After a tumultuous history including lost data, upset users, and seemly endless name changes, TheLinkup (aka MediaMax) has shut its doors. Users of the storage site will be unable to access their files after August 8th.
The company has a long (and extremely confusing) history. In our last post on the site, Charlie Jackson, one of the company’s investors, left a comment explaining the following (we’ve added links to relevant events):
The original entity was Streamload. The product name was changed to MediaMax and it was still the same service. Steve Iverson, the founder, was still CEO. Patrick Harr was brought in to be CEO and to help raise money, Iverson was moved to being CTO.
When a C round investor was found, Mission Ventures, this venture firm wanted nothing to do with the consumer service of MediaMax, only wanted to be in the back-end business. The C investor allowed a spin-out to be done, and the new company was allowed to take the name MediaMax and the consumer customers, but no software, no servers, no data. The front-end software was licensed to the spin-out, but for a limited time. Steve Iverson took over this company, while the existing company, with all the servers and data, was re-named Nirvanix. Virtually all the employees stayed with Nirvanix. Nirvanix is trying to compete with Amazon’s S-3 service.
Around the time this spin-out was happening, Nirvanix engineers screwed up royally and accidentally deleted half the files. Most were recovered over time, but it took months, and there was never 100% recovery (I never got some of files back).
MediaMax wrote new front-end software and recently changed its name to TheLinkup. Nirvanix wrote new back-end software, but had trouble migrating all the MediaMax files from its old software to its new software.
MediaMax/TheLinkup coudn’t make all its customers’ files available, ran out of money, and not having a viable business anymore, had to shut down (the C investors never put any money into the spin-out).
The company’s latest venture, TheLinkup, was supposed to be a social network centered around storage, but it barely managed to get off the ground. This could be considered a blessing in disguise, as a storage-centric social network would have probably had a difficult time building a substantial userbase, and may have simply resulted in more lost time and money.
Virgin Mobile purchased Helio today for $39 million in equity. Helio is a small MVNO that made its name by selling powerful and high-end telephones aimed at technophiles and, thanks to an investment by South Korea’s SK Telecom, Korean-Americans. As part of the deal, Virgin Mobile is also receiving $50 million to pay down Helio’s debt (half from SK Telecom, and half from its parent company Virgin Group), as well as an additional revolving credit facility of $60 million. Just last September, SK Telecom tried to save Helio by pouring an extra $270 million into it, to no avail.
The Helio brand will be subsumed by Virgin Mobile. All of the Helio stores will close except, it’s reported, the flagship store in New York, and there is a full restructuring of the company going on right now. Thus, after much struggling, Helio enters the deadpool.
Helio had 170,000 subscribers while Virgin Mobile currently has about 5 million. The deal will also give Virgin access to a number of technologies owned by Helio including customer management and cellphone deck applications.
Helio also has received investments from Earthlink, but when Earthlink pulled out last year and charismatic CEO Sky Dayton stepped down it was clear something was afoot.
Peter Ha at CrunchGear wrote a full analysis of the merger:
So what exactly does the merger mean for customers of Helio who have grown to love the hardware and features that Helio is best known for? Well, Virgin Mobile will be keeping all of those goodies in place. If you’ve seen any VM devices, you know they stink. VM is relatively boring and absorbing the technology Helio is best known for will certainly boost the MVNO’s status and appeal to a broader audience. That means future VM devices will include apps such as Google Maps with GPS, YouTube and MySpace… all of which Helio brought to the table before other carriers.
What about the Ocean 2? If you haven’t already figured it out by now, the Ocean 2 has been delayed over the last few months because of merger talks. It’s unclear when the device will actually launch, but it hasn’t been scrapped.
While I hate to see Helio dissolve, this is great for both brands. VM knows how to make money while Helio knows how to create technology that works and is appealing.
With Helio gone Boost Mobile in the only targeted MVNO running in the US right now.
DocSyncer, the service that allowed users to sync their desktop documents with Google Docs, has closed its doors.
At first glance, the move seems surprising. DocSyncer had established a strong user base, having accumulated over 6 million documents since its launch last October. A mere six months ago we reported that the company was “going gangbusters”, and was the web’s largest contributor to Google Docs.
So what happened? DocSyncer CEO Cliff Shaw says that the company simply couldn’t find a viable business model. The team decided that despite DocSyncer’s steady growth, it wasn’t going anywhere fast (the company also faced the looming threat of Google creating its own syncing service). Rather than dwindle more money and time on the service, Shaw and company have decided to move on. The team has begun work on a new photo site called picstreem, and are currently seeking funding.
Last December Shaw’s photo backup company ProtectMyPhotos shut down after losing out to competitors like Mozy and Carbonite. DocSyncer was that product’s successor, leveraging much of ProtectMyPhotos’s technology.
