Why Danger Inc. Failed: Founder Chaos | Startup Autopsy
$27M
Raised
10y
Time to collapse
$500M
Peak valuation
// startup autopsy
Danger Inc.
Andy Rubin's pre-Android startup — built the iconic T-Mobile Sidekick, sold to Microsoft for $500M, and watched its work become the Microsoft Kin: a phone discontinued 48 days after launch
Evaluating only Danger Inc.’s profile at its peak — without knowing the outcome — the model ranked Unit economics as the #1 likely cause. Documented cause: Founder chaos.
Key Events Timeline
FOUNDING
Danger Inc. founded
CEO CHANGE
Leadership crisis or CEO change
ACQUISITION ATTEMPT
Acqui-hire: Danger Inc. ceases operations
Full Analysis
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Documented cause
Danger Inc. was founded in 2000 by Andy Rubin, Matt Hershenson, and Joe Britt — all veterans of Apple and WebTV. The company's Hiptop device (marketed by T-Mobile as the Sidekick) became the defining teen smartphone of the 2000s, featuring a full keyboard, large screen, and always-on data services. At the time, it was the most compelling mobile internet device available. Microsoft acquired Danger in February 2008 for approximately $500M, intending to use the team to build "Project Pink" — consumer-focused smartphones. Andy Rubin had already left Danger in 2003 to found Android, which Google acquired in 2005. The Danger acquisition resulted in the Microsoft Kin, launched May 11, 2010 — a phone with no app store, no third-party developers, and a full-price smartphone data plan for a feature phone. Microsoft discontinued the Kin on June 30, 2010: 48 days after launch, in one of the most embarrassing product failures in consumer electronics history. The Danger team was reassigned to Windows Phone. Microsoft wrote off the acquisition entirely.
Lesson
“Acquiring a mobile hardware team does not transfer product intuition. Microsoft's corporate structure — which required carrier partnerships, Windows Phone compatibility compromises, and enterprise-first thinking — negated every consumer product advantage Danger had built.”