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Worth noting that the proximate cause of death is often times largely uninformative as to why the startup actually failed. Most failed startups fit into the fo

Worth noting that the proximate cause of death is often times largely uninformative as to why the startup actually failed. Most failed startups fit into the following timeline: was burning more money than it was making => failed at raising more money => did a round of layoffs / cost cuts to get economics under control => couldn't right the ship and shut down / did a fire sale or acquihire But, the above timeline doesn't teach you much about why the company really failed. The real answer almost always involves a multitude of contributing factors, and requires intimate knowledge of the startup's business. For the most part, the only reliable source for this type of information is one of the founders, board members, or (sometimes but not always) c-level execs. And, even then, they have to be willing to be vulnerable (which is very rare). If I could give some advice to Failory, it would be to think about how you can incentivize founders to share their stories. As it stands, they have little to gain and potentially a lot to lose (e.g. being labeled one of YC's "biggest failures")

sjtindell 6y ago
As a relative outsider, I would hope being labeled as one of the biggest failures would be a mark of experience among a set that claims or claimed to uphold the “fail fast” mentality and treats failure like the learning experience it is.
- ZephyrBlu 6y ago
  "fail fast" refers to experiments, not the whole damn company.
  - majormajor 6y ago
    A new company is almost by definition an experiment.
  - derekmh 6y ago
    Especially when peoples’ lives depend on it.
- mathattack 6y ago
  In Walk Street if you have a $50 million blow-up your career is shot. If you have a $500 million blowup you get a second shot because you must have been somebody to be trusted with that much money.
dcolkitt 6y ago
> But, the above timeline doesn't teach you much about why the company really failed. I for one would like to see this table with the founders' average email response times. https://news.ycombinator.com/item?id=19375483 https://news.ycombinator.com/item?id=19375483
- jjoonathan 6y ago
  I'm sure the trend generalizes, but I'd be wary of cargo-culting it because a number of simple and plausible explanations put the causality arrow firmly in the other direction. Failure isn't fun to share, failure implies a need to re-think and strategize, failure means you can't delegate enough of your responsibilities to specialize in appearing quick and decisive to your investors, failure means you aren't in the startup circle anymore and aren't looking to cultivate your relationship with Sam Altman, and so on. Any one of those effects could singlehandedly create the observed trend without implying that quick response times lead to healthy businesses.
- irjustin 6y ago
  That's actually pretty awesome. Of course, it's more of a symptom that is an emergent property than a root cause. Like saying every top tennis player uses $$$ rackets - so if I use $$$ rackets, I'll be a top tennis player. If people knew Sam Altman judged companies more positively by their response times which resulted in more funding, that's a metric just begging to be gamed without actually making the business better.
  - hn_throwaway_99 6y ago
    As someone who is generally a "slow responder", I'll guess at the root cause. My guess is that being a slow email responder is correlated with (a) higher propensity to procrastinate, (b) general indecisiveness and (c) lower self-esteem, all of which are not hard to see why they would negatively impact business success. Of course, I could just be projecting, but when I am slow to respond to an email, it's usually because I want to overthink the response, or that something about writing the response is generally uncomfortable so I practice avoidant behavior (same thing feeds into procrastination). That root cause trait has proven very inhibitory for me achieving my goals.
new_realist 6y ago
Most startups fail. I don’t think most founders have the acumen to really know the full story of their own failure.
- gibolt 6y ago
  There is a difference between knowing the difference and admitting it. When you run a business from start to scale, you likely know the main failure point, and it is probably a few simple variables.
  - andi999 6y ago
    Well the answer is probably in 95% of the cases 'not enough sales', but it wont tell you anything. Also I believe even in hindsight you dont know what was really the problem (in the sense that you know what could have been done to make it succesful)
    - mdorazio 6y ago
      Not sure I agree with that. Most astute founders can tell you pretty accurately why they didn't achieve enough sales to offset costs, they're just unlikely to do so for strangers because it usually means admitting at least some amount of self-fault. I know I can give a shortlist for my own failed businesses that's a lot more detailed than "not enough sales".
      - andi999 6y ago
        Yes, but is the list really true (in an objective sense). I mean why didnt you act on it, or why was it only know afterwards. (Of course the list might contain a lot of unchangable items, but this would mean the startup was impossible)
        fuzzfactor 6y ago
        One of the real bad ones is _more sales wouldn't have helped anyway_.
wtvanhest 6y ago
Probably be much more informative to talk to non-c-level employees who do not have an incentive to modify the story.
- LysPJ 6y ago
  Perhaps. There is the danger that those employees aren't party to all the relevant information, so their version of the story might be inaccurate too.
avip 6y ago
My experience (N=3) is startups "fail" mostly because the answers to "can this work" and "will people buy it" tend to be "yes", "maybe" and "no".
dustingetz 6y ago
no explanation is needed for joe founder failing to achieve a $1B outcome. Better to ask why the few succeed and the answer is usually one that could not have even been foreseen.
- jonathankoren 6y ago
  Not really. That’s a definition of survivorship bias. The answer many times comes down to luck. https://theconversation.com/huge-success-in-business-is-largely-based-on-luck-new-research-130843 https://theconversation.com/huge-success-in-business-is-larg...
ChuckMcM 6y ago
One of the best talks I had was a two hour discussion of this very topic with John Walecka. John had invested in Freegate and we were discussing risks and why things failed. He helped me understand both the concept of 'stacking risk' (where the startup is taking on more unknowns than it should) and 'over burning' where a startup attempts to hire itself into shortening its schedule which not only fails but exhausts needed capital. To this day I never hire an engineer if I cannot write down EXACTLY what they will be working on and how it will help the schedule. Even if they are a "super star", if I don't have something for them to do that will check off things that are currently on the path to the next milestone, no offer. Whenever I've watched over hiring from inside or outside it tends to end badly.
- vishnugupta 6y ago
  > Whenever I've watched over hiring from inside or outside it tends to end badly. I can relate with this. I first saw this phenomenon play out twice within a large FAANG company where the leadership wanted to ship an immensely complex product fast by throwing people and so over hired. Both products failed miserably. And the I saw a repeat of this at the entire company level. The extent of over hire was immense, fueled by cheap investor money and their push to grow-at-all-cost. The company is now just barely managing to survive, after a few rounds of layoffs and pivots. Over hiring is a huge red flag from the long term success perspective. However, as an individual, if you get in early on in the cycle and play it well you will rise very fast in the org chart. I’ve seen a few do that consistently. Good for them I guess.
  - thewarrior 6y ago
    The two are connected. Over hiring is done on purpose to game promotions. In startups for funding. Depending on the timing and where you are in the hierarchy it can go either way. People switch every 2 years now so it’d doesn’t matter how the team does in the long term.
duxup 6y ago
Also...it's possible nobody knows. You might have some obvious situations that were big issues, but I'm not sure reason for a business failure (sometimes even success) is always obvious.
euske 6y ago
Looks like a universal pattern across different domains: an immediate cause of human death is usually different from the long-term cause of their health deterioration. Similarly, an immediate cause of crash is typically different from the root cause of the problem. But is there really such a thing as "a root cause"? I guess we can always look deeper.

