Why did 99dresses Fail?

99dresses was an innovative startup that allowed women to trade clothes, refreshing their wardrobes without spending much money. Founded by Nikki Durkin, it quickly gained traction and media attention. Despite initial success, technical issues, market challenges, and financial struggles led to its closure in 2014.

What was 99dresses

99dresses developed an online platform where users could upload and exchange clothes, creating an "infinite closet" for continuous wardrobe refreshment. This unique value proposition allowed users to enjoy new fashion without extra cost. Notably, 99dresses raised $600K in funding and was featured in CB Insights' E-Commerce expert collection.

Reasons behind 99dresses's Failure

1. Team Instability  The sudden departure of key team members at critical moments left Nikki Durkin without the necessary support to execute her vision. This instability disrupted continuity and trust within the company, making it difficult to maintain momentum and effectively address challenges as they arose.
2. Market and Product Fit Issues  Despite initial traction, 99dresses struggled to adapt its product to the US market. The competitive landscape had evolved, and the product did not provide enough value compared to competitors. Efforts to pivot to a new product idea faced resistance and implementation challenges, further hindering growth.
3. Funding Challenges  99dresses faced multiple funding hurdles, including a lead investor pulling out of a crucial funding round. This led to a cascade of other investors withdrawing as well, making it impossible to secure the necessary bridge funding to continue operations and sustain growth.

Impact on Investors and Market

The failure of 99dresses had a significant impact on its investors, who lost their $600K investment as the company did not achieve profitability or a successful exit. The competitive market landscape and the company's inability to adapt contributed to its downfall, highlighting the challenges faced by startups in crowded markets.

Lessons Learned from 99dresses's Failure

• Team Stability: Ensure a stable and committed team to maintain continuity and trust, crucial for navigating challenges and executing the vision effectively.
• Market Adaptation: Continuously adapt your product to fit market needs and stay competitive, especially when entering new markets.
• Funding Reliability: Secure reliable funding sources and have contingency plans to mitigate the impact of potential investor withdrawals.
• Product Value: Focus on delivering unique value that stands out in a competitive landscape to attract and retain users.
• Resilience: Be prepared for setbacks and maintain resilience to pivot or adjust strategies as needed to sustain growth.

Frequently Asked Questions about 99dresses

What inspired Nikki Durkin to start 99dresses?

Nikki Durkin started 99dresses fresh out of high school to solve the problem of having a closet full of clothes but still nothing to wear.

What were the main features of 99dresses?

99dresses allowed users to trade clothes, creating a marketplace for fashion items, facilitating over 1,000 trades a week at its peak.

Why did 99dresses ultimately fail?

99dresses faced technology problems, team instability, funding issues, market competition, and visa complications, leading to its closure.

Looking Ahead

As the story of 99dresses illustrates, the journey of a startup can be fraught with unexpected challenges and setbacks. For founders facing the difficult decision to wind down their ventures, it's crucial to navigate this process efficiently and effectively. Sunset handles all the legal, tax, and operational burdens when winding down a startup, helping you avoid penalties, reduce liabilities, and move on to your next big idea seamlessly.