Case study and Reasons for failure of the million dollar start up Tapzo

Can you imagine an app which will aggregately combine all other apps? You may think this type of start up application can earn huge money as people will desperately use such app. But today we will be going to discuss about such an app which was drastically failed in the market.

Introduction

The app is “Tapzo” which was once promoted by Bhuvan Bam. This app got so much success in its early days that it got 100 million valuation very quickly. But their success did not have a long run. In this article we will discuss why this app miserably failed.

Ankur Singla started this app in 2010. It was not tapzo in its first place. It was Akosha which help to manage problems of their customers. Then it become Tapzo in 2016 which was an app aggregator. They got 5 million users in no time. They had best timing to enter the market. They got proper funding. They had an amazing team. Having all of these, they still failed. The reasons are

Changing business frequently 

They first made Akosha, then they converted it into Helpchat and they finally converted in Tapzo. When a company changes their business so frequently, it hampered their reputation and trust among the customers and their investors. One company need to do so much research to enter a new market. But Tapzo did not do that properly.

Problems in cashflow

Any company need to manage their cashflow very carefully. Though they had an great app, but they did not have positive cashflow in their financial statements. They got huge investments from various investors. When they had money they used it in just acquiring customers by heavy marketing. But it did not mean they are getting enough money from customers to sustain in the market.

Dependency on Investors

They mostly relied on their investors. They started to raise money without thinking that how will they make the app profitable. So initially investors poured their money in this promising start up, but when they realized they had no clear vision on future, they stopped giving money. Thus the app was in situation of bankruptcy. 

Neglecting the customer need

They did not care much of their customers. They did not manage to work their app so much smoothly rather they are more into refund. But refund is not the solution, a company need to improve their operational excellences so that a situation like giving refund rarely occurs. But tapzo did not work hard in that field.

Selling the company

This well-funded start up went for sale in just 30 million dollars to amazon pay. They had a huge potential to get higher prices but they could not sustain themselves in such situation for little bit of time. Amazon got this opportunity and buy this tapzo as it had huge data on customer buying habits and other related data which helps them to be market aggregator. The founders and other workers of Tapzo are now working in Amazon employee which is no doubt sign of a failure start up.

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