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Why Did Flud failed? Here is the complete analysis!

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Flud was a social media of news reading. This app was like any other social media app where we could connect to people but can be productive at the same time.  So what went downhill for this startup for it to shut down in 2013?

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Founder Details

Flud, a startup idea, was started in 2010. Founder Bobby Ghoshal and Matthew Ausonio came up with this startup idea and started working on it with a small team of around 20 employees. Flud initially gained a lot of attention in the tech world that a lot of startups fail to get throughout their entire life. However, the hype that was created was in vain because the startup was shut down by 2013.

Competitor Analysis

Flud already had some well-reputed competitors in the market that was doing the same thing. Two main competitions were Flipboard and Pulse. Both Flipboard and Pulse were well-established, highly reputed, and was dominant when it comes to newsreader platforms. They were providing the same thing as Flud promised to provide. In short, Flud was not providing any new things on its platform and was not adding any new values. It was providing the same thing as Flipboard and Pulse. And since both of these platforms are already downloaded and used by millions, Flud was overlooked by people in this field.

Flipboard

Flipboard was very similar to Flud. It presented content like stories, articles, and blogs in a magazine-like format. It had 1 billion downloads from the Google play store but suffered a security breach. All the customer databases were accessible to an unauthorized party.

Pulse

News aggregator app developed by Stanford graduate. It was one of the very first apps visually presenting news.

Revenue Model and Sources

The company didn’t have any specific revenue model. They were mainly earning from ads management i.e. if a publisher wants to put an ad and promote some product via Flud, then the company gets a cut. They were also earning some amount from active users and activity going on in the platform. Research says that there was also some in-built purchase that users can do however, it was minimal and a lot of users were not interested in it. Flud’s main intention was to earn a good amount of revenue from publishing ads, but since the app was overlooked by the majority of people, publishers were not interested in advertising with Flud and thus, Flud failed to keep up with the main business model they were planning to go for.

Funding and Investor Details

They did have initial funding for development. Flud managed to raise an approx. amount of $2.1 million from different investors like Detroit Venture Partners, Behance, Ludlow Ventures, JFJF Ventures, etc. The majority of this funding was used in the development process of the platform. However, Flud was not able to raise any additional funding for their operations. The main reason was that the company failed to become profitable and eventually ran out of cash.

Business Model

It has a very similar model to Instagram. Users had to make a profile; profile would include the following, followers, number of fluid, and reading list. You can easily connect to the users of the same interest in news, blogs, and topics. Most liked by the users was the feature to access reading lists offline. The news could easily be shared on Tumblr, Google Reader, Twitter, Facebook, Read It Later, Instapaper, and email. It was an all in one app for news, articles, and blogs.

Failure Analysis

We can come up with various reasons why Flud failed:

1)   Flud was not able to stand out in the market and so was overlooked by people and was dominated by its competitors like Flipboard and Pulse.

2)   If Flud provided some unique features that would have brought value to the market on a larger scale, then maybe Flud would have been a successful startup. And let’s be honest, even though Flud distinguished itself as a platform that lets users save articles for later reading, still it’s not that unique. Because if an article gets enough initial attention in Flud, then a Google Search will bring that Flud article on the first page of the search engine. Also, a search bar can help users search for a specific category of articles that they want to read. So saving it won’t be a necessary thing. The thing is, this “Saving Article” step could have been approached in a different way because, even though Flud distinguished itself from others in this criterion, still it won’t be counted as unique as it doesn’t provide much value in the market. And yes, Flud did distinguish itself from others with the fact that users can communicate and follow one another. But Flud’s main domain was not being social media. Instead, they should have worked for being different in the news reading field as their main domain states.

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3)   Flud initially was able to bring a lot of attention and was able to get a lot of funding from different investors. However, they ran out of money as the platform didn’t become profitable and so they were not able to bring the additional investment required for their operations.

4)   One of the most important reasons for failure was quality issues. The final product that was provided by Flud, had a lot of quality issues. The app was covered with glitches and bugs. And in this world, users who find an app buggy will immediately go for an alternative. So that’s why, during the final stage, Flud was not able to live up to the user’s expectations mainly due to its glitches and buggy interface. And normally, when someone reads bad reviews of an app, they automatically don’t download that app and look for alternatives. On top of that, having a faulty app even after getting so much media attention and company praise, made them lose credibility.

Possible Fixes

There were some fixes that Flud could have done and maybe they would have been successful.

1)   Read your competitors more accurately. Clearly, Bobby and Matthew might have thought that since they were getting a lot of praise and media attention, their app will be automatically successful. But they didn’t realize that these praises and attention doesn’t matter until and unless people download and use their app. Now, why would anyone download and use Flud, when its competitors i.e. Flipboard and Pulse were already dominating the market, had amazing reviews, and already had a dedicated user base? If Flud would have studied their competition more accurately, then they would have come up with something very unique from the existing apps that would automatically grab the attention of millions of people.

2)   Flud was clearly not able to live up to the hype they created. Always remember, a “Hype Killer” will always have the highest chance of failing. As I’ve already said, the end product that was provided by Flud was buggy and faulty in many ways. They should have tested the app, again and again, multiple times. Always remember, when it comes to apps, testing is one of the most important stages of app development. Flud lacked testing and so they released an app that was buggy and faulty in many ways, thus, killing the vibe that they initially made.

3)   Use funding properly. Reports say that Flud used almost a majority of its initial funding on development. This made them run out of cash and since the app didn’t do profits, they were not able to raise their future funding. If they would have properly used their funding with proper distribution and saved some of their funding for later use, there was a chance that they could have done something with their savings, for the app and created a buggy-free environment for users. But, they used a majority of their funding on development, and even after that, they came up with a buggy and faulty app.

Thus, this was the downfall of Flud, a startup that was able to get attention in the beginning but was not able to live up to it. Always remember, if you are planning to do a startup, then try your level best to keep up with the hype you create with your product. Quality matters and if you fail to provide the quality, there is a high chance your startup might fail.

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Do tell us all your thoughts in the comments section below, we look forward to reading all the comments in the section below.

Also, don’t forget to download our Android app which contains startup case studies and business book insights, verified business concepts, and no bullshit!!

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FAQs

What was FLUD?

Flud was a social media of news reading. This app was like any other social media app where we could connect to people but can be productive at the same time.

Who are the founders of FLUD?

Flud, a startup idea, was started in 2010. Founder Bobby Ghoshal and Matthew Ausonio came up with this startup idea and started working on it with a small team of around 20 employees.

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