Flud, a startup that sought to be “Instagram for news”, will close down as of August 8. The company built social news reader applications for iOS, Android, and Windows Phone. The service let you create profiles, follow others, and directly share news to those following you. The interface resembles Instagram, except that each photo connects to an article. The intent was to create a mobile news ecosystem where users interacted about the content that interested them.
Founders Bobby Ghoshal and Matthew Ausonio founded Flud in 2010. The San Diego company raised $2.1 million in initial financing and in March 2012 VentureBeat reported that the company was planning to raise between $5 million and $8 million more. Flud then pivoted to a business-to-business model earlier this year, with an enterprise product that companies could use to encourage conversation about relevant topics among their employees. Ghoshal said that being an enterprise company is “wildly” different than operating as a consumer company, and the team wasn’t prepared for these shifts.
“We have a product that works brilliantly and has been successfully tested by multiple large enterprises,” he told VentureBeat. “But it’s only been a short 7 months of testing. Selling to the enterprise is a long and tedious process, especially for a product as young as Flud. We ran out of money and hence time. All I can say is, the enterprise news market is huge, the opportunity is immense and it is there for the taking NOW. ”
The news space is a crowded one, with competitors including Pulse, Taptu, Flipboard, Prismatic, Digg, Feedly, Zite, and more. Google recently shut down its RSS feed client Google Reader, which many took as a signal that RSS was on the decline and that more social, mobile-minded news readers would prevail. This was not the case for Flud, which now plans to sell its technology and intellectual property.
The reality is that startups fail. Shikhar Ghosh a researcher at Harvard Business School, found that three-quarters of venture-backed firms in the U.S. don’t return investors’ capital, and the National Venture Capital Association estimates that 25 to 30 percent of venture-backed businesses fail completely. The startup world is competitive and there is often a bigger, stronger company out there addressing the same problem. Furthermore, it is tough to attract users and monetize, particularly on mobile.
VentureBeat has reached out to Flud for further comment and will update accordingly.
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