Microsoft Live Expo, their experiment with classified listings that launched in early 2006, will be shut down on July 31, says a notice posted on the site. New listings have already been suspended.
This comes as Craigslist solidifies its position as the top free listings service. Other services like Kijiji (owned by eBay) and Oodle (which recently partnered with Walmart) continue to grow. Recently Kijiji has made waves about their impressive growth rate. And other classified listing startups continue to get funded.
There’s just no room for Microsoft in the classified listings space, it seems. It joins the deadpool.
A screen shot of what it looked like in the good days is below.
Looks like you’re going to have to earn your phat lootz the hard way. Sparter, an online marketplace for virtual game currencies that launched last year, has effectively shut down. The company has issued a notification stating that no further purchases can be carried out, though transactions currently in progress will be fulfilled.
The site, which is backed by Bessemer Venture Partners, allowed gamers to sell gold to other players for real-world money in games including World of Warcraft, Eve, and Everquest. This kind of trading has been commonplace on the internet since the emergence of major massively multiplayer games, but it has always been controversial - eBay banned it in early 2007. Such transactions are against the Terms of Service for nearly every online game, and many players believe that they are dishonest and can ruin a game’s economy.
So what led to the shutdown? The site almost certainly folded to pressure from game developers, though it may have also had a hard time gaining traction in a space with countless vendors of virtual gold. The site does still leave some wiggle room for its rebirth in the future, explaining:
“Going forward, we believe the best course for our business is to focus solely on providing marketplaces with the full support of game developers and publishers. ”
For now we’ll be adding Sparter to the Deadpool. Gamers still looking to take the easy way out can head over to competitors like IGE.
Akimbo, the online video provider that never seemed to establish an identity, has closed its doors. The sudden move is surprising, given that the site raised $4 million in funding less than three months ago.
Akimbo launched in 2002 as a hardware-based VOD company. Using a hard-drive equipped settop box, users could download a variety of shows from 200 content partners. In October 2005 the company shifted directions and introduced Akimbo for Media Center, which did away with the hardware and allowed users to use Akimbo through a plugin on compatible computers. Finally, last February, the company reinvented itself once more, and became a whitelabel video service provider.
Given Akimbo’s multiple personalities, it’s not surprising that it has run into trouble - but why give up after only three months in a new space? The company has seen management issues (the former CEO left, and disagreements apparently arose after his replacement with Thomas Frank). But that still doesn’t explain why the company would give the whitelabel space such a half-hearted effort.
According to VentureBeat, the entire staff has been laid off, save for three members who are staying on to facilitate the company’s shutdown. The company had raised $56 million over multiple rounds of funding, with investors including AT&T and Cisco. Akimbo has been added to the Deadpool.
After unsuccessfully trying to sell his startup Sxip Identity to Google or Microsoft, CEO Dick Hardt is now facing a lawsuit over the insolvency of his startup. Hardt is perhaps best known for his amusing slide show explaining his company’s Identity 2.0 system. It typically started with the slide at right asking, “Who is the Dick on your site?” Investors are now asking a similar question.
Hardt is not making funny slide presentations these days. According to a complaint from investors in Vancouver, where Sxip Identity is based, Hardt raised $370,000 as a bridge loan until he could sell the company. According to TechVibes, which covered this last week:
When Hardt’s attempts to sell Sxip Identity failed, he told the plaintiffs that Sxip Identity was insolvent and that their notes has [sic] little or no value. This is where things get messy. The plaintiffs allege that Hardt failed to disclose that there were two separate Sxip entities (Sxip Identity and Sxip Network - he is CEO and President of both) and that only Sxip Identity would be a party to the notes.
Sxip Identity is indeed insolvent with a March 2008 balance sheet indicating that they owed Sxip Networks $4.7 Million and Hardt personally $275K. Sxip Identity’s total assets at the time were just under $1 Million.
That’s a pretty slick move, Dick.
Identity is still a problem that needs to be solved. Unfortunately, Sxip won’t be solving it.
Just because someone can give a good pitch, does not mean they can build a real company. Below is Hardt giving his slide show pitch at eTech in 2006.
Update: After I put up this post, I spoke with Dick Hardt. His biggest issue seemed to be with my opinion that he failed to build a a real company. Fair enough. I suggested that he e-mail me a response, which is reproduced below:
Erick
Thanks for the followup call and the offer to post a response on the article. There are some corrections contained below on facts you state, as well as additional information that I think upon examination, may lead you to change your opinion. As for responding to the lawsuit, I have attached Sxip’s statement of defense so that your readers can see both sides of the story.
– Dick
“Hardt is not making funny slide presentations these days.”
