# Fyonk (2012 – 2012)

- URL: https://girisimcikafasi.com/en/startup-graveyard/fyonk/
- Sector: E-commerce
- Country: Turkey
- Total funding: unknown
- Cause of closure: No market need

## What did it do?

Fyonk was a Facebook-based social gifting service launched in spring 2012 by Deniz Oktar and Barış Can Daylık in Turkey. Users could send gift vouchers from partner shops on a friend's birthday or simply to say thank you. A gift would start with a free voucher provided by a brand, and other friends could chip in money to make it bigger.

## Why did it shut down?

According to a retrospective Deniz Oktar wrote in 2016, the rush of sign-ups in the early days was driven by a crowd of around 10,000 people who chased every promotion going; they used the free voucher and never spent anything on top. The team built an algorithm that identified these users with close to 95 per cent accuracy, but the real problem remained: very few people wanted to send a friend a gift voucher with their own money. The vouchers could not be used in physical shops, Facebook announced its own gifting service, and, by Oktar's account, investors held back once Wrapp, the heavily funded Swiss start-up, announced it was coming to Turkey. Oktar's own summary was blunt: the idea did not suit Turkey.

## The story

At the start of 2012, Deniz Oktar and Barış Can Daylık had just left SocialWire, the company they had spent four years building and had moved to San Francisco. By Oktar's account, they threw themselves into the next venture very quickly. The idea was simple: in the Facebook era, birthdays had shrunk to a short message posted on someone's wall, and Fyonk would turn that moment into a small gift. Oktar later wrote that Fyonk was an adaptation of Wrapp, a Swiss start-up, and that it remained the first and only copycat business of his life.

The team went from idea to launch in 30 days. Webrazzi, the Turkish tech news site, featured the start-up at the end of April 2012, and the service opened to the public on 8 May. It worked through users' Facebook accounts, finding friends' birthdays and suggesting gifts. A friend could send the brand's free voucher once, and others could add money to make the gift bigger. According to figures Oktar shared on stage at Webrazzi Startup'12, six days after launch the service had reached 4,500 active users and 3,500 gift vouchers had been sent. Eleven shops were on board, including Tchibo, Ebebek, Çiçeksepeti and BuldumBuldum.

But there was something odd behind the numbers. According to Oktar's 2016 retrospective, with more than a thousand sign-ups a day, the team examined who was coming in and spotted a group of around 10,000 people who followed every kind of promotion. These users redeemed the free voucher and bought nothing on top. The team wrote an algorithm that identified them with close to 95 per cent accuracy and stopped showing them the valuable free vouchers. The office then started receiving complaint calls.

Other obstacles appeared too. There was no practical way to let people redeem vouchers in physical shops. Facebook announced its own gifting service. By Oktar's account, when the heavily funded Wrapp announced it would enter Istanbul, investors and websites that had initially seemed keen chose to wait; Wrapp never actually launched in Turkey. Even so, Oktar did not hide the real reason: nobody wanted to send anybody a gift voucher. About three months after launch, the team shut the project down and turned its technical know-how to other work.

Fyonk's story shows that a fast start and impressive early numbers mean little without an audience willing to pay. In Oktar's own words, users chasing freebies were not a good audience.

## Lessons

- Before celebrating an early surge in sign-ups, look at who those users are and how much they actually transact with money.
- Do not scale a product that grows on free incentives until you have seen whether people still use it once the incentive is gone.
- If you are adapting a model from abroad, factor in the original company preparing to enter the same market with far greater resources.

## Sources

- [Fyonk, a Story of Failing Fast](https://denizoktar.wordpress.com/2016/01/28/fyon-basarisizlik-hikayesi/)
- [50 failed start-ups and 50 lessons from their mistakes (1-15)](https://turkishtimedergi.com/dijital-girisim/50-basarisiz-startup-ve-hatalarindan-cikarilacak-50-ders-1-15/)
- [Fyonk.com: Wrap your gifts through Facebook](https://webrazzi.com/2012/04/27/fyonk-com-hediyelerinizi-facebook-uzerinden-paketleyin/)
- [Fyonk.com reaches 4,500 active users and 11 shops - Webrazzi Startup'12](https://webrazzi.com/2012/05/15/fyonk-com-webrazzi-startup12)