Zilingo, founded in 2015 by Ankiti Bose and Dhruv Kapoor, began as an ambitious e-commerce platform aiming to connect small South-East Asian businesses with a global audience. Ankiti Bose, an ex-McKinsey and ex-Sequoia employee, envisioned leveraging technology to empower local businesses to reach beyond their market stalls. Zilingo started as an online marketplace for Southeast Asian shops, offering a range of products from clothing to artwork.

Over the years, Zilingo evolved its business model to address two critical challenges faced by small businesses: expanding customer reach and improving operational efficiency. In addition to being an e-commerce platform, Zilingo ventured into B2B services, providing operational, sourcing, and financial solutions for merchants. The platform offered capital loans, insurance, stock management tools, and supply chain solutions.

The company gained substantial traction and investor interest, securing significant funding in various rounds. By 2019, Zilingo reached a valuation of $970 million and was on the verge of becoming a unicorn. The expansion involved onboarding thousands of merchants and brands and creating a vast network of suppliers and factories.

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However, the success on paper concealed the underlying challenges that ultimately led to Zilingo’s downfall:

1. E-commerce Cash-Burn: Zilingo’s core, despite the B2B aspirations, remained rooted in B2C e-commerce. The company adopted aggressive cash-burn strategies, discounts, and heavy marketing spending to compete with e-commerce giants like Lazada and Shopee. The e-commerce wing became a financial sinkhole with low margins, draining resources from the B2B side.
2. Buggy Tech and Operational Inefficiency: Zilingo lacked internal software to efficiently manage its diverse e-commerce marketplace and B2B solutions. The absence of adequate technology resulted in operational inefficiencies, with manual processes and a lack of essential features for client onboarding during the early years.
3. US Expansion and Pandemic Impact: Zilingo’s move to expand into the US market in 2019 faced setbacks, and the subsequent global lockdowns due to the COVID-19 pandemic further disrupted the company’s growth plans.
4. Scandal and Leadership Crisis: In 2022, Zilingo faced a severe blow when accusations of financial irregularities led to the suspension of CEO Ankiti Bose. Ankiti, in turn, accused the company of sexual harassment. The leadership crisis, coupled with the departure of key figures, intensified Zilingo’s challenges.

The cumulative effect of these factors plunged Zilingo into a dire financial situation, with losses surpassing revenue. In a surprising turn of events, the board suspended Ankiti Bose, and the investors pushed for the liquidation of Zilingo’s assets. Ankiti and Dhruv, despite the tumultuous situation, expressed faith in Zilingo’s B2B vertical and offered to buy the company at half its previous valuation.

Ultimately, Zilingo’s journey serves as a cautionary tale about the perils of e-commerce cash-burn, the importance of robust technology, the impact of external crises, and the significance of leadership in navigating challenges.

Despite having a promising B2B vertical, Zilingo’s financial troubles and leadership crisis led to its untimely demise in 2022

QuizUp, a mobile trivia app, was developed by Plain Vanilla Games and later acquired by Glu Mobile. Founded by Thor Fridriksson in 2013, the app allowed users to compete in timed multiplayer, multiple-choice trivia matches. With over 1200 topics, players could challenge friends or random opponents.

Gameplay and Rise:

Users signed in via social media accounts and answered questions for scores. Each match consisted of seven rounds, including a bonus round, scoring points based on accuracy and time. QuizUp quickly gained popularity, launching on iOS in 2013 and Android in 2014. Within weeks, it amassed millions of users, securing venture capital investments and reaching 20 million users by May 2014.

Business Model and Growth Hacks:

Rather than active advertising, QuizUp adopted native advertising. Partnerships with companies led to questions related to their offerings. For example, Google collaborated on geography-related questions to promote Google Maps. The app’s growth hacks included socializing the application, encouraging users to share achievements on social media, and allowing volunteers to submit questions, fostering user engagement.

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Challenges and Monetization Struggles:

Monetization was a persistent challenge. While QuizUp focused on word-of-mouth publicity, the absence of active advertising, premium memberships, or in-game purchases impacted revenue generation. The inability to monetize led to difficulties in maintaining the game’s user experience.

Downfall and Acquisition:

After NBC canceled the planned television game show in 2016, Plain Vanilla Games sought buyers for QuizUp. Glu Mobile acquired Plain Vanilla Games in 2016 for $7.5M. Despite various attempts to make the game profitable, maintaining a user base of 80 million proved unprofitable. In January 2021, QuizUp was removed from app stores, and its servers were shut down on March 24, 2021.

Lessons Learned:

1. Monetization is Crucial: QuizUp’s failure emphasizes the importance of finding viable revenue streams to sustain user experience. Relying solely on word-of-mouth without effective monetization can lead to downfall.
2. Balancing Growth and Revenue: Growth without a parallel focus on revenue can be unsustainable. Burning through venture capital funds to scale must be accompanied by efforts to establish profitable models.
3. Adaptation is Key: QuizUp’s reluctance to adopt active advertising limited revenue opportunities. Startups should remain adaptable and explore various monetization strategies.
4. Customer Acquisition vs. Retention: While QuizUp excelled in customer acquisition, maintaining profitability with a large user base proved challenging. Balancing acquisition and retention strategies is essential for sustained success.
5. Experimentation and Innovation: QuizUp struggled to innovate ways to monetize its product effectively. Experimentation with different revenue models is crucial for startups to find what works best for their audience.
6. Initial Revenue Generation: Closing the first sale and establishing initial revenue sources can be vital for startups. It provides a foundation for sustained growth and operations.

The QuizUp story serves as a reminder for startups to prioritize sustainable monetization, adapt to changing circumstances, and strike a balance between user growth and financial viability.