I've also been tracking the 'path to graveyard' for the startups from the last 3 years here https://pivots.fyi/
YC Graveyard: 821 inactive Y Combinator startups
211–220 of 238 posts
Re: YC Graveyard: 821 inactive Y Combinator startups
#212Earlier quoted context omitted.
Sure it is. If your business nets 3 million a year, it takes 5 people to run it, and your customer base is steady, that's lifestyle. Sucks for investors, pretty nice for you if you can keep it running.
In other sectors that's just called a "small business" and celebrated as the fullest expression of the American dream. I've always found it funny that tech treats the idea of a going concern with such distaste.
Other sectors are filled with far fewer people with low empathy for other humans.
Not none, of course. It's just not a near-requirement.
Re: YC Graveyard: 821 inactive Y Combinator startups
#213Earlier quoted context omitted.
I imagine some of the themed restaurants in Disney cost at least that much.
A themed restaurant at Disney isn't exactly a small business...
Depending on the restaurant, those may not be independent businesses at all - they may just be one of the attractions at the park.
Re: YC Graveyard: 821 inactive Y Combinator startups
#214Earlier quoted context omitted.
Worse than becoming lifestyle company is becoming a zombie startup. Zombie is when founders get rid of almost everyone except what they need to give the impression of effort, do little work, but draw an income and slowly spend down the money they raised until it’s gone. I was one of the very few survivors at a startup that turned into a zombie in 2020 (went from 100+ employees to 10 in a matter of weeks). In some way…
IMO that’s not a zombie because it has an expiration date (when the money raised runs out). A proper zombie is a lifestyle company without the lifestyle — enough revenue to maintain an eternal startup crunch and trying to make a product work, but without the resources to actually grow. Doesn’t die, doesn’t quite live.
I’m honestly not sure what it is.
Hindsight is 20\20, the company probably would have been better off thawing itself until lockdown ended then going right back to what it was doing (that’s what their main competitor did, and while rumors of their demise always abound, externally they’ve grown and raised more rounds).
One of the founders is a niche big-shot in the VC world and well connected. I assume eventually they’ll be acquired for an undisclosed amount of $0. It’s been a year since I left and until this post I’ve been shocked it’s yet to happen. Now I wonder if they are waiting until they payed out all the money they raised as salary to play that card because otherwise they need to give the money up for no real benefit other than continued employment.
Re: YC Graveyard: 821 inactive Y Combinator startups
#215I've also been tracking the 'path to graveyard' for the startups from the last 3 years here https://pivots.fyi/
this is very interesting!
though i noticed some outdated info for most companies (last updated >2 months ago).
Re: YC Graveyard: 821 inactive Y Combinator startups
#216Re: YC Graveyard: 821 inactive Y Combinator startups
#217There are not just startups that become unicorns and startups that fold. Investors' worst nightmare is if you just make enough money to keep going, but you don't grow ("lifestyle business" as they use it is a derogatory term). That's because they prefer a sudden death where they can write down the investment and deduct their loss from taxes than an investment where they never see any money again. And then there are "…
"Investors' worst nightmare" seems very off. Most SAFE notes give you dividends that are on par with how corporations issue dividends. Assuming there is cash flow, you should be getting dividends. If the dividends are so low that you will never be reasonably paid back you can often negotiate to get out in some form. Very low cash flow only with no growth seems to be the only exception...which I'd guess would only exi…
> Very low cash flow only with no growth
This is very typical in startups, where making revenue at all may be rare in many categories (social media for example), and a startup is either wildly successful or nobody uses it.
Hopefully, the startup is about to be wildly successful, but it's easy to end up in a situation where some funding was raised, the product has reached a dead end, but the founders continue to "try to make it work". Whether they are doing this to "draw a salary", are earnestly trying to make it work, or a little bit of both, there isn't much legal recourse for investors if they aren't doing anything worse than not being very successful.
Re: YC Graveyard: 821 inactive Y Combinator startups
#218“Better to have launched and lost than never to have launched at all”
Spoken like someone that uses other people‘s money. I think the statement would be different if it was their own money being lost for the startup or interest rates weren’t 0%.
Re: YC Graveyard: 821 inactive Y Combinator startups
#219The list is missing stock trading platform Cera. These clowns were absolute scammers with a buggy app and zero customer support.
Why do you say were? The site still seems active?
Founder sent out service shutdown email back on December 30, 2024. I guess they're too lazy to update their website.
Re: YC Graveyard: 821 inactive Y Combinator startups
#220Earlier quoted context omitted.
Generally the ones that don't sound useful do better. Why Stripe? Why Airbnb? Why Twitter? There's less competition and winner takes all.
How do stripe and Airbnb not sound useful? "Need to get paid" and "find accomodation" are among the oldest business models on the internet.
Paypal was dominant then. Stripe was PayPal with simpler onboarding.
Airbnb is a favorite textbook example of VCs being wrong. They were rejected early on because people were thinking it's risky to rent out your house to strangers, and well, motels exist. But I think that's always been a blind spot with VCs - they just don't understand what it's like to be broke. Airbnb pivoted quite a bit from what made them big; they used to have top tier hosts and hospitality for much cheaper, now they're just alternative motels with no free breakfast.