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Why Startups Die

techfounderstack.com

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Re: Why Startups Die

#51

Post by makle »

bhouston wrote: post #10

This seems to miss diagnose the issue as suicide but really the startup wasn’t having success. If the company isn’t making money, then yes you run out of runway, you get founder conflicts etc. Saying this is suicide is missing the point. If you are failing giving up is sometimes the right option. Many startups are based on assumptions/predictions that turn out to be wrong. And it is hard to pivot if you’ve spent the…

Totally agree that sometimes shutting down is the right call, not every startup should survive, and plenty of ideas simply don’t work once they hit reality. The point I was trying to make isn’t that failure = suicide, but that many teams collapse before they’ve fully tested whether the idea works.

And fair feedback on the writing style. Appreciate you calling it out. I am not a native speaker, so I definitely used AI to help me formulate my ideas & opinions.

Re: Why Startups Die

#52

Post by makle »

zwnow wrote: post #6

There's a huge difference in startup cultures too, I noticed the European regions are more focused on organic growth while US startups tend to aim high. I've been a solo dev in a startup with like 4 people for little over a year now, the business exists since 2 years and we are somewhat even on expenses vs income now. Growth is pretty slow, but as long as we break even its been pretty good.

The cultural difference is massive. In much of Europe, breaking even early is seen as healthy and responsible. In the U.S., the mindset is more “swing big or don’t swing at all,” which pushes teams to chase hypergrowth long before the business is stable.

Neither approach is inherently better, but they create totally different failure modes. Slow, steady growth can keep a company alive for years.

Re: Why Startups Die

#53

Post by makle »

ktallett wrote: post #36

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 chan…

A lot of startups get built around hype instead of a real problem. When the buzzword fades and the funding dries up, the company suddenly has to stand on its own legs, and many can’t.

Growing fast without a solid solution underneath is a dangerous combo. If you’re not solving a real, painful problem for someone, no amount of funding or storytelling will save you.

Re: Why Startups Die

#54

Post by anovikov »

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…

Why do you say pre-2020? 2020-2021 were the easiest times ever for funding with a lot of money-printing and zero rates (unlike 2018-2019!). Only in 2022 things started to get worse, and ground to a halt, at least for everyone outside of the AI bubble, from 2023. Now all who i know who are still operating, do so simply with the money raised before. Companies are going belly up left and right simply because that money runs out.

Re: Why Startups Die

#55

Post by paddleon »

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…

Congrats on your good fortune, and agree with your diagnosis.

Does it work the other way? If the company isn't growing, do you close it? When/how do you decide this? What if the growth is just around the corner if you just solve this just one more thing?

Re: Why Startups Die

#56

Post by coffeebeqn »

pedrozieg wrote: post #15

A lot of this “startups commit suicide, not homicide” framing feels like it pathologizes what is often a rational choice. Most founders don’t “give up” in some moral sense, they just run out of personal runway before the company produces enough evidence that the sacrifice is still worth it. Cash runway is visible on a spreadsheet; emotional runway, health, relationships, and opportunity cost aren’t, but they’re just…

Calling it suicide is assuming that most startups shouldn’t fail of “natural causes”. There’s nothing bad or unnatural about a startup not being viable. It’s not like every company can be viable just by sacrificing a bit more for a bit longer

Re: Why Startups Die

#57

Post by coffeebeqn »

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).

Opportunity cost is very real. Chasing the wrong thing for 5 years can leave you broke instead of pocketing 7 figures gross elsewhere

Re: Why Startups Die

#58

Post by lnsru »

rawbot wrote: post #14
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…

What do you mean by "radar" data? Literal radar? Or am I missing some more specialized term?

Texas Instrumens multichannel radar. Devkit at the moment. Custom hardware later.

Re: Why Startups Die

#59

Post by ytwySXpMbS »

makle wrote: post #49
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 goo…

Why have you wasted both my time and yours by posting replies clearly written by AI that add nothing to the discussion and only restate what the parent comment has said? Infuriating.

Re: Why Startups Die

#60

Post by cjrp »

ChrisMarshallNY wrote: post #42
brianhama wrote: post #40

Earlier quoted context omitted.

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 the…

I guess the problem is what if your competitor does take on that debt, and uses it effectively to put you out of business. Whether the competitor survives much beyond that is immaterial if your company has already closed.
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