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Demystifying startup failure

21 Jul 2021

Last month I took the excruciating decision of shutting down my company. The dissolution process is still ongoing, and at this point my only job is simply to sit and wait for lawyers and tax agents to finalize the process. This means I have a lot of free time in my hands these days, so I figured I’d take the time to write something here…

As an industry, we don’t talk about failure as much as we should. This is accentuated on this side of the pond, where failure is more stigmatized. I believe this is partly due to a lack of examples, because there is little incentive to share them. So here goes mine. The more failure stories are shared the more natural I hope startup failure will become. Hell, if it convinces just one person that failing is not as bad as it seems it will have already been worth it.

A bit less than 2 years ago, I quit the best job I had ever had at a company I could have only dreamt of working for. I had become obsessed with a particular problem I’d been extremely intimate with and suddenly I couldn’t see myself doing anything other than trying to solve it.

So I dived in. Interviewed potential users to validate it. Raised money. Assembled a team. Interviewed more users. Built a product. Interviewed some more potential users. Some used the product. A few loved it and stuck around, until I pulled the plug.

I like to think of startups as scientific experiments that attempt to validate — or invalidate! — a set of hypotheses about a market. In our case, as we iterated on our product and simultaneously tried to talk to anyone who could be remotely interested, I reached the conclusion that many of our most foundational hypotheses were fundamentally incorrect.

This is an incredibly hard realization to have, because in the world of startups it always looks like you’re one pivot away from winning. While this may be true, most of the time this is a mirage and the reality is that you’re stuck in a “carrot and stick” type of situation. Founders are naturally optimistic people who want to believe. But at the end of the day you have to let intellectual honesty prevail, or else you will find yourself in a rut for too many years without much to show for it. Particularly in the current environment, where capital is highly abundant.

Every startup is an attempt to challenge a particular status quo. Anything worth improving will take effort and patience to change. Give yourself the time to take a few meaningful swings at it. But also have the humility to acknowledge the risks. After all, I don’t know of any cause worth fighting for that is risk-free.

No matter the outcome, if you are really sure of doing it and go all the way, you are not going to regret it. I certainly don’t.