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Why Startups Die

techfounderstack.com

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Re: Why Startups Die

#31

Post by makle »

OtherShrezzing wrote: post #5

I think this article is "why startups died pre-2020", rather than "why startups die [now]". Lots of this article relates to the reasons startups died when cash was freely available - both from VCs and from the markets you were trying to find product in. For example, if you started an online learning company in March 2020, you'd have hit product right away (along with a thousand competitors), and been lathered with ca…

Interesting opinion. Perhaps it's because I am a founder pre-2020 and lots of my thinking was shaped around that. What else do you think changed post-2020?

Re: Why Startups Die

#32

Post by makle »

grandiego wrote: post #22

Of course almost all startups expect a long live, but strategically it may be better (for the founders) to close when the fundamental assumptions are no longer valid, in order to do a future clean restart in a brand new endeavor (usually after a detox period).

Agreed. I think building a startup should also rather have a fast failure in case it doesn't work out. I've seen friends trying for several years, only walking away in the end with almost nothing.

Re: Why Startups Die

#33

Post by ktallett »

lnsru wrote: post #8

I had some savings during the pandemic and I needed to choose between down payment for a house or fund my patient monitoring venture. I had contact with few care home chains and very positive feedback and even agreement for a test run. I was pussy and went for a home. Couple years later no semiconductor parts were available anymore and I was super happy with my cautious decision. I heard of few hardware ventures, whi…

It sounds similar to devices that are being tested trying to keep addicts safe.

Re: Why Startups Die

#34

Post by makle »

mjg2 wrote: post #26

There are some good nuggets of wisdom here, and I think the author should be less crass about "startup suicide"-- it's just an organization and it failed. If someone outside of the founder team is calling it a suicide, they need to go touch grass. SV VC's are so dramatic.

Feedback taken. If for sure helps making people more likely to click! haha I hope you forgive me that!

Re: Why Startups Die

#35

Post by ktallett »

jakewins wrote: post #28
dalemhurley wrote: post #19

9 out of 10 startups fail? Where is this statistic from? Every single I see this troupe repeated I wonder why people don’t question it.

These are, as far as I know, well tracked datasets. For the US the Bureau of Labor statistics tracks each annual cohort of new companies and the attrition over time: https://www.bls.gov/bdm/us_age_naics_00_table7.txt So for example the first chunk there, cohort of companies that started March 1994, there were 13% still operating 10 years later in 2024.

30 years later....

Re: Why Startups Die

#36

Post by ktallett »

Many are gambles, many are funded by those who know buzzwords but not the actual market or viability. Once that funding runs out, often the buzzword has moved on to something new so no more funding can be gained. You have to find a way to make money without funding in that period. The key issue is trying to grow too fast with too few solutions. If you can solve a problem for people then that is giving you a good chance of survival.

Re: Why Startups Die

#37

Post by makle »

asim wrote: post #4

I never thought I would fail. For 7+ years I think that's what drove me. Then things changed. Life changed. They attribute it to burnout and often that is the case, but you have to also factor in life and motivation changes. If the success doesn't come soon enough, you start looking towards other things, other aspects of life, if I may even say, more rewarding and real parts of life. Startups are a microcosm of what…

I somewhat failed my last 2 startups as well. None turned into a huge success. But the friends along the way and the contacts sticked. I think the most important thing is that you learn from those failures and improve for the next one!

Re: Why Startups Die

#38

Post by ChrisMarshallNY »

I'm wondering if the culture of an "exit plan" may be a contributing factor.

I grew up in a world, where companies were supposed to be ongoing concerns, with no end in sight. You established a company, and worked towards achieving at least an equilibrium, if not growth. Most brick-and-mortar companies are like this. The focus is on the product/service provided by the company, and all efforts are devoted to maximizing efficiency and steady profitability. Plans are made with a long view, as the company needs to be around to support their product. I know a lot of folks that own/run standard companies. None of them want to sell the company (it does happen, but it's an unusual thing; usually around the time they want to retire).

A standard company might consider an IPO to be their "exit."

Tech companies seem to have the company as the product. They have a plan to "exit," i.e. sell the company. That means they work on making the company, itself into an attractive package, and their product/service is simply a tool to maximize the company's attractiveness. In this case, descending into debt, in order to make the company look good in the short term, makes sense.

I could see this resulting in a situation, where the product made by the company is doing OK, but the company is not succeeding in being sold, so is considered a "failure."

Re: Why Startups Die

#39

Post by mjg2 »

makle wrote: post #34
mjg2 wrote: post #26

There are some good nuggets of wisdom here, and I think the author should be less crass about "startup suicide"-- it's just an organization and it failed. If someone outside of the founder team is calling it a suicide, they need to go touch grass. SV VC's are so dramatic.

Feedback taken. If for sure helps making people more likely to click! haha I hope you forgive me that!

I try to separate the art from the artist when critiquing, so no bones to pick :)

As a topic or metaphor, I'm not advocating for suicide to be avoided, but your post struck on the toxic bravado that VCs have, especially Silicon Valley VCs with their Drama, and why I am much much more selective on fundraising for my projects.

People talk about "finding the right founder" but really it's finding the right environment to perform and excel in. The culture from SV is almost Swiftian in how it tries to devour its young. And yet creatives get "oh it's my fault for picking the wrong copilot" from the experience.

Re: Why Startups Die

#40

Post by brianhama »

ChrisMarshallNY wrote: post #38

I'm wondering if the culture of an "exit plan" may be a contributing factor. I grew up in a world, where companies were supposed to be ongoing concerns, with no end in sight. You established a company, and worked towards achieving at least an equilibrium, if not growth. Most brick-and-mortar companies are like this. The focus is on the product/service provided by the company, and all efforts are devoted to maximizing…

A start-up needs to have an exit to pay back investors. A company that isn’t hoping to exit is just a lifestyle business. Both are valid options, but very different tactically.
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