David Byttow, the founder of anonymous sharing app Secret, plans to return money to investors in the social media startup as he closes down the service, which gained notoriety for allowing users to make anonymous comments to friends and nearby people.
Byttow announced in a blog post on April 29 that he and the company's board had decided to shut down the service just 16 months after its launch, with plans to wind down the business "gracefully".
"This has been the hardest decision of my life, and one that saddens me deeply," said Byttow in the post. "Unfortunately, Secret does not represent the vision I had when starting the company, so I believe it's the right decision for myself, our investors, and our team.
"I will spend the next couple of weeks doing what I believe is right to wind down Secret gracefully. While a majority of the team has already moved on to other exciting opportunities, I will dedicate most of my time to helping the core team find their next roles," he said.
While it is not clear how much of the $35 million the company raised from investors will be returned to its backers, Byttow said that it had a "significant amount" of invested capital that would be paid back.
"Our investors funded the team and the product, and I believe the right thing to do is to return the money rather than attempt to pivot," he said. "Innovation requires failure, and I believe in failing fast in order to go on and make only new and different mistakes."
Although Byttow indicated that over time, he plans to "publish post-mortems" of the company's demise in order for others to learn from its mistakes and challenges, he made no mention of the flak the company had received over the platform's capacity for users to bully others online with anonymity.
However, he hinted that the anonymous nature of Secret had drawbacks as well as benefits, with one feature on the platform allowing users to log in with Facebook and share with friends without revealing their identities.
"I believe in honest, open communication and creative expression, and anonymity is a great device to achieve it," he said. "But it's also the ultimate double-edged sword, which must be wielded with great respect and care. I look forward to seeing what others in this space do over time."
Last year, when it announced a round of funding, Secret said it was aiming to expand as a social network connecting Facebook friends.
At the time, the market value of Secret was estimated at $100 million.