Here are 2 products that millions of people use every single day. Both are tackling the problem of too much information. Both are now close to dead with Google icing Reader and DropBox acquiring Mailbox (I wrote about the unique marketing tactics of Mailbox here).
They were also both tackling problems that have become a commodity – and not valuable ones at that. RSS readers are a dime a dozen (and worth that much in the long run as evident by Google’s actions. Side note: What does this do to Flipboard’s valuation?) and email, while broken at the core, is already installed by default on every single smartphone, desktop and web browser. Even with over 1 million users queuing up for Mailbox it is clear there is no revenue model good enough to sustain a business on “effective email” alone. Sparrow suffered the same fate and took the money as well (ironically from Google but they killed the product and moved the team elsewhere).
Both of these products show us how quick and severe the industry shifts and the new(er) (and welcomed) focus being put on actually making money. Google Reader is an “older” and antiquated product compared to the newer breed, the decision to kill it is purely business value – it has none today and keeps people away from Google’s actual product (search and ads in case you’ve forgotten) and, according to an ex-employee on the Reader team, the focus Google has on their social platform, Google +.
As for Mailbox, the mobile email app focused on “inbox zero” this is simply a lesson of fail fast and exit – this time with a return (estimated at between $50-100 million). New email clients are a niche in mobile – there are a handful of users (1 million + in the case of Mailbox) that find the existing email apps baked into the mobile operating systems limited. I liken getting into the email client business like getting into the soft drink world – perhaps a lucrative market for a unique product but you will never be Coke or Pepsi. The size of the market is too limited, email is already free on every platform and 1 million users not paying for a service (and conditioned to not pay for a service) multiplied by $0 still equals $0.
The lesson? You can’t sell air so long as it’s free.