Startup Decoupling and Reckoning
blog.eladgil.com
blog.eladgil.com
Definitely some hot takes:
Shutting down and giving up is really hard. Founders may have spent many years of their lives on a company that is not going to work. But rather than spend another 2 or 4 years waiting for the bank accounts to drain through multiple layoffs and venture debt draw downs it might be better to accept reality and throw in the towel.
For a founder (and their employees), those 2+ extra years may be amongst the potentially most productive years of their lives. The opportunity cost of not going to work on something better is too high.
People do it all the time! But it’s usually called “a pivot”.
Just because the corp name stayed, doesn’t mean it’s the same startup :)
On the other hand, some failed founders get a chip on their shoulder and think that their failures were only due to external factors: Bad customers, wrong investors, a bad engineering team, etc. This mindset sets people up for repeat failure. You really have to understand why their business failed and what they’re going to do differently next time.
It also depends a lot on the economy. During the 2021 boom, I had several friends “exit” their failing startups via acquihires into bigger companies. One friend admitted that his total payout in the end would be less than if he had just kept a full time job during the duration of his startup, but now he gets to be a “successful startup founder with an exit”. In an economy like today’s, that’s not going to happen.
In my last shop, we had 8 (I think) former CEOs on staff. All made very significant impacts to the business.
If you are staring into the Valley of Death, remember that it is a valley, and you do come out the other side, and that makes you rare and valuable.