And a Startup Crashes

Startups crop up every single week.  Some live long enough to raise capital.  And then there are the ones that succeed and go on to better things.  But there are also those, once in a while that seem like they soaring, until the wind gets pulled from under their wings; and they crash, hard.

Below are two wonderful examples of companies, which are astronomically large with meteoric growth that has catapulted them into hundreds and thousands of cities with thousands of employees, mind you most of part of the sharing business model and not part of the corporate core, but nonetheless a very impressive number.

Uber, for example, was found in 2009, has had $1.5 billion in investment, has spread like wild fire in over 50 countries and 300 cities, if Wikipedia is accurate.  Yet, the startup is not yet profitable. Currently, their revenue is $415 million and their operating costs is $470 million, this is based on speculation, but nonetheless not good.  Source: Wikipedia, Business Insider

Airbnb, for another, was found in 2008, has had almost $800 million in investment, and due to its business model was able to expand to 34,000 cities and in 190 countries.  Airbnb’s revenue is expected to hit $900 million for year 2015 with an operating lost of $150 million and expecting to grow revenue to $10 billion by 2020.  Also the company says they do not plan to be profitable until that same year. Source: Wikipedia, Skift, Fortune

If either of these companies were to go bust, the disaster would be enormous.  People who had originally depended on these companies for extra cash may have over time become fully dependent on their respective revenue model.

But this post isn’t about these two companies, it’s about a much smaller one which recently crashed and left 400 employees out of work and thousands of great clients with no service.  Zirtual, like most startups started as the dream of Maren Kate which ran out of investment money after being found in 2011.  To get a true feel for the story and the details I suggest you read her posts on Medium: Zirtual: What Happened and What’s Next

Read more about Maren Kate on LinkedIn

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