Essential: How Bad Reputation Can Ruin a Startup 🤦🏽📲

Total of investments: $300M
Operating period: 2015-2020

The company manufactured mobile technology. Founded by Andy Rubin, Android CEO, Essential was expected to become the next unicorn and leader in mobile phone industry. In the latest funding, the company raised $300 million and was intended to develop a new smartphone.

But things went wrong after the launch of Essential Phone in 2018. It was made of titanium and equipped with an unframed display. In spite of the high expectations from specialists, the startup sold only 150,000 phones by May 2018.

In addition, Andy couldn’t release Project Gem for smart home systems which popped up only in the company’s commercial.

In February 2020, Essential reported on its closure. “Despite all our efforts and that we did our best, we don’t know how to deliver our products’ value to customers. In this regard, we made a hard decision to close Essential", the company said in its blog.

❌Failure Cause
The amount of investments allowed the startup to stay afloat for only three years. But the series of events happened to the founder and business as a whole resulted in shutting down.

The first product Essential Phone was aimed to revolutionize the smartphone market. However, it failed to impress customers and ended up unclaimed. As a result, Andy didn’t manage to create a new "IPhone" and the product didn’t live up to high expectations.

The second project of the smart home management system was being developed under wraps but wasn’t logically completed. What made matters worse was the pandemic consequences and several scandals which Andy Rubin got into. Under such circumstances, he couldn’t keep working on Essential any longer.