37Coins was a Bitcoin remittance startup founded in 2014, aiming to provide financial services to the unbanked through an SMS-based wallet. Despite initial traction, the company faced technical challenges and market competition, leading to its closure in 2015. Users were advised to withdraw funds by December 30, 2015.
What was 37Coins
37Coins offered a bitcoin wallet and risk management services, enabling financial transactions via SMS. Its unique value proposition was facilitating Bitcoin transfers in remote areas without internet access. Notable achievements include participation in Plug and Play's bitcoin startup group and recognition in CB Insights' Blockchain and Fintech collections.
Reasons behind 37Coins's Failure
Inability to Deliver Quality Product Despite their best efforts, 37Coins struggled to create a product that resonated with the market. This mismatch between the product features and the needs or expectations of the target audience ultimately led to their downfall. The company acknowledged this shortcoming, stating that they were unable to meet market demands effectively.
Unreliable SMS Delivery Issues The technical challenge of ensuring reliable SMS delivery across various international carriers proved to be a significant hurdle for 37Coins. This issue affected the user experience and the overall reliability of their service, making it difficult to maintain a consistent and dependable product offering.
Increased Competition from Rivals As the market for Bitcoin services catering to the underbanked and unbanked grew, 37Coins faced increased competition from other companies like BitGive Foundation and coins.ph. This heightened competition made it harder for 37Coins to maintain its market position and attract a sustainable user base.
Impact on Investors and Market
The failure of 37Coins had a significant impact on its investors and the market. Investors, including Plug and Play Ventures, faced losses as the company could not deliver a market-fit product. The market saw a gap in Bitcoin remittance services, highlighting the challenges of integrating SMS technology in financial transactions.
Lessons Learned from 37Coins's Failure
Understand Market Needs: Ensure your product aligns with the specific needs and expectations of your target audience to avoid market mismatch.
Technical Reliability: Prioritize the reliability of your technology, especially when dealing with international services, to maintain user trust and satisfaction.
Competitive Analysis: Continuously monitor and adapt to market competition to stay relevant and maintain a competitive edge.
Investor Communication: Maintain transparent and regular communication with investors to manage expectations and build long-term trust.
Adaptability: Be prepared to pivot or adjust your business model in response to market feedback and technological challenges.
Resource Management: Efficiently manage resources to ensure sustainability, especially during the early stages of your startup.
Customer Experience: Focus on delivering a seamless and reliable user experience to foster customer loyalty and retention.
Frequently Asked Questions about 37Coins
What was the primary feature of 37Coins?
The primary feature was the SMS Wallet, allowing users to send bitcoins via SMS.
Why did 37Coins fail?
37Coins failed due to unreliable SMS delivery, inability to deliver a quality product, and increased competition.
When did 37Coins announce its closure?
37Coins announced its closure on August 12, 2015, advising users to withdraw funds by December 30, 2015.
Looking Ahead
As the story of 37Coins illustrates, navigating the complexities of winding down a startup can be fraught with challenges. For founders looking to avoid similar pitfalls, consider how Sunset can help you manage the legal, tax, and operational burdens, allowing you to move on to your next venture seamlessly.
