5 tech brands that lost customer trust (and went bankrupt)

The tech industry has had its fair share of complete failures. In fact, some might argue that right now the country is still going through one of those situations with the artificial intelligence boom. Everyone wants to be the creator or team behind a revolutionary product, but not everything is an iPhone.

From the dotcom bubble, cryptocurrency, and medical fraud to the simple inability to keep up with the times, there are a lot of corporate corpses to talk about. Some, like crypto firm FTX, are still hanging around amid a years-long bankruptcy. Others lost all customer trust and eventually closed their doors.

There’s never been a better time to examine the failures of tech history, then watch OpenAI and Anthropic spend hundreds of times more trust and money than failed companies. It’s a fascinating time, because the AI ​​bubble is bringing all these memories to the surface.

Originating from the Dot Com bubble but still relevant today, Flooz was a digital currency intended to be accumulated after purchases, which could then be exchanged for other products on participating sites. Whoopi Goldberg was the face of the TV commercials, and it seemed like everything was Gucci for Flooz.com. However, in 2001, following the bursting of the dotcom bubble and serious legal problems, the company closed its doors completely.

This would not have posed much of a problem if the Flooz points purchased or acquired had remained usable after the company closed. Any lingering Flooz points users had were now worthless, leaving many behind.

One group of people, however, did very well in 2001, better than any Flooz customer. According to the FBI, Flooz was used as part of a money laundering scheme by the Russian mafia. An organized crime syndicate had spent $300,000 of Flooz, combined with stolen credit cards, to acquire foreign currency. With that, coupled with the impending doom of the dot-com bubble and a massive outlay of at least $35 million in cash from venture capitalists, it all came crashing down pretty quickly.

Once the go-to place for all electrical needs, RadioShack closed its doors after years of estrangement from the company that made it what it was. By diverting its customer base to the lucrative mobile phone market, RadioShack ended up closing its doors in 2015, paying a high price.

RadioShack had a multitude of reasons for closing its doors, such as management issues, but by focusing almost entirely on cell phones, it found that in 2014, 50% of its revenue came from these devices. That figure quickly declined as the phone market changed significantly after the iPhone’s launch, with buyers choosing to get it through a contract with network providers, which ate into RadioShack’s business. With its original goal now reduced, RadioShack simply couldn’t survive in 2015.

The time when RadioShack was at the top was when it supplied personal computers, hobbyist electronics, and more. Getting into phones was a good idea at the time, but it was too dependent on that market. With the target audience now pushed back, it was almost impossible to survive in the modern market. After the bankruptcy, the assets were acquired by General Wireless, which also went bankrupt. Similar to the PC Gateway company, it is now operated by a completely different company, Unicomer Group, as an online brand.

A stunning case of customer deception, Theranos was not only a technological fiasco, but also a medical one. Led by Elizabeth Holmes, Theranos’ situation worsened after its prized technology, allegedly capable of performing extensive tests with just a few drops of blood, was found to be fraudulent. A medical journal raised the alarm after Stanford’s John Ioannidis published an article pointing out that no peer-reviewed papers or research had been done on the technology.

It got even worse: A tour of the facility by then-Vice President Joe Biden turned out to be a facade, hiding reality behind smoke and mirrors. As the situation began to snowball, the Wall Street Journal reported that its famous Edison blood testers were not being used; instead, regular blood tests were performed. Once the Food and Drug Administration (FDA) and other official agencies got involved, everything fell apart in 2018.

Both Walgreens and Safeway had agreements to install blood testers in stores, but after these details were discovered, Walgreens ended its relationship with Theranos. Safeway had a previous agreement, but it ended in 2015 after long delays and strange results provoked by executives. Theranos’ lies caused a loss of trust in the investment and business community and could have seriously endangered the public if disclosed.

A legal situation as complex as that of Theranos, FTX is perhaps one of the biggest tech scandals of the 21st century. CEO Sam Bankman-Fried committed massive fraud using the funds of users who had deposited money on the cryptocurrency exchange. Despite massive revenue, FTX found itself in a very long and confusing legal quagmire as it was unable to provide users with their money, leading to Bankman-Fried’s arrest.

Customers found they were unable to withdraw their money after a surge in withdrawals left a rather well-hidden $8 billion financial hole incredibly exposed. This was prompted by revelations that a trading company affiliated with FTX held huge amounts of FTT, the FTX token used on the exchange. For the sake of brevity, the token only had value as long as people believed in it. It had no monetary value at the time of its conception, and with this other company holding just as much, it called the whole structure into question.

With so much uncertainty surrounding the company and the value of the token, this ultimately led to a massive sell-off, pullback, and then continued bankruptcy of FTX. It didn’t help that Binance also sold all of its holdings in FTT in 2022. Since then, FTX has been in a state of permanent bankruptcy, with the current CEO having expertise in fund recovery.

Part of the initial segment of wearable artificial intelligence devices, Humane’s AI Pin was supposed to be the next step in the AI ​​revolution that had been continuously launched since 2023. As soon as it arrived in 2024, critics lambasted it for its failures. The Verge said it was like “wishing on a star”, in the sense that you just had to hope it would work as expected. As of 2026, all purchased AI pins no longer work, as the entire product was destroyed from orbit.

Humane’s pitch for the AI ​​Pin was that it would be a useful assistant throughout your day. The trust the company had built during the lead-up to the product launch suddenly disappeared. It was a fundamentally broken device, incapable of performing even some of the most basic tasks or pronouncing words or names correctly, like Beyoncé.

We say “informally” because Humane has never officially gone bankrupt. It actually took the lead in suspending sales of the device, disbanding teams, ending support, and even killing the entire device. The rather useless Rabbit R1 remained active, despite failing at the most basic tasks expected of it. HP acquired what was left for $116 million. All people remember for now is that it’s another failed product among the AI ​​industry’s mountain of past and future failures.