Ask HN: Examples of startups that failed due to moving slowly?

Discussion on a previous thread also suggests that Fogbugz suffered the same fate due to growing slower than Atlassian: https://news.ycombinator.com/item?id=920668

Your question is hard to answer, though, because it depends on where your funding is coming from. Part of your pitch for your business probably included an exit plan (if it didn't, then you should probably figure it out now). You need to get your business to wherever it needs to be to deliver that exit plan. Now you work backwards. What conditions need to be met to make that exit work? For a business that is built mostly on technology, what do you need to have in place to meet those conditions. Then you need to allow time to iterate your development because I can pretty much guarantee you that whatever you think you need now is almost certainly wrong. So you need to deliver early enough to allow yourself time to figure out what is wrong about it and what you need to do to make it right.

I've been in this industry long enough (and been with enough startups) to say that most founders don't understand what they are doing to the extent that they can make a coherent plan. Therefore they simply push to move as fast as possible and "pump out features". This is not necessarily a bad strategy if you are good at reacting to failure and adjusting your plan accordingly. The faster you fail, the more time you will have to discover what will succeed.

This strategy will only work for so long, though, and you need to be able to change your strategy at the correct time. This is very difficult and my experience tells me that most people get it very, very wrong. Sometimes even if the founder can do it, the people they hire to search the solution space (by banging out features one after another) are incapable of building a coherent product. To off-set this problem some startups adopt a demo-only strategy. Their goal is to build a disruptive demo and get bought out by one of the big boys (and probably buried). They have no intention of actually building a viable product. This can actually work well, depending on the prevailing economic environment and how scary you can make your demo.

If you want to build a sustainable business, though, my suggestions is to avoid the "pump out features" track (and the developers who are good at only doing that). Instead build more slowly with very strategic experiments and a very flexible code base (along with programmers who have experience building real products this way). If you can find the programmers who are able to do it, then you should have a higher rate of success. The "if you can find the programmers who are able to do it" part may be limiting, though. You may be forced to go the "bang out features and react to failures" route.

One was a search engine ahead of google in its category that would have been an ideal google acquisition target (in fact, google is still doing a poor job in their area of search.)

Another was a company that invented a key gaming technology, but was ahead of the market by a couple years.

In both cases the VCs forced them to make compromises to to the product to chase the current fads... rather than invest in the parts of the product that their customers wanted (and would have paid for.)

Both companies had identified markets that would be extremely fast growing and are today worth many billions of dollars, and in both cases, to date no company has really done what they did.... though the market has shifted to get by without them.

VCs focus on growth because it benefits them. Finding the market and addressing it benefits the company. IF the timing is off by a couple years, then its "too late" for the VCs. This was the case even though it was obvious that there was a massive market coming-- in both of the above examples, the hockey stick had started.

VCs would apparently rather have a $30M valuation in year 2 than a $1B valuation in year 6. The VC funds last 5 or 7 years, if I recall.

What you are really asking is it possible to workout in real-time (no hindsight) what the optimal growth rate should be for each company and if this is always “as fast as possible”. This is very hard question to answer. My feeling is the optimal is more often than not close to the “fast as possible” level, but it will depend on the company and industry.