Incorrect. In the past month I gave a keynote presentations at the MySQL conference, an identity conference in New Zealand and a conference on identity management trends in Hamburg. I think the Identity 2.0 message is an important one to given. I also think my presentations are still funny. The deck is now over 1000 slides and people are laughing at the appropriate spots.
“Identity is still a problem that needs to be solved. Unfortunately, Sxip won’t be solving it.”
This is your opinion, but I don’t think it makes sense when you look at the facts. Sxip is working on solving the Identity 2.0 problem. We merged our efforts into the OpenID community a couple years ago, I sit on the board of the OpenID Foundation and am active in the community. OpenID looks to be a real contender for solving the Identity problem … at least that is what I read on TechCrunch.
Additionally, our Firefox add-on, Sxipper (available at http://sxipper.com) supports OpenID and helps users manage their passwords and fill in forms with the click of a button. Sxipper continues to be actively maintained and the user base is growing 5% per week. As the product matures, perhaps you will give it a review?
“Just because someone can give a good pitch, does not mean they can build a real company.”
From comment 33: “No, not too harsh. The company is bankrupt and on top of that there are allegations of self-dealing. If it had been a real business, Google or MSFT would have been more interested.”
The company is not bankrupt.
I have successfully built and sold companies (ActiveState the best known). We had a real business with Sxip Access with solid partnerships with SFDC and Google. We sold that business to Ping Identity. Google and MSFT look at lots of real businesses and don’t do an acquisition.
I stand corrected on Hardt’s presentation habits. As for Identity 2.0, Sxip and Hardt may be making important contributions to OpenID (I don’t dispute that), but laying claim to OpenID’s achievements for Sxip is a bit of a stretch. As for my comment referring to the company as bankrupt, that was a mistake due to my misunderstanding one of Hardt’s comments below (No. 26) referring to a “reorganization” of the company and also the fact that I was responding quickly from my Blackberry on a plane ready to take off. I should have said insolvent. His statement of defense to the lawsuit is embedded below the video.
This post was written by guest contributor Paul Bragiel, founder of Meetro, a location-aware instant messaging platform that was DeadPooled last month. Bragiel is also the founder hosted forum solution Lefora. See our coverage of these two companies here, along with our first post on Meetro in August 2005. Also see our post titled What To Do With Failed Startup IP?.
In the spirit of openness, I write this post on what we did wrong at Meetro - a post mortem of sorts. You don’t see this often enough in the startup world even though the majority of startups go belly-up. Hell, there are probably a few today that will go away with a whimper. So much knowledge is lost. If you’ve had similar experiences, I encourage you to share them over at Lefora.
To those of you not familiar with Meetro, we were one of the first location-based social networks. We figured out where you were physically and then we would tell you else was around you in real-time. You would then be able to instant message with them, check out their profiles, and hopefully meet up. Other functionality included telling you about restaurants close by, media created nearby, and various local information that pertained to your location. We also supported all your various instant messaging protocols (AIM, MSN, Yahoo) and a slew of other social features.
Even with a robust product we simply couldn’t capture enough market share. So here are the major problems we had that, in the end, we couldn’t overcome. There were, of course, mini fires and random things but every startup goes through those. I have a feeling some of the other location-based startups out there right now are experiencing the same things.
Most importantly, there was a “location problem”. It’s really hard to grow a product that’s 100% focused on where you physically are. Tons of companies have tried this before and most of them have died. We, of course, were cocky and had to give it a try. There was just something so sexy about the idea that you could load up a piece of software and it would tell you about someone nearby who was interesting to you. Someone will crack this and make billions of dollars on it. I can only hope to be involved in some shape or form, since it’s an itch that hasn’t gone away for me.
Crowdsourcing sounds good in theory—pull together a bunch of smart, motivated individuals from across the Web to create a new product or business—but in practice it is not so easy to pull off. One of the first major casualties of the crowdsourcing movement looks like it will be Cambrian House, the Calgary startup that tries to organize the crowd around creating new ideas for Websites and software products. After unsuccessfully trying to raise a new round of capital, it is our understanding that the startup has negotiated a fire sale of its intellectual property, assets, Website (and whatever community remains after the sale) to Spencer Trask Ventures, a New York venture firm inspired by the financier who originally backed Thomas Edison.
The deal is structured as an asset purchase, after devolving through various stages from initial talk of a new investment to a joint venture to a buyout. The more Spencer Trask looked, the less it offered. Spencer Trask is basically buying the Cambrian House platform and its community for a fraction of the $7.75 million that investors have already put into the company. We cannot yet confirm an exact figure, but one source speculates that it could be less than $1 million. Spencer Trask plans on taking the assets and rolling it into VenCorps, a Cambrian House project in development that wants to apply the crowdsourcing concept to venture capital. Sean Wise, a Canadian “venture consultant,” is heading up VenCorps and (presumably) whatever is left of Cambrian House. A Cambrian House spokesperson (VP of Communications Jasmine Antonick) contacted confirms that the sale has gone through and that the site will “dissolve” in three months. We are placing Cambrian House in the deadpool.
