Israel’s Serendip, a social music discovery service, has announced that it will be shutting down operations after only three years in existence. The firm will officially close down on September 22.
Serendip, short for Serendipity, offered a service that let users connect with others who shared their musical taste, allowing people to easily follow one another and enjoy a playlist that was composed of the music that they were sharing. Unlike other music services, Serendip claimed to be the perfect soundtrack for anyone – even those who don’t know what music they want to listen to right now. It was a social music radio.
This is yet another example of how people might have a great idea for something that could be quite popular, but do not find a way to make it profitable. Once all of the needed funds are raised and spent on research and development as well as marketing and advertising, there still needs to be a revenue stream. Some web sites and apps can only maintain their popularity as long as they are free, meaning that another source of income, such as advertising, is needed.
The company said that it is closing because it does not have the ability to keep up with and compete with the advancing technologies offered by its competitors.
In an e mail to its users, the company stated, “After 3 years of amazing ups and downs, all to the sound of great music aired by all of you, we’ve realized that we can no longer sustain Serendip as a music service. The high costs of processing millions of posts every day, and serving relevant and engaging playlists to our users across our web service and mobile app (yes, no Android, I know…) are really bigger than we can handle, a very challenging position for a small startup to be in.”
Serendip was founded in 2011 by the two childhood friends Sagee Ben-Zedeff and Asaf Atzmon. The company received an $850, 000 seed investment from Gigi Levy, The Jeff Pulver Micro Angel Fund, Yossi Gofman and Tron Capital, which obviously proved not to be enough.