyback, the company received new rounds of funding totaling $17 million and all was going well.

Things started taking a step in the wrong direction when it redesigned its format in 2011 and Camp left the company in 2012.

In 2013, when the company laid off 30 employees, interim and now CEO Mark Bartels, told TechCrunch:

“This is on a one-time event. This is not going to be a slow-drip effect into a series of layoffs and cost-cutting moves.”

Unfortunately, for Bartels, that hasn’t proven to be true. However, the company still enjoys a great following, and big brands use the platform to reach their audiences, including Levis, Nike, HBO, Comedy Central, Red Bull, and others.

With millions of users and page referrals every month, the company is able to generate revenue from advertising. One of the ways it does this is through StumbleUpon Paid Discovery.

StumbleUpon distinguished itself from other so-called bookmarking sites by having users sign up, list their tastes and interests and then discover and rate content based on those interests.

The site was especially valued as a social marketing tool because of the amount of referrals traffic they could send a site. But in recent years StumbleUpon seems to have faced some of the same challenges with which other social media sites like Twitter seem also to struggle.

The company’s main problem may be a lack of success in growing its community. It reported 25 million users in 2012 and that’s the last year it has shared those numbers.

If you have a small business and you have been using StumbleUpon, you are probably wondering what the current restructuring means for the long term outlook of the company.

So far there isn’t any news on what the company plans to do, so stay tuned.

But if you are using StumbleUpon for a large portion of your campaigns, it may be wise to weigh your options and consider what other channels may be available.

Image: StumbleUpon

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Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.

11 Reactions
  1. Cendrine Marrouat

    StumbleUpon was a fantastic concept at the beginning. I remember when I joined, back in 2005 or 2006. It was far less confusing than it is now. Their big redesign a couple of years ago ended it all to me.

    SU has always been a hit or a miss. That’s probably why it rarely made the news anymore…

    • Hi Cendrine,
      You are not alone in disagreeing with the redesign.
      I think the company lost its identity when it tried to be all things to all people, when what they had was great: and still, at least conceptually.
      Maybe Camp can come back and implement the little tweaks it needs.

  2. I remembered how much SU influences how a website ranks. Too bad, it was overused by people until such time when the links are devalued. I guess that is the reason why it is crashing.

    • Hi Aira,
      It still has a lot of influence, that is why big brands use it. But don’t give up on it, because the right person can turn it around.

  3. They were a modern company with young talents and good ideas.
    Since they have a new director from Salesforce the whole company was being flushed to the toilet.
    Lucky who escaped the whirlpool.

    • Hi Dave,
      It just goes to show, even if you have a great product, not having the right talent can send the company in the dreaded whirlpool.

  4. Used to love StumbleUpon, and would again if it were the 2006/2007 version. I would have even paid to sign up back then. They had a very successful model and then started making huge changes. This in itself can be a good thing, but it clearly wasn’t in their case and they kept at it. By the time the major redesign went through, the top users had been long dormant. I was always under the impression they listened to their user base as little as possible. I watched the user forums and they had a dismissive attitude about certain things users were pointing out, no matter how small. When the help forums moved offsite they began taking complaints seriously. This was around 2008, but by then the damage had been done.

  5. I do remember reaching a point where it felt like Stumbleupon had become so driven by spammers that it seemed almost funny. Various people marketing their sites to other marketers. Now I find the sharing mechanism useless. Somehow they went from overly useful to useless in one fell swoop. I no longer think of it as a means of promoting my blog. It’s just an amusement.

  6. Stumble upon use to be one of the best social networking website back in days. The changes happening in internet marketing world is making it difficult for these websites to survive in market.

  7. Hi Frank,
    I don’t know if you read the thread from the people that commented, but everyone is in agreement that Stumbleupon was a great idea, including myself. I hope the company can make itself relevant again.

  8. They probably would have done a lot better if they had have created a SFW/NSFW Mode. I know a lot of people stopped using it because of that, and I’m about to be one of them.
    How could they never have done so? How was it not the next logical step after asking if a new Like was SFW or NSFW? They are pretty stupid to not do so, and very irresponsible.

    And there are NO good alternatives. Pinterest comes closest, but that’s not really the same thing.