There is a lot you can learn from other people’s failed business ideas.
It can save you significant time and money.
You also know discover potential business ideas and models to avoid.
So, we’re going to be diving into business ideas around the world that have failed. Some are from first-time entrepreneurs, and others were more established ideas and had already been started.
However, there are some great business ideas in this list, but you’ll notice a large part of their failure was unsuccessful execution, so we’ll touch on that too.
In either scenario, there are some key takeaways that all new and aspiring entrepreneurs need to know because it can save you time and money.
1. Hot Air Balloon Backpack
Why it failed: This business idea most likely failed because it was unrealistic, and the founder wasn’t able to create a safe minimum viable product that investors could get behind. Also, it would be very hard to get this kind of invention into the hands of many people, as Hot Air Ballooning is also a social experience.
Takeaway: Make sure your business ideas are realistic. It can be fun to think of absurd ideas, but if you try and execute on them, you have higher chances of failing.
2. Online Bong Store
Why it failed: The founder of this store opened up her website in a state where drug paraphernalia of any kind was illegal, especially bongs. However, when she first thought of the idea and began to execute, she didn’t know it was illegal as this was the first company she started. However, she soon found out and it had to be shut down since it was an illegal operation.
Takeaway: Do your research into your state and city laws. Some things may prohibit you from doing business in certain ways or with certain products and services. There are also usually laws around what types of marketing you can do and are allowed to do, so look out for that as well.
3. Televised gaming competitions
Why it failed: The founder of this idea claimed it failed because it was started too early. The market was not yet ready for the idea, as it was the early 90s. There were gamers, and there were people that watched stuff on their computer, but it was a horrible time because internet speeds were so slow.
Takeaway: Test your idea before launching it, as your idea could be too advanced for what the market is currently ready for.
4. Candle Manufacturing
Why it failed: This business was started when the founders were in their late teens. However, they were making it at home using inefficient methods and their costs soon began to out way the revenue, so they shut down the business. They didn’t want to scale and take it to a manufacturer or buy their own equipment because they just weren’t that passionate about the idea.
Takeaway: Plan out your costs and expected revenues to the best you can before launching your idea. You’ll at least want to know ahead of time if you’d need equipment to scale this business. Otherwise, you could save your time and move onto something better and more suitable for you.
Why it failed: You can probably imagine why this idea failed… A few people actually bought it, but it is really just a gimmick and you’d receive an empty jar. Shipping cost alone ended up killing the idea as well.
Takeaway: Start a business that won’t die in three weeks after the PR stint cools down. Also, if you are going to ship anything, make sure you have good margins on your product.
6. Tech/gaming website
Why it failed: Like many of these failed ideas, this one was also started by a group of late teens. They set up all the hosting and domains to have a gaming website where they wrote reviews on games and created other related content. After months of hard work, the ad revenue they were seeing from the site was minuscule. And, after some Google algorithm changes, their organic traffic fell and they ended up moving on as the team wanted to do different things.
Takeaway: Have a plan for how you’re going to make money before you launch. This sounded like a great idea that would have provided entertainment to people, but their revenue model was not strong enough. Secondly, you need to be passionate about the idea, so when the going gets tough, you don’t abandon ship.
7. Mobile-app business card
Why it failed: The founding team of this business idea ultimately failed because they couldn’t come up with the money to build the minimum viable product to validate the idea. So, they couldn’t seek funding to get the business off of the ground.
Takeaway: If you don’t have any of the skills needed to develop the minimum viable product, it may be better to start a different business idea.
8. Currency exchange app
Why it failed: This was originally an idea that one of my friends had. You’d meet up in person to exchange different currencies when you are traveling. The idea looked profitable on paper, however, the founding team ended up falling apart. We each had a different plan for what we wanted to do after University.
Takeaway: Watch out for how much time and money you invest into a business idea, as you can use a lot of time just validating the idea before you launch it. And, if you and your founders have other plans soon, then maybe stop the process and think of a business idea you can launch yourself.
9. MMA sponsorship platform
Why it failed: The founder simply put it this way…”Turns out there are a lot more aspiring MMA fighters than there are companies looking to sponsor mma fighters”.
Takeaway: It’s important for your business idea to have a market that can generate money, otherwise, it won’t be able to be a sustainable business.
10. Travel planning and travel diary apps
Why it failed: Here is a basic explanation of why this business model and idea doesn’t work:
The problem with travel planning isn’t the frequency of use: as other people have pointed out, Zillow and Cars.com are used infrequently but make money.
The problem is generating a consumer willingness to pay. Kayak has a commission on every sale, so their business model is baked in. But a travel planning site will need to get customers to pay extra, in some way, and they’re reluctant to do so.
Travel planning is something that people have never paid for directly — travel agents used to extract their fees invisibly — so a travel planning company will either need to sell the travel themselves and collect commission like existing travel sites, or create a new market.
