The company was founded in April 2014 and has already generated sales of 100 million dollars this year. At the end of 2015, customers could buy his cars, for which he charged a 9% commission, in 200 US cities. However, two years later, at the end of 2016, it was closed.
The idea was excellent. Beepi was the first company to create a website that allowed online buying of used cars and even delivered them to customers in California and Arizona for free. The first sales, those of 2014, were so strong that the Silicon Valley galaxy predicted a future similar to that of Uber or Google. That same year, the founder, Ale Resnik, an American nationalized in Argentina, was elected top innovator from MIT. forbes included Beepi in its ranking of The next billion dollar startup. In fact, during those years, the company was valued at $1 billion and raised almost $150 million in venture capital funding. However, over the course of 2016, everything collapsed. The collapse was so rapid that by the end of the year the company was selling just 1,800 cars a year. A trifle since California’s leading used-car chain sold 100,000. The company, which had 300 employees (for such a small task) ran out of money and by the end of the year began selling off its assets.
What happened? According to most experts, the company grew too quickly in the first two years. The founders were unable to adjust the structure as quickly as customers flocked, and errors began to multiply and magnify. Word of mouth about the bugs went viral, and customers stopped coming to the site to make a purchase. Eventually, the overwhelmed company began failing to deliver cars on time, resulting in many customers losing their “provisional registrations.” When he ran out of funds, Beepi simply stopped giving back money to users of their service. Amazingly, the founders continued to spend lavishly as the company sank and ran out of funds. The workforce was still in excess without anyone making the slightest effort to forcibly reduce it, and executive salaries and allowances were exorbitant. Top management spent tens of thousands of dollars on something as pointless as office furniture. With an income of 15 million, they spent 70. From the outside they gave the impression of being “gone”. Or wait for a miracle. In the industry, his actions are explained by scrambling to get more money to fix the mess once things went wrong. Eventually, they stopped running the company and devoted themselves to finding new rounds of funding—which never materialized—or selling the company. In December, after a Chinese investor pulled out, Beepi closed its doors.
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Three great failures by three great entrepreneurs