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Why Startups Die

techfounderstack.com

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Re: Why Startups Die

#41

Post by markdjacobsen »

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…

My own experience presiding over startup failure was excruciating. I had a serious personal breakdown that took a couple years to recover from. There was the burnout, but also a deep sense of guilt, weakness, and personal failure. Articles like this can inadvertently heap on guilt, insinuating that a founder "stopped trying" or "lost heart", as a if a better or stronger soul might have prevailed. But sometimes, closing the doors is the right thing to do.

For other failed founders out there... I found very few resources that could help me navigate the aftermath, so I wrote the book I wish I'd had. It's a passion project, so I give it away for free. It's titled "Eating Glass: The Inner Journey Through Failure and Renewal."

Amazon/Audible link: https://www.amazon.com/Eating-Glass-Journey-Through-Failure/...

Free copy: https://www.dropbox.com/scl/fi/arauyfnkwwezbbk0cbvdp/eating-...

Re: Why Startups Die

#42

Post by ChrisMarshallNY »

brianhama wrote: post #40
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.

Maybe, but all businesses begin as "startups." I guess getting a lot of outside financing is a big deal. Most companies that I know, don't get investors, until they are a going concern. They usually have a bank loan, to start (which can be burdensome).

I used to work for a 100-year-old Japanese corporation. They absolutely refused to go into debt, or seek investors. It could be challenging, getting them to loosen their pursestrings.

But they survived depressions, recessions, and even being bombed in WWII. They had a massive implosion, a few years back, that would have killed most companies (it resulted in me being laid off), but it looks like they are getting their feet under them again.

Re: Why Startups Die

#44

Post by dig1 »

brianhama wrote: post #40
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.

> A start-up needs to have an exit to pay back investors

It depends on the kind of investors you want to attract for your startup. Some investors are interested in building a slow-growth, long-term, stable company, while others prefer a higher-risk approach and will expect fast results. IMHO choosing the right kind of capital is just as important as focusing on the product.

Re: Why Startups Die

#45

Post by bhouston »

ryanSrich wrote: post #24

4x founder with 2 exits. The only time conflict arose or I felt like giving up was when we weren't growing. Growth and sales can heal just about all wounds (not all, but just about all). These types of articles always seem to point out the symptoms, and not the cause. The symptom of wanting to give up is because you aren't growing fast enough The symptom of founder turmoil is because whatever strategy you're currentl…

I agree. Growth solves all. It give you money to throw at problems, raises to keep people happy, and motivation. When there is no growth, that is when things fall apart.

Re: Why Startups Die

#46

Post by makle »

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…

You’re right that the underlying incentives are very different. Traditional businesses are built to last, so the focus is naturally on steady profits, good operations, and long-term customer value.

In tech — especially with VC money involved — the company itself becomes the product. An exit isn’t a nice-to-have, it’s the model. That pushes founders toward growth over profit and narrative over durability.

It doesn’t mean tech companies are “fake,” but it does mean a startup can look busy and promising while still drifting toward failure if the long-term fundamentals never arrive.

Some of the strongest startups today are the ones that intentionally step away from that exit mindset and build for resilience instead.

Re: Why Startups Die

#47

Post by asim »

markdjacobsen wrote: post #41
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…

My own experience presiding over startup failure was excruciating. I had a serious personal breakdown that took a couple years to recover from. There was the burnout, but also a deep sense of guilt, weakness, and personal failure. Articles like this can inadvertently heap on guilt, insinuating that a founder "stopped trying" or "lost heart", as a if a better or stronger soul might have prevailed. But sometimes, closi…

Yes, personally I think this idea that our identities are defined by careers, job titles or being a founder is inherently very dangerous. So when it all falls apart, who are you? It is very dangerous. We need to stop evangelising this way of thinking and try to be more holistic about it. Life before startups, tech, etc was not defined like this. Yes people's last names were effectively the work they did, but the whole of your identity was not wrapped up in something that could disappear in an instant. Or something we have effectively infatuated as a real necessity. The reason so many of us fail is because we're building things nobody needs. Maybe that's harsh but I have to ask myself, if I didn't build go-micro.dev, would something else have existed to replace it, yes, wholeheartedly yes. My contribution to software is not that significant. If Google didn't exist, would something else exist, Yes, it would.

We have to look at the world differently. OK there's Elon with his effed up childhood and maniacal need to "save humanity" but when you really get down to it, he falters at the simplest questions about life. This man doesn't know what's real and what's not. Let's be clear, those we follow are just human and often what gets them to where they are, while its hard work, if it wasn't them, it would be someone else and those people would be just potentially in the right place, at the right time, and sacrificing things that maybe we shouldn't sacrifice. Life went on long before tech and it will continue long after tech.

Re: Why Startups Die

#48

Post by makle »

lizknope wrote: post #29

I worked at 2 startups. Both failed. The first had been around for about 4 years when I joined and had products that made money. They were trying to get acquired. They had partnered with 2 companies making products specifically for them. One of them offered to buy the company for $30 million but the founders thought their company was worth $300 million. They said no and then money started to run out and people starte…

These are perfect examples of how misaligned expectations can quietly sink a company. In both cases, the teams actually had something: revenue, interest, real offers. But when the founders anchor on a fantasy outcome, they stop making grounded decisions.

You can survive almost anything in a startup except delusion about what the company is worth. Turning down a realistic exit, or holding out for a number that only exists in your head, creates a slow death spiral: morale drops, talent leaves, and eventually the market decides for you.

Really appreciate you sharing these — they highlight a pattern that happens far more often than people think.

Re: Why Startups Die

#49

Post by makle »

BirAdam wrote: post #27

In my experience writing tech history, the most common reason is money. The second most common reason is entering a crowded market with little differentiation. The second reason could have been solved by marketing, but many in the industry are allergic to marketing. If you are building a better , this must be heavily and clearly marketed. Otherwise, people have zero reason to switch. Why mess with what's working? Add…

I think you’re spot on — money and differentiation are the two cliffs most startups fall off.

A lot of founders underestimate how hard it is to get someone to switch to a new product. Unless you’re 10x better in a way that’s obvious, people stick with what already works. And as you said, being cheaper rarely moves the needle once something is in production.

The allergy to marketing is real too. Many teams think a good product will “speak for itself,” but in a crowded market, clarity and distribution matter just as much as the tech.

Your observations line up with what I’ve seen as well.

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