Takeaway: Stay away from this idea! But also, don’t base your business idea off of increasing prices to charge a customer on products and services they can obtain themselves at a lower price. It is hard to sustain this model as you constantly have to sell new people, and there is little repeat business.
11. College campus textbook exchanges
Why it failed: Many college students reported having launched these kinds of business ideas related to campus textbook exchanges, however, most of them end of failing because the courses will change their curriculum based on a newer textbook. Making it impossible for a book to last longer than a few years before it is useless. Lastly, the small life of a book combined with small margins charged to keep it competitive made it fail.
Takeaway: Make sure the product or service you are dealing with has high enough margins that it can support a thin market. This will make sure your business idea can last in tough times.
12. Social Media Aggregator
Why it failed: The founder of this idea claimed he failed due to the high competition out there. He came in late after Buffer and Hootsuite entered the market by storm. He also didn’t want to raise any money, so after launching the service he realized the competition was too strong, with huge IT teams and millions in marketing spend.
Takeaway: Sometimes the market is too small for the current amount of competition. Similarly, the founder didn’t have a unique differentiator than these other services, making it harder for people to be convinced to switch.
13. Tinder – for people who want to fight each other
Why it failed: This sounds like a silly idea, but, the founder was talking about a fighting app where people could meet up and fight. This ultimately proved to be too dangerous, and the company could be held liable if someone was killed or injured. So, they killed the idea and moved on.
Takeaway: There can be huge legal consequences if customers are harmed when they use your product or service. Keep this in mind and see if there are risks that they face before you launch it.
14. The Punjab Kitchen
Why it failed: After starting the business, the founders faced a huge problem. They couldn’t keep their margins high enough, and their prices low enough to compete with the competition. Their competitors had such low prices leaving no room to enter the market and the business failed.
Takeaway: Make sure to conduct competitive research into their pricing and margin structure. This way, you know where you need to be in order to exist and do business in that industry or sector.
15. P2P infrastructure provider
Why it failed: This business idea mainly took advantage of buzzwords in the infrastructure industry at the time, and ended up failing because it didn’t actually solve any problems. The founder built an amazingly beautiful interface and platform, but it couldn’t help people, so it never made a single sale.
Takeaway: Make sure you are solving a problem with your business idea. This will help you avoid wasting your time and money building something that one no actually wants. It also shows how important market validation is. Take time to validate your business idea otherwise you could waste time and money.
16. E-commerce t-shirt sales
Why it failed: The company was launched and based out of this founder’s place in Mexico. However, his house was far away from any big city where he could make good sales and distribute his product around the world. With the big distance came big shipping costs, and so the business idea quickly died. Although he had a unique product, the shipping costs became too unbearable to weigh and the business was shut down.
Takeaway: Consider your current situation when you are thinking of business ideas. If you need to launch your idea from your house, then make sure the business model fits your location. This idea obviously did not for this individual, so unfortunately it failed.
17. SaaS app to send a last message to the people you love when you die
Why it failed: The founder had a couple of points for why this idea failed. The first was that it didn’t have a proper audience. Young people don’t want to buy this as they don’t really care about it, and the current generations are too old to care about using tech. Plus at $30 a year, it wasn’t cheap.
Takeaway: Make sure the idea has a real audience. This should be a process that you sit down and think about who your audience will be and how you are adding value to them. You also want to put yourself in your potential customer’s shoes. This founder did and realized no one would pay for this.
18. Instagram hashtag search engine
Why it failed: This company launched and became a huge success overnight. People were using it like crazy. Suddenly, a few months later, Instagram changed its API and you couldn’t get hashtag data any longer. Thus, the company shut down because it could no longer search hashtags – which was its main purpose.
Takeaway: Finding business ideas to start based off of other companies can make you millions, but it also leaves a massive risk that you can’t control. In this case, the founders, unfortunately, had to cecum to the mercy of Instagram and their decisions.
19. Wholesale drum sticks
Why it failed: The business model was set up to fail right from the beginning. Unfortunately, most retail and online music stores sell their drumsticks at a loss price, in the hope to get more sales on the cymbals and other equipment with higher margins. When the founder launched the business idea, it failed because she would have to sell them at a loss to be competitive with everyone else.
Takeaway: Again, this is a great reminder that you need to conduct market research before you establish the idea into a company. The research will save you a lot of time and money in the long run.
20. Medical Device laser which could treat neuropathy in patients
Why it failed: The founders raised 10k in pre-seed and built a 3d model of the prototype, and began to see an interest. Unfortunately, passing the barrier of FDA compliance and licensing is a rite of passage and they could not raise enough capital to pass that barrier.
Takeaway: Make sure you have enough cash flow and runway to get through the hurdles that some industries face. Some industries require a lot of funding to get through the lag times of regulatory approvals and such.
