When Turntable.fm launched in mid-2011, the social music website was widely hailed as one of the most exciting music startups of the year. Turntable hit 140,000 users in its first month and reportedly raised as much as $7.5 million in funding at a valuation of $37.5 million.
The service, which lets users pick avatars and gather in virtual DJ rooms to spin tracks and discover music, was often described as “addictive.” After a few months, though, the addiction seemed to wear off.
Turntable’s monthly active users gradually declined from 130,000 in November 2011 to 80,000 in September, according to numbers provided to Mashableby AppData, a firm that tracks user metrics for applications connected to Facebook. In that time, Turntable’s team has continued to advance the product by pushing into mobile with apps for iPhone and Android, but this hasn’t done much to reverse the trend of declining traffic. More recently, the company’s co-founder Seth Goldstein turned his attention to a new music startup called DJZ.
Despite these setbacks, the folks at Turntable are still singing an optimistic tune. “We’ve actually been working on a lot of new stuff that is coming soon,” Billy Chasen, Turntable’s co-founder, told Mashable. Chasen wouldn’t comment on the specifics of these new features, or how they play into the long-term strategy of the company.
Shopkick was widely credited with revolutionizing the concept of check-ins with the launch of its iPhone app in 2010. Suddenly, consumers could earn rewards points at retailers just by maintaining a Shopkick account and setting foot into a store.
Two years later, the startup appears to be stronger than ever. Shopkick has partnered with 15 retailers to date, including big names like Target, Macy’s and Best Buy, and its user base has grown to 3.7 million, according to the company’s co-founder and CEO Cyriac Roeding.
For the past nine months, the team has been working on a new app, which Roeding calls “the next generation of Shopkick.” He says the app should come out very soon.
“That app will be a significant step for us because basically we took all the learnings we’ve had from two years and all the data and turned it into a re-imagined Shopkick,” Roeding told Mashable. “It will make it so that Shopkick will be awesome already before you go shopping. It will build a really cool stretch into the store and make your store experience much better once you are there.”
Airtime set a new bar for hype around a startup launch, thanks largely to the fact that it was started by Napster co-founders Sean Parker and Shawn Fanning. The video chat service launched in June with a star-studded event and raised $33 million in funding.
For all that buzz, Airtime has struggled to gain traction in the past four months. According to AppData, the service has just more than 11,000 monthly active users. To make matters worse, AllThingsD reports that Airtime’s CTO is planning to leave the company and Fanning has stepped back from his day-to-day role.
That said, the company is in its early days and still has big plans for the future. “We have a very clear vision for what we are trying to accomplish, but we’re very much in the learning process and exploring the synchronous web,” an Airtime spokesperson told Mashable. Going forward, the spokesperson said users can expect to see “an evolution towards that big vision Sean has always been talking about — to a vibrant, live, synchronous community.” Most likely, this means a greater emphasis on mobile and cross platform features.
Color, like Airtime, received plenty of buzz early on in part because it was founded by two well-known entrepreneurs: Bill Nguyen, who co-founded Lala, an online music service acquired by Apple, and Peter Pham, former CEO of the money-saving website BillShrink. Color managed to raise a jaw-dropping $41 million in a first round of funding in early 2011. Then the app came out and things quickly went downhill.
Originally, Color released a photo-sharing app for the iPhone, but it never really caught on with users. Six months later, Color overhauled the app by focusing on sharing short videos and giving users the ability to connect with Facebook. Even then, Color struggled to gain a sizeable audience. In May 2012, the company announced a partnership with Verizon to have Color’s app pre-installed on most of the carrier’s 4G LTE-enabled Android phones. Since then, Color’s user base has increased significantly, from 50,000 monthly active users on Android in May to more than 400,000 monthly active users in September, according to AppData.
Despite this success, there has been some turbulence at Color. Nguyen, the company’s CEO, has reportedly stepped back from his role at the company. However, according to Tamara Steffens, Color’s SVP of business development, this won’t have much of an impact on the direction of the company. “The rest of the leadership is still exactly the same,” Steffens told Mashable. “From a technology perspective, if people are not aware that Bill doesn’t write code, I can state that.”
As of now, Steffens says the plan is for Color to introduce a major update to the app before the end of the year, which will feature improvements to the live video sharing features.
Highlight was the breakout app of SXSW this year; many expected it to be part of a new wave of so-called people discovery apps. Since then, the company has been working to “lay the groundwork for success,” according to Highlight’s founder Paul Davison. That has meant releasing some significant — though perhaps not sexy — updates to the app’s infrastructure, including optimizing battery use, localizing the app for several new languages and adding the ability to send group messages to people nearby.
While Highlight has certainly attracted a steady user base, the growth to date has been more gradual than explosive. According to AppData’s numbers, Highlight’s app had 70,000 monthly active users in March, the month it received all the buzz at SXSW, and rose to as much as 100,000 monthly active users in August, before declining in September to 90,000. Davison, for his part, has big visions for Highlight’s potential going forward.
“The exciting thing for us and the people who first heard about us is the potential for the technology in his space,” he told Mashable, noting that eventually he hopes to build a tool that will surface all the relevant information you’d want to know about a person nearby you’ve never met before. “We are just a tiny fraction of a percent of what we hope to build.”
Seth Priebatsch launched his company SCVNGR with a location-based gaming app of the same name when he was just a freshman at Princeton in 2008. Over time, he built up plenty of buzz for his vision of adding a game layer on top of the real world.
But it was his follow-up to that app, LevelUp, which really established Priebatsch and his company as a force to be reckoned with. LevelUp, a mobile payments network, launched in early 2011 and has since raised $21 million in funding.
