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Strong opinions, weakly held

Flat is failure

Anand Rajaraman says that any startup that’s not growing is dying, and that if a startup isn’t going to succeed, it may as well die quickly. It’s outstanding tonic for the Sequoia RIP: Good Times presentation that seems to have been absorbed by everyone in the Internet business. I would guess that in five years, very few of the startups that decided to hunker down and wait for better times will be around.

2 Comments

  1. I’ve experienced exactly the situation described in your ‘die quickly’ link. I’ve worked in two startups that were in zombie mode; one of them lasted for several years before the VCs finally had to close it down, the other was finally sold in a fire sale. It’s crazy.

    Of course, zombie mode is an effect, not a cause. Anand hits on the real problem here:

    Let me state at the very outset that this article applies only to venture-backed startups, which are a small minority of businesses in the economy. The sole purpose of most businesses is to create a steady income stream for their owners and operators. Venture-backed startups, on the other hand, are created with the sole purpose of leading to a meaningful exit for founders, investors, and employees. Such an exit might be either an IPO or an acquisition.

    I really don’t want to work at any more VC-funded companies for this reason. Such short-sighted management is just crazy.

  2. The not growing/dying idiom is not new; I had a CTO say that to me (verbatim) in 1995. He was arguably wrong then; massive overgrowth definitely contributed to the company’s three rounds of layoffs a year later.

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