21. Condom Key chains
Why it failed: No one wanted to carry condoms on their keychains!
Takeaway: Some ideas are too absurd for the actual market. Keep that in mind. Lol!
22. Mystery Science Theater
Why it failed: This business idea was to provide a podcast-style show, live. However, the main problem why it failed was because the founder only thought it would work. He never actually knew if it solved any problems, provided real entertainment, or if people who listen to podcasts actually want to spend time watching it live.
Takeaway: Some business ideas may peak your interest because they sound fun and interesting, but make sure you wouldn’t be the only paying customer.
23. Grocery Delivery
Why it failed: This is a famous business idea that has failed hundreds of times. Many people have been able to do it locally, but not at scale across several states and provinces. Firstly, this is a very costly business to run. Building a fleet of vans that can distribute and operate at scale is expensive to buy. Secondly, the trucks need refrigeration, adding to the cost. Lastly, people only want to pay a small fee for delivery. The business model has high expenses, and low revenue projections.
Takeaway: Make sure there is a good balance between expenses and revenues (with revenues obviously exceeding). If the costs look like they keep running up and up, then maybe this idea isn’t for you.
24. Fine Art Ownership Platform
Why it failed: Unfortunately, this idea failed due to bad timing. It was a great idea that had great potential to allow people to invest in the art market, without a million dollars. However, they launched it 6 months before the financial crisis in 2007/2008. Once the crash hit, although their market could still afford the service, the rich weren’t investing in art and the founders ran out of cash to wait out the crash.
Takeaway: Sometimes waiting to start your business idea for better market conditions is smart. Or you need to change ideas to a business that caters to the necessities and problems related to the market crash (for example, dollar stores). Otherwise, your business could be susceptible to market crashes.
25. Security Software SaaS
Why it failed: This business idea failed for a unique reason. The equity structure that was initially set up when they brought on investors was not built to grow. For example, the equity stake taken by other investors who came in was too big. This makes it harder to raise more money later because and your shares become diluted. Ultimately leaving you with no incentive to take on this risk.
Takeaway: If you have plans to raise a lot of money and run a massive corporation, make sure you raise your money right. There are certain rounds you should go through, and there are very important structures to follow so both you and your investors are protected.
You should also avoid selling large amounts of the company in the beginning to avoid losing control. It also looks unattractive from another investors standpoint if the founder has little equity and there are a lot of other investors.
26. Help journalists become entrepreneurs and earn a living from their work online.
Why it failed: The two founders ultimately ran out of motivation to continue to pursue the idea. They first battled with not receiving the traction they hoped for from their launch party (and they didn’t leave enough room in their cash flow projections). Then the two started to fight and communicate stopped, killing the idea.
Takeaway: Make sure you pick a co-founder that you can work with for the next 10 to 20 years. Also, when you look to do your projections, don’t count on a successful launch. Many launches are unsuccessful, but it is the grind and grit after where companies succeed.
27. Homeless Tours
Why it failed: This failed due to public backlash being too harsh. It was an idea that is also insulting, so its hard to combat that kind of negative PR.
Takeaway: Although you can make money doing these things, it is not the most sustainable business idea. Especially if a journalist picks this up and makes stories about it.
28. Caffeinated Alcohol
Why it failed: This was a popular product for this one company, and was also a business that many operated in the United States that failed. It failed due to a regulation change, and they could no longer serve alcoholic beverages with caffeine.
Takeaway: Regulation can kill your business idea, so make sure enough people using your product don’t get hurt and the government makes regulation to shut that company down. This happens all the time, so make sure to weigh the pros and cons of what your product or service could do for the customer.
29. Financial Management App
Why it failed: This financial management app ended up failing because it tried to enter the market at the wrong time. Right when financial management apps were becoming really popular due to banks having crap versions, they tried to enter the market and didn’t raise enough money. Meanwhile, their competitors were raising millions and millions of dollars, and they couldn’t stand the competition long enough. They also didn’t want to dilute themselves that much and raise more money.
Takeaway: Sometimes you need to make that decision if a small piece of the pie is better than no pie at all. In this situation, the founder here couldn’t keep up with the changing business landscape, and didn’t raise enough money to compete or last long enough before the spending spree stopped.
30. Online Delivery – Of Everything
Why it failed: This company wanted to delivery literally anything and everything. Even if you ordered a pack a gum. Obviously, this business model became unsustainable very quickly, as they positioned themselves as a shipping company. In the end, customers found it hard to build a relationship with a shipping company, so even though they could deliver anything to you, people weren’t loyal. After spending millions, the company also couldn’t keep up with generating enough revenue.
Takeaway: The business model should make sense on paper and off paper. This one clearly didn’t. As shipping everything to anyone would cost billions of dollars as you’d need your own distribution networks across the entire USA.
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