Brooklyn, New York-based Ordrx was an innovative and wildly popular restaurant ordering platform. Venture capitalists including Google Ventures invested in the company. Ordrx customers were building their businesses on top of Ordrx, and business was booming.
That is until Ordrx was sued by a non-practicing entity (aka, patent troll).
Despite the fact that the case was meritless, the lawsuit scared away new investors, which meant cutting staff. Eventually, Ordrx was forced to shut its doors, leaving hundreds of companies scrambling to find a new vendor with no notice.
This story is not unusual. A quick search for "startups that went out of business because of lawsuits" reveals hundreds in just the past year.
Lawsuits are a cost of doing business, but the one common thread among all of these post-mortems is that the startup didn't provide their customers with much notice.
Don't become a casualty of another company's litigation. Watch your vendors, monitor their lawsuits, get ahead of the risk.