Why Blippar Failed, a unicorn startup post-mortem.
By Alan Smithson
How did a unicorn startup (valued over $1B) from London, UK founded by the real life ‘Slumdog Millionaire”, named on CNBC’s global ‘Disruptor 50’ list that raised over $131M suddenly fail?
What went wrong?
In this article, I attempt to break down the reasons why Augmented Reality (AR) startup, Blippar ultimately closed its doors entering administration proceeds last week. While it’s easy to point fingers at the CEO and say “He was unfocused” or “He changed business models too much”, or blame the investors Kazanah and Candy for blocking emergency funding. The real problems for Blippar started way back when they failed to create one product that the market wanted, or that solved any real business problem.
One thing we know for sure is that is was 100% not lack of funding that caused the demise of one of the world’s pioneer AR companies. Everyone in the industry owes a huge vow of gratitude to CEO, Ambarish Mitra and his team for pushing the limits of this technology, experimenting with new business models, for innovating in the fields of computer vision, augmented reality, creative content, fundraising and creating a whole new industry with no road map to follow. They literally paved the way for future companies to prosper.
Here is a post-mortem on Blippar, who’s mission was: “To be the bridge that brings the digital and physical worlds together, enhancing everyday life with Augmented Reality”. And who’s tagline was: “Where AR & AI meet”
Reason #1: Lack of Focus
Entrepreneurs by their very essence have shiny object syndrome and if kept unchecked, can lead to teams wasting a LOT of money digging really deep rabbit holes. Mitra is no exception to this, but the difference being he was able to raise enormous amounts of money that fueled the digging faster and deeper.
Some of the holes Blippar explored include; AR on print, AR Editor, WebAR, Location based AR, Navigation, Object Detection, Facial Recognition, Childrens Education VR, Visual Search, Car recognition and I am sure there were many others.
Back in 2014, Blippar acquired AR startup, Layar which had over 30 million downloads at the time. The Layar founders later tried in vain to ‘buy back’ their company citing Blippar “Lacks vision and strategy”.
Reason #2: Hidden Pricing Scheme
In 2019, hiding the cost of something is simply a layer of friction for the customer and in no previous version of Blippar’s websites from 2011 onward was a pricing schedule ever listed, even as they introduced their own AR editing platform, Blippbuilder.
While Blippar worked with some incredible brands and famous names, I suspect they didn’t consider what their business model looked like at scale. What is the magic price where AR would become democratized, but still provide a great return? Blippar seemed to have been secretive for a reason, perhaps because it was always out of reach for most.
From Blippar.com (circa 2014)
Reason #3: Complicated User Interface
Blippbuilder, while elegant in its web-based editor interface, was designed with professional AR artist and professional use in mind. The only problem was, there were no AR artists or professionals, so rather than make an editor that anyone could use, they made it complicated and difficult for users to create their own content. Maybe this is one of the reasons for the hidden pricing scheme.
Reason #4: Market Adoption
Blippar launched with much fanfare and benefitted greatly from first-mover advantage sucking up $100M in funding in its first year. After spending enormous sums of money educating brands and consumers, Blippar never found that ‘killer app’ moment when things just clicked. I suspect they were making a lot of technology just to see ‘can we make that work?’ when they could have spent more time speaking with end users about the process and how to improve, which leads to the next reason.
Reason #5: Forgot about the customer
I have reviewed several versions of Blippar.com from 2011 to 2018 and there is one amazing consistency. Every piece of content was about how great Blippar was and how wonderful AR is, but absent is the most important thing to the customer, what’s in it for them. What benefit do they get from AR. Something as simple as ‘Make huge margins with AR ads using our platform’ or ‘AR drives sales up to 35% faster and increases speed to purchase by 21%’ (both are fictional numbers to illustrate the point).
There is nothing easier to fix with a company than its customer messaging. Focus on the needs of the customer and what matters to them. If Blippar listened, they probably would have realized that even in 2018, people are still amazed at seeing a video come to life from an AR experience. They would have realized that people were simply not ready for AR yet and they could have saved for the rainy day that came Dec 16, 2018 when they were forced into Administration.
Reason #5: Timing
The single biggest driver of success or failure of a business (especially a tech company) is timing. In the case of Blippar, they rode the wave of AR, but realized too late that it was the wrong wave and now the next wave is here. With over 2 billion AR-enabled smartphones, educated customers, mass-media attention and Snapchat and Facebook using AR filters built into their ecosystems, the Augmented Reality industry is about to explode. It’s sad to think if Blippar just held on one more year to see all of the hard work payoff.
As an XR professional, I for one am grateful to Blippar’s incredibly talented team for pushing boundaries, trying new things and paving a path of success for the next generation of startups in this exploding field. I am sure a large percentage of the Blippar crew will go on to do great things stemming from the incredible education they received building the future.
About Alan Smithson
Alan’s purpose in life is to inspire and educate the next generation of young entrepreneurs to think and act in a socially, economically and environmentally sustainable way.
Alan is the CEO of MetaVRse, a global leader in XR Technology (Virtual, Augmented & Mixed Reality for Print, Retail and eCommerce).
Alan is a founding member of the VR/AR Association, IEEE Mixed Reality Ethics Committee member, Mentor for a youth entrepreneurship program called ‘The Knowledge Society’ (TKS) and a mentor for Techstars Toronto and is on the SXSW Pitch Advisory Board for XR. Alan is also a judge for the global Auggie Awards.
Prior to MetaVRse, Alan invented Emulator, the world’s first touchscreen DJ System; used by Linkin Park, Armin Van Buuren, Microsoft, Sony, Heineken and more.