What happened to StumbleUpon?

Founded in 2001, StumbleUpon was a discovery and advertisement engine pushing content recommendations to users in the form of “stumbles”. As competition started to increase as more businesses tried to emulate its success. Many users were lost to rivals such as Pinterest, Reddit, and Digg after the StumbleUpon algorithm started to become outdated and made the site unresponsive. To remain financially viable, StumbleUpon terminated 30% of its workforce in 2013. The company failed to achieve further funding while other companies like Pinterest became tech unicorns.

Background

StumbleUpon was a discovery and advertisement engine pushing content recommendations to users in the form of “stumbles”. In some ways, StumbleUpon was a social network because content recommendations were based on pages liked by a user’s friends and family.

The platform was founded at the University of Calgary in 2001 by eventual Uber co-founder Garrett Camp together with Geoff Smith, Justin LaFrance, and Eric Boyd. After attracting more than half a million users, the company caught the attention of Silicon Valley and received a substantial amount of angel investor and seed funding.

In 2011, StumbleUpon reached 25 billion stumbles and was adding to this figure by an incredible 1 billion stumbles per month. The following year, StumbleUpon eclipsed 25 million registered users.

Just six years later after 16 years online, the service was shut down. Let’s take a look at how and why this happened.

Competition and monetization

StumbleUpon was popular during the early years before the concept of like buttons and newsfeeds became mainstream. In fact, the platform was so popular it once accounted for half of all social media traffic in the United States.

Inevitably, competition started to increase as more businesses tried to emulate its success. Many users were lost to rivals such as Pinterest, Reddit, and Digg after the StumbleUpon algorithm started to become outdated and made the site unresponsive.

Pinterest in particular was a major threat because it had developed the ability to incorporate paid advertisements and sponsored content into its offering. With a less developed monetization strategy, StumbleUpon was reliant on investment funding to keep the lights on.

eBay acquisition and buy-back

Noticing its popularity, eBay acquired StumbleUpon for $75 million in 2007. However, the partnership between a giant online marketplace and a social network proved to be unsuccessful.

Camp, Smith, and several other investors then bought back the company in 2009 for a reported $29 million. Two years adrift under eBay had left the platform uncompetitive, so Camp instituted a major redesign and launched an app for all major devices. 

The company enjoyed a period of success with advertisers flocking to the platform, but many complained the redesign had been made to look exactly like main competitor Pinterest. 

To remain financially viable, StumbleUpon terminated 30% of its workforce in 2013. The company failed to achieve further funding while Pinterest became a tech unicorn.

Garrett Camp then re-acquired the majority share of the company in 2015 after its financial problems worsened. 

Changing consumer preferences

Perhaps the clearest explanation for the end of StumbleUpon is changing consumer preferences.

StumbleUpon was one of the pioneers of helping people waste time on the internet. But at some point, users decided to spend their idle time scrolling news feeds on Facebook, Twitter, and Instagram.

Indeed, social media feeds curate the vast internet in a way that bouncing randomly between sites on StumbleUpon never could. These thoughts were echoed by Camp when discussing the shutdown of StumbleUpon and transition to similar site Mix.com, “The number of platforms to share or host content has increased significantly, yet we still need better tools to help us filter through the exploding amount of content on the web, and find signal within the noise. And we’ve learned from SU that while simplicity and serendipity is important, so is enabling contextual curation.

Key takeaways:

  • StumbleUpon was an early social network founded by Garrett Camp, Geoff Smith, Justin LaFrance, and Eric Boyd. At one point, the platform was responsible for half of all social media traffic in the United States.
  • StumbleUpon suffered intense competition from the likes of Pinterest, Digg, and Reddit – both in terms of site functionality and monetization strategy. After a failed partnership with eBay, Camp bought back the company and instituted a major redesign to limited success. 
  • The StumbleUpon user experience became outdated as consumers preferred to waste time scrolling through news feeds. Upon this realization, Camp shut down the service in 2018 to focus on a more modern iteration called Mix.com

Read Next: Pinterest Business Model, Reddit Business Model.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"