So far, 6935 ideas have been created on the Cambrian House site. Some of them must be worth pursuing, no? Perhaps. In addition to VenCorps, Cambrian House itself will be keeping some of its more successful projects alive, including desktop fighter game Gwabs, independent-film funding service FilmRiot, Digg-like charity Greedy or Needy, mobile app testing site Mob4Hire, and virtual gift-wrapping app Prezzle. It will also retain rights to its source code and try to license it to others through an application called Knottle and a platform called Chaordix, both yet to be released. Many of these ideas didn’t gain traction until they were invested in and championed by Cambrian House itself, which again makes you wonder whether any good ideas can actually grow into full-fledged products from an unaffiliated crowd.
To be charitable, maybe Cambrian House just suffered from poor execution and Spencer Trask thinks it can do better. But crowdsourced venture capital? If the crowd cannot even make a decent Web app, the chances of its being able to allocate millions of dollars more efficiently than seasoned pros does not seem terribly great.
The imminent demise of Cambrian House is a cautionary tale for other startups, such as Kluster, CrowdSpirit,CrowdSpring, and FellowForce, trying to cut their teeth in the nascent crowdsourcing industry. They all have their own approach, and experimentation is necessary to find the right one.
The fall of Cambrian House won’t deter them from trying. For instance, Kluster takes a more structured approach by breaking down projects into manageable stages and has thought through the incentives a little differently. And CrowdSPRING, which focuses on designs for Website and marketing materials, is formally launching tomorrow after picking a winner for the $5,000 contest to design its own Website.
Some of these will survive, and some won’t. The key is attracting the right community of active contributors and structuring the rewards in such a way that makes it easy to participate. Or is crowdsourcing simply a bad idea that should be put to rest?
Update: In a comment below, Cambrian House CEO Michael Sikorsky reflects (excerpt):
Indeed, our model failed. In short: we became a destination people loved to bookmark more than they loved to actively visit (our traffic pattern was scarily VC-ish). The limiting reagent in the startup equation is not ideas, but amazing founding teams.
A key assumption for us, which proved out NOT true: given a great idea with great community support and great market test data, we would be able to find (crowdsource) a team willing to execute it OR we could execute it ourselves. We needed amazing founding teams for each of the ideas – this is where our model fell short.
What we learned: it would have been better to back great teams with horrible ideas because most of the heavy lifting kept falling back on us, or a few select community members. A vicious cycle was created leading all of us to get more and more diffuse.
Hence: the wisdom of crowds worked well in the model, but it was our participation of crowds aspect which broke down. Trying to find people willing or capable to take on the offspring (our outputs) of the CH model was hard and/or incredibly time consuming.
It is not often you get such an honest assessment of why a business failed from a CEO in the midst of its demise. Sikorsky also disputes that it was a “fire sale,” but declines to give any specifics on the price. He also notes that Cambrian House as a company will continue, even if the site will die, and still owns its intellectual property.
Update 2 (5/20/2008): The company has issued two press releases. One details the sale of assets to Spencer Trask and the other emphasizes that Cambrian House is still a going concern, albeit with a totally different strategy of selling “crowdsourcing in a box” (i.e., licensing its technology to other sites that want to make a go at crowdsourcing). And here’s a 26-minute video Sikorsky made to explain what is happening at Cambrian House titled VenCorps, TechCrunch, and a Loong Talk:
We introducedSpotplex in February 2007 as a potential Digg killer that served up popular stories by monitoring how many people read them. Somewhere along the way, it also turned into an Alexa-like analytics service. Unfortunately, neither market worked out for them and they’ve been forced to shut their doors.
The Digg-style service used JavaScript that was embedded on participating pages to track how often posts were read, and top-read posts were featured on Spotplex’s homepage. The service set itself apart from Digg by requiring no intervention on the reader’s part to promote a page. On the other hand, Spotplex only recorded hits on blogs that had embedded the Javascript snippets, which severely restricted its sources of content.
Spotplex’s JavaScript embeds were also used to offer an analytics service that was designed to contend with sites like Alexa and Compete. While the addition of this service marked a shift to a very different market, both of Spotplex’s services leveraged the same backend.
CEO Doyon Kim says that the company’s ultimate failure was due to a lack of adequate funding. The company underestimated the resources that were required to build and maintain its service, and it neglected to seek venture funding after its $450,000 seed round. This is surprising given Kim’s experience in the industry: he co-founded DialPad, which was acquired by Yahoo in 2005.
