I've seen it a number of times. The company would rush to build a prototype, the product would be broken but looked like it's almost ready. Then the cost of engineering would grow and it would become harder to hire people. In some cases, the company had existing customers who were promised new features, so there was no time to fix the underlying issues, and they had to be built on top of. This cycle would repeat.

One might look at these companies and say that they are "successful" because they employ people, and some might even sell in the 7-figure range. But looking closely, each of the employees at the company could be more successful working for another company, where they don't spend their time firefighting, and instead focus on up-leveling their experience.