Hindsight 2.0: Lessons From A Failed Web 2.0 Startup
Certain circles are buzzing with the news that Kiko is on sale on eBay. I first heard the news last week, but it wasn't public until today so I didn't want to write about it. — For those that don't know who/what Kiko was …
Context & Ripple Effects
Kiko has confirmed the least glamorous exit in the Web 2.0 playbook: shut down and listed on [[a:none|eBay]], where the founders will take whatever the auction clears. OnStartups frames it as a post-mortem, but the mechanism is the real story — a consumer marketplace built for collectibles is now hosting the liquidation of a venture-backed company.
The venue choice matters because eBay itself is under scrutiny this summer: analysts said in June 2006 they doubt it can recoup the $2.6–4 billion Skype acquisition, so the platform hosting Kiko's fire sale is simultaneously defending its own premium-deal logic. One confirmed fact anchors the whole episode — Kiko put itself up for sale on eBay after shutting down, with no negotiated buyer waiting.
First-order effects
- Kiko's founders convert a dead product into whatever the open auction clears, replacing a private wind-down with a market-set price its investors can actually point to.
- Buyers bid through a listing page with no formal diligence process, so the sale prices Kiko's remaining assets on public information alone.
Second-order effects
- The auction creates the first comparable for failed Web 2.0 assets: any founder considering a shutdown can now benchmark against what Kiko fetched rather than guessing.
- eBay picks up an unplanned listing category — whole defunct startups — at the same moment analysts question whether its big bets like Skype will pay back, underscoring how much of its value still rests on the core marketplace mechanics.
Third-order effects
- If shutdowns routinely clear through open auctions, failure becomes priced and legible, making the 'quasi-exit' a standard path alongside acquisition and giving the next cycle of entrants a visible floor for leftover code, traffic and domains.
The trend: Web 2.0 failure is turning into a transaction class, with dead startups exiting through public asset auctions instead of quiet private wind-downs.