To be sure, there are some pretty tough competitors in the mobile payment market, including Square and Google Wallet. LevelUp has managed to stay competitive by coming up with some unique initiatives, including eliminating the interchange fees merchants would ordinarily pay for transactions and instead earning money for bringing in customers.
“It’s gone from being an unknown player to the second largest mobile payment network in the country, behind Starbucks,” Priebatsch told Mashable. There are currently upwards of 3,800 merchants accepting LevelUp and 300,000 active users on the network. According to Priebatsch, LevelUp is now adding about 15,000 users a week, and his goal is to hit 1 million users in the next year. As for the SCVNGR app, Priebatsch says the company continues to add to it, but that LevelUp is now the team’s core focus.
Zaarly first showed off its local marketplace service for buyers and sellers at SXSW 2011; it quickly generated plenty of buzz and funding. The startup raised an initial $1 million seed round from celebrity investors like Ashton Kutcher and Demi Moore. A few months later, it raised an additional round of $14.1 million and managed to get eBay’s former CEO Meg Whitman on its board.
As it happens, Zaarly’s founder Bo Fishback told Mashable that the team only spent 60 days building the service before they decided to launch it. “We went into it first not knowing what we were doing, but we thought there was a big opportunity to launch and learn,” he said.
Sure enough, the service has continued to evolve, and just last month, Zaarly introduced a major update called Storefronts, which gives sellers a better way to market their products and engage with customers online.
Zaarly now has half a million users and has processed more than $40 million in requests, and according to Fishback, that may just be the tip of the iceberg. “If we get this right, we have a real shot at being the best place in the world to go and start your business,” he says.
Delicious used to be one of the hottest sites on the Internet, but over the years, the social bookmarking service has lost much of its buzz and has gone through some big changes.
The site was sold off to Yahoo in 2005 and then sold again in 2011 to AVOS, the startup created by YouTube’s co-founders Chad Hurley and Steven Chen. The AVOS team tried to revive interest in Delicious by introducing some new features — most notably, Stacks — but Hurley says this proved to be “a little painful” because the Delicious community wasn’t accustomed to changes.
“We wanted to reposition Delicious to a new set of users and hopefully jumpstart growth,” Hurley told Mashable. “As we’ve learned throughout this experience, it’s hard to just introduce that stuff right off the bat with an existing community.”
Moreover, AVOS initially had a very small team working on Delicious, which made it harder redesign the website. Hurley and Chen eventually shifted their focused to Zeen, another AVOS project that recently launched in beta.
However, Hurley says the team hasn’t forgotten about Delicious. The plan is to put out a new beta version of the site “over the next month,” which should make the service “more streamlined and easier to use.” The team is also working on several other new things related to the site, including an iPhone app.
The four college students behind Diaspora had a good idea and great timing. They launched a Kickstarter campaign to create a more open social network that lets users own their data, at a time when Facebook was being bombarded with privacy complaints from users. The Diaspora campaign ended up raising 20 times the funding goal on Kickstarter and generated tons of headlines — both for the team’s ambitious plan to take on Facebook and for being the first major Kickstarter success story.
Then came the hard part — the team had to actually build the damn thing. They released source code for Diaspora in September of that year, but it was panned for being riddled with security flaws. The team hunkered down to continue building the service, occasionally promising to try and “go faster,” but more than a year later they still had little to show for their efforts.
In late 2011, the startup made headlines again, this time for the sad news that one of its founders, Ilya Zhitomirskiy, had committed suicide. Even then, the team didn’t give up the dream completely.
When Mashable reached out to co-founder Maxwell Salzberg earlier this year, he told us the startup was working on “some cool stuff” as part of its enrollment in Y-combinator’s Summer batch. As it turned out, that cool stuff ended up meaning an entirely new service called Makr.io, an image remixing site. In late August, the team announced that they were giving Diaspora to the community. Two of the three remaining founders shifted their attention to Makr.io instead, though the team said that they would continue to play a role in developing Diaspora going forward.
“The goal is to make this an entirely community-driven and community-run project,” the team said in a blog post. “This is a new opportunity for Diaspora to grow further than ever before. We can’t wait to see what we can do together.”
Two months later, in early October, the community announced its first updates to Diaspora’s code. Perhaps the dream isn’t dead after all.
Hashable started out strong in 2010 by raising $4 million for its vision of killing off the business card for good. The Hashable app was designed to help users network by introducing contacts from their phone’s address book to one another and keeping track of new contacts through various hashtags.
In late 2011, there were reports that the startup was planning to pivot away from being a networking app to being more of a souped-up address book application. Then in July 2012, the company decided to shut down the application all together.
Michael Yavonditte, Hashable’s former CEO, explained on Twitter shortly afterwards that the Hashable team was working on building an ad platform that helps businesses monetize their mobile traffic. The new company, called YieldMo, has absolutely nothing to do with Hashable.
The Hashable app and website ceased to exist back in July. The business card has won, at least for now.
All that extra hype can help a tech startup attract users quickly after its launch, which is key for any tech company just starting out, but it can also put too much pressure on a young company that may not have all the kinks figured out.
In the past few years, countless tech startups have earned plenty of buzz at first, only to fade from the spotlight. Some of these companies have since gone bust, while others are still chugging along and tinkering with their business models. Occasionally, a startup lives up to its early hype and continues to attract users and innovate its industry.
Mashable reached out to some of the hottest tech startups that have launched in recent years to find out how their businesses are doing today and what their plans are for the near future.