Executive Summary:
StumbleUpon was a discovery engine and social networking platform that allowed its users to discover and rate web content.
StumbleUpon failed because of intense competition, leadership turnover, as well as due to a buggy product.
What Is StumbleUpon?
StumbleUpon was a discovery engine and social networking platform that allowed its users to discover and rate web content.
Users could create their own profiles, allowing them to save their favorite types of content as well as follow other accounts.
This enabled StumbleUpon to learn what type of content a given user was into – and then serve even more relevant articles.
Additionally, users were also able to specify what type of interests they had. Liking or disliking a given piece of content also fed into StumbleUpon’s recommendation engine.
StumbleUpon also put a lot of weight into discovery as highlighted by its Stumble button. Whenever a user pressed that button, a new content piece would be surfaced.
Just like any modern-day social media platform, users could also share content, which would then be shown to anyone who followed them. Moreover, StumbleUpon offered a Trending section that highlighted the most in-demand articles.
Knowing its users’ preferences also informed the ads that StumbleUpon was showing. The company worked together with thousands of advertisers such as Apple, Nike, and more.
StumbleUpon initially started out as an extension for the Mozilla Firefox browser but later also became available via its own website as well as developed apps for mobile phones and tablets.
The platform was ultimately shut down in June 2018. How it came to be, who is behind it, and what ultimately led to its demise will be covered in the next few chapters.
What Happened To StumbleUpon?
StumbleUpon, formerly headquartered in San Francisco, California, was founded in 2001 by Garrett Camp, Eric Boyd, Justin LaFrance, and Geoff Smith.
The company, much like many of the successful modern-day social networks, originated in a college dorm room – this time in Canada.
At the time, a young Camp had just finished his bachelor’s degree in Electrical Engineering at The University of Calgary and had just begun a master’s degree in software engineering at the same school.
Due to a government stipend, which funded portions of his studies, he found himself having some free time. Together with Geoff Smith, the roommate of a childhood friend of his, the two began working on a collaborative filtering extension for the newly launched Mozilla Firefox browser.
By February 2002, the team, which was complemented by Boyd and LaFrance, finally launched their first prototype. Over the next few months and years, they continued to deliberately grow the business while remaining enrolled in university.
One of the major advantages they possessed was that StumbleUpon became one of the first-ever extensions released on the Mozilla platform. Naturally, as Mozilla grew, more and more users stumbled upon the extension (no pun intended).
In 2005, after having graduated with his master’s degree, Camp finally decided to take matters into his own hand. Up until that point, the business had been self-funded by the little revenue it was generating (plus his stipend and teaching assistant wages).
He flew out to Stanford for a conference in September. While at the conference, he got to meet Brad O’Neill, an accomplished investor, who liked the product and what the young team did. He then introduced Camp to other investors in the Valley.
After tons of pitches, StumbleUpon managed to raise $1.5 million in seed funding at a pre-money valuation of around $4 million. At the time, the product had about 650,000 users – all without ever having spent a cent on advertising.
While Boyd and LaFrance had already left the company, Camp and Smith decided to pack their bags and move the company from Alberta, Canada to San Francisco. Apart from being able to move to California, the funding also allowed them to release an extension for the Internet Explorer browser in July 2006.
By the end of the year, after having amassed over 2 million downloads, rumors began to emerge that other companies, such as Google, had expressed interest (or even made offers) to acquire the young tech startup.
Instead of giving in, the team kept plugging away and released a video-focused platform, called StumbleUpon Video, in December 2006 (an app for the Nintendo Wii was released in December 2007).
They also revamped the platform, which at that point boasted a website as well as its social bookmarking plugin, to focus on social activities and content discovery. The platform update was inspired by platforms like Digg and Reddit, which were amassing tens of millions of views every month.
Its success also brought on more competition. In April 2007, Google released a similar toolbar, offering many of the same features that made StumbleUpon so popular. However, Google’s copycat move was overshadowed by much bigger news.
That same month, eBay announced that it had agreed to acquire StumbleUpon for a whopping $75 million. The acquisition ultimately went through on May 30th, 2007. One of the major reasons why the team decided to sell to eBay was that it was promised complete autonomy and independence from its mother company.
But the promise would soon prove to be nothing but empty words. Being under the helm of a huge company meant that Camp and his team would need to have every possible feature approved, which significantly slowed down development.
Throughout 2008, StumbleUpon added less than a handful of features. It, therefore, came as no surprise when in September news began to emerge that eBay had hired Deutsche Bank to find a buyer for StumbleUpon. At the time, eBay was also divesting from other assets, such as Skype, to shift focus on its core marketplace business.
In April 2009, eBay finally found a buyer for StumbleUpon. For a combined $29 million, co-founders Camp and Smith, alongside investors Sherpalo Ventures, Accel Partners, and August Capital, managed to purchase the company back from eBay. Camp, as a result, became its CEO yet again.
When they took back the business, StumbleUpon had struggled with declining growth. The site’s traffic declined from 2.6 million unique monthly users in February 2008 to 1.4 million uniques a year later.
Just weeks after the buyback, StumbleUpon began churning out features as it did before. In June, for example, it introduced an URL shortener to compete against the Diggbar as well as services like bit.ly or TinyURL.
Over the coming months, the team churned out a slew of additional features, such as the ability to follow other users or by introducing a discovery section. In the meantime, CEO Camp was also involved in the founding of Uber (together with its ominous CEO Travis Kalanick), which he headed up as chairman.
