Isn't this a risk with apps in general, not just VC backed ones? I skimmed the blog post and it sounds like they had a hard time monetizing the product. That could happen with a bootstrapped project too: someone builds something cool in their spare time, launches it, gets enough users to spend more time on it for a while, then realizes it's too hard to monetize or they want to work on something else or whatever and shuts the project down.