Shocking news out of the startup world: Everything.me, a popular and highly-promising Israeli startup, has unexpectedly shut down.
Founded in 2010, the startup reportedly built an ingenious launcher for Android devices that adds contextual capabilities to mobile phones and raised over $35 million in a series of financing from high-profile investors. These investors included well-known names like Telefonica Ventures, SingTel Innov8, Horizons Ventures, Draper Fisher Jurvetson (DFJ) and Mozilla.
The developers and founders of Everything.me have confirmed the closure, saying that Everything.me was popular with more than 15 million users.
So what went wrong?
Your Startup is Nothing Without a Business Model
Basically, the founders were unable to find a suitable business model. As a result, 36 employees have lost their jobs. But they weren’t the first to go, as 20 workers were laid off earlier this year in what was the first sign that the company was in trouble.
A somewhat common concept that has gripped the tech startup world in recent years is the idea that you can build a startup without a clear plan on how you are going to monetize it. And presuming you don’t get acquired in the meantime, you eventually work out how you are going to make money from your idea after you have built up the user base.
While this model might have worked for some startups, it is not the best plan out there sine it ignores the basic reason businesses exist in the first place.
Traditionally, when you start a business or a company, you have to at least have a workable plan on how you are going to profit from it. Indeed every business takes time to establish, but a wise person would never start a business without knowing how they are going to make money out of it.
In an interaction with GeekTime, Joey Simhon, co-founder and CTO of the company, explained: “It’s a painful decision. We have built an amazing team and product, where we put into it our all and received the love of users.
“I have no doubt we’ll be hearing a lot about it from now and that they will bring their own unique way we formulated building products and technology to other companies that will be lucky to get them,” Simhon added.
According to Geektime, Everything.me still has some small amount of investor money in its coffers that will be returned.
The company’s sad end should serve a good reminder for small businesses and entrepreneurs outside the tech field as well. A good idea is not enough. You’ll need a great business model too.
Image: Small Business Trends