// startup autopsy

Lolapps

Built on Facebook's back — and fell when the algorithm changed

platform dependencyAcqui-hire

Fatal mistake: Lolapps built its entire user acquisition and distribution model on Facebook's viral channels, leaving it completely exposed when Facebook tightened its platform policies.

Founded	2008
Closed	2012
Country	USA
Sector	Gaming

50%

Key Events Timeline

2008-01

FOUNDING

Lolapps founded in San Francisco to build social games on Facebook's platform.

2008-09

FUNDING

Lolapps raises $4M to fuel development of Facebook social games.

2010-06

PRODUCT LAUNCH

Lolapps reaches peak user numbers, benefiting from Facebook's viral social graph distribution.

2011-09

PRODUCT LAUNCH

Facebook tightens platform policies and reduces viral distribution, causing user acquisition costs to spike across all social game developers.

2012-06

SHUTDOWN

Lolapps is acqui-hired as its games business becomes unsustainable without cheap viral distribution.

Full Analysis

Analyst plan

Documented cause

Lolapps built its business model entirely around social games distributed on Facebook's platform. The company's growth strategy relied heavily on Facebook's viral distribution mechanisms and organic user acquis...

ition. In 2012, Facebook implemented significant changes to its viral distribution algorithms, dramatically reducing the organic reach of gaming content. This algorithmic shift caused user acquisition

Verified lesson

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€7.2M

Peak valuation

HypeCycle · MoatType · ResearchTags

Lolapps raised €4M before lolapps built its entire user acquisition and distribution model on facebook's viral channels, leaving it completely exposed when facebook tightened its platform policies. ended it. See the documented cause, verified lesson and all failure signals.

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