By May 2010, StumbleUpon managed to cross the 10 million registered users mark. It also became the second-biggest referrer of social media traffic after Facebook while having managed to surpass platforms like Twitter, YouTube, Reddit, Myspace, or Digg.
The platform’s growth even allowed it to snatch up Anthony Napolitano and Oliver Hsiang, two executives at Google, in June. Two months later, StumbleUpon released its first-ever mobile app for Android and iOS (after introducing an iPad app back in April).
At the turn of 2011, boosted by the growth it experienced from the release of its app, StumbleUpon even managed to surpass Facebook when it comes to social media referral traffic. The platform was responsible for over 40 percent of all social media traffic.
The continuous growth was rewarded with yet another round of funding in March 2011. Its previous backers, such as Accel and Sherpalo Ventures, poured in another $17 million into the company.
Throughout 2011, on the backbone of even more released features, StumbleUpon continued to grow like gangbusters. However, in September, the company also made the controversial decision to shut down some of its beloved features, including groups or HTML blogging.
The mobile app alone managed to grow by over 800 percent, propelling the platform to over 20 million users. In early 2012, the team also completely redesigned the StumbleUpon website by making it more visually appealing and faster to load.
It also hired Teal Newland, its first-ever VP of Sales, in April. This was a clear sign that the company had matured and was ready to shift its focus from user growth towards revenue generation. Unfortunately, things would soon take a turn for the worst.
In May, CEO and co-founder Garrett Camp stepped down from his role. He eventually launched Expa, an incubator of new startup ideas. A month later, the company put ‘Channels’, a feature that would enable users to follow celebrities and (media) companies, on hold.
In September, the company yet again completely redesigned its platform to appear more Pinterest-like (Pinterest itself had previously surpassed StumbleUpon in referral traffic). Despite its best efforts, competition finally caught up with StumbleUpon. By the end of 2012, its traffic had dipped by over 50 percent.
As a result, StumbleUpon laid off 30 percent of its staff (from 110 to 75) in January 2013. The company itself was still being led by CFO and interim CEO Mark Bartels. Other key executives, such as long-time Chief Product Officer Cody Simms also decided to leave the company.
In order to stop the bleeding and reignite, StumbleUpon made its first-ever acquisition in September 2013. It purchased 5by, a mobile video recommendation platform for Android and iOS, for an undisclosed amount. The 5by app was unveiled a few months later (in January 2014).
Yet again, StumbleUpon was completely redesigned during the summer of 2014 in an attempt to boost its mobile presence. However, the speed at which new features were rolled out became reminiscent of its eBay days. It even relaunched the 5by app as a chat platform in October.
Despite multiple attempts, news about the company began to significantly slow down. The next we heard of the company was in August 2015 when StumbleUpon reduced its headcount from 100 to below 30 people.
Even the announcement of Garret Camp buying back the company he helped to launch couldn’t ultimately stop its downturn. In December 2015, StumbleUpon shut down the 5by app in an effort to further save cost.
At the same time, Camp also disclosed that he began working on a new discovery platform called Mix.com, which offered many of the same features that made StumbleUpon so popular. It would, however, take another three years until the last proverbial nail hit its coffin.
In May 2018, after 16 years of being in business, StumbleUpon announced that it would shut down its platform on June 30th. Co-founder Camp, in a last Medium post, said that StumbleUpon racked up 60 billion stumbles across 40 million registered users over the course of its lifetime. The platform’s existing user base would be migrated over to Mix.com.
Why Did StumbleUpon Shut Down?
StumbleUpon failed because of intense competition, leadership turnover, as well as due to a buggy product.
There’s no denying that the social media business is one of the toughest industries to be in. History has shown time and time again that platforms need to keep up with the newest trends in order to remain en vogue.
Platforms like Bebo, Digg, Friendster, and others have had to shut down because they failed to keep users interested in the product.
StumbleUpon may have survived the first era of social media but ultimately couldn’t keep up with the likes of Facebook, Twitter, Instagram, Pinterest, and more – especially with the speed at which they were churning out new features.
While competition can be outmaneuvered, it certainly didn’t help that the quality of StumbleUpon’s product decreased over time as well.
For once, its platform was always loading considerably slower, which obviously frustrates users. On top of that, the quality of its recommendations also decreased over time. Results would sometimes even look spammy/scammy, which led users to unsubscribe from many of the site’s topics.
The bugginess of its platform was probably best exemplified by the failed roll-out of its Channels feature, which its executives eventually put on hold after six months of development.
Consequently, this led to users departing. A crucial part of StumbleUpon was the social aspect of its platform. If your friends (or anyone you’re interested in following) aren’t actively using the platform anyone, you might as well try and find a replacement.
Lastly, StumbleUpon also failed because its founder and many key executives decided to leave the company. Research shows that founder-led companies often outperform the ones that are being managed by outside hires. That is because founders tend to be more passionate and knowledgeable about the product, user, industry, as well as the problems they’re solving.
Both the quality of StumbleUpon’s product as well as its speed of innovation significantly declined after Camp’s departure. To make matters worse, the company didn’t find a replacement CEO who could rally the troops and relied on CFO Mark Bartels to be its interim chief executive.
StumbleUpon ultimately shut down because the platform was simply not attracting enough users and thus not generating any meaningful revenue. Camp likely wanted a clean cut and, therefore, decided to fold it into Mix.com.
