37Coins was a Bitcoin remittance startup that aimed to simplify financial transactions through SMS, targeting the unbanked population. Despite initial traction, the company shut down in 2015 due to product-market fit issues and unreliable SMS delivery outside the USA, as the competitive landscape evolved.
What Was 37Coins?
37Coins offered an SMS Wallet, enabling Bitcoin transactions without internet access. Its unique value lay in reaching the unbanked population, making financial services accessible via simple text messages. Notably, it gained traction for its innovative approach and was featured in CB Insights' Blockchain and Fintech collections.
What Happened to 37Coins?
The story of 37Coins is a compelling example of a startup's rapid rise and eventual fall, marked by several key phases:
Initial Success and Attention: 37Coins quickly gained traction due to its innovative approach to Bitcoin remittance. The startup attracted Bitcoin advocates eager to send bitcoins to new users and aimed to provide financial services to the 2.5 billion unbanked adults worldwide.
Innovative SMS Wallet: The introduction of the SMS Wallet was a groundbreaking move, allowing users to send and receive bitcoins via SMS. This innovation made Bitcoin accessible to those without internet access, significantly broadening its potential user base.
Challenges with Product-Market Fit: Despite its initial success, 37Coins struggled to deliver a product that fit the market's needs. The reliability of SMS delivery between different carriers outside the USA was a significant hurdle, impacting the user experience.
Competitive Landscape and Financial Struggles: The competitive landscape evolved rapidly, with new Bitcoin companies like BitGive Foundation and coins.ph entering the market. Although not explicitly mentioned, financial difficulties were implied by the company's inability to deliver a quality product.
Closure and User Advisory: Faced with insurmountable challenges, 37Coins decided to cease operations. Users were advised to withdraw their funds by December 30, 2015, and the website was redirected to smswallet.com.
When Did 37Coins Shut Down?
37Coins officially shut down on August 12, 2015, as announced on Finextra. Users were advised to withdraw their funds by December 30, 2015, marking the end of the company's operations and its SMS Wallet service.
Why Did 37Coins Shut Down?
Inability to Deliver Quality Product: 37Coins struggled to create a product that met market demands effectively. Despite their innovative approach, the SMS Wallet faced significant issues with reliability, particularly in delivering SMS messages across different carriers internationally. This inconsistency hindered user experience and ultimately contributed to the company's downfall.
Unreliable SMS Delivery: One of the major challenges 37Coins faced was the unreliable SMS delivery between different carriers outside the USA. This issue was critical as it directly impacted the core functionality of their service, making it difficult for users to send and receive bitcoins seamlessly.
Competitive Landscape: The Bitcoin market evolved rapidly, with many new companies entering the space. This increased competition made it challenging for 37Coins to maintain its market position. Other companies like BitGive Foundation and coins.ph offered similar services, which diluted 37Coins' unique value proposition.
Lack of Product-Market Fit: Despite initial traction, 37Coins failed to achieve a sustainable product-market fit. The company's innovative SMS Wallet did not resonate well enough with the target audience, leading to insufficient user adoption and engagement. This misalignment with market needs was a significant factor in their decision to shut down.
Operational Challenges: The operational difficulties in managing SMS delivery across various international carriers proved to be a significant hurdle. These challenges not only affected the reliability of their service but also increased operational costs, making it unsustainable for 37Coins to continue its operations.
Lessons Learned from 37Coins's Failure
Understand Market Needs: Ensure your product aligns with the market's demands to achieve sustainable growth and user adoption.
Reliability is Crucial: Consistent service delivery is essential, especially when dealing with critical functionalities like financial transactions.
Adapt to Competition: Stay agile and continuously innovate to maintain a competitive edge in a rapidly evolving market.
Operational Efficiency: Streamline operations to manage costs effectively and ensure service reliability across different regions.
Scalability Matters: Design your product to scale seamlessly, accommodating growth without compromising on quality or user experience.
Customer Feedback: Actively seek and incorporate user feedback to refine your product and better meet market expectations.
Financial Planning: Maintain robust financial strategies to navigate challenges and sustain operations during tough times.
Global Considerations: Address international operational challenges early to avoid disruptions in service delivery.
We Shut Down Startups
37Coins' journey underscores the complexities and challenges startups face, from product-market fit issues to operational hurdles. When it's time to wind down, Sunset steps in to handle all the legal, tax, and operational burdens, allowing founders to move on swiftly.
Don't let the end of your startup be more stressful than it needs to be. Book a demo with Sunset today and see how we can help you avoid penalties, reduce liabilities, and transition smoothly to your next venture.
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