sjtindell 6y ago

As a relative outsider, I would hope being labeled as one of the biggest failures would be a mark of experience among a set that claims or claimed to uphold the “fail fast” mentality and treats failure like the learning experience it is.

ZephyrBlu 6y ago
"fail fast" refers to experiments, not the whole damn company.
- majormajor 6y ago
  A new company is almost by definition an experiment.
- derekmh 6y ago
  Especially when peoples’ lives depend on it.
mathattack 6y ago
In Walk Street if you have a $50 million blow-up your career is shot. If you have a $500 million blowup you get a second shot because you must have been somebody to be trusted with that much money.

dcolkitt 6y ago

> But, the above timeline doesn't teach you much about why the company really failed. I for one would like to see this table with the founders' average email response times. https://news.ycombinator.com/item?id=19375483 https://news.ycombinator.com/item?id=19375483

jjoonathan 6y ago
I'm sure the trend generalizes, but I'd be wary of cargo-culting it because a number of simple and plausible explanations put the causality arrow firmly in the other direction. Failure isn't fun to share, failure implies a need to re-think and strategize, failure means you can't delegate enough of your responsibilities to specialize in appearing quick and decisive to your investors, failure means you aren't in the startup circle anymore and aren't looking to cultivate your relationship with Sam Altman, and so on. Any one of those effects could singlehandedly create the observed trend without implying that quick response times lead to healthy businesses.
irjustin 6y ago
That's actually pretty awesome. Of course, it's more of a symptom that is an emergent property than a root cause. Like saying every top tennis player uses $$$ rackets - so if I use $$$ rackets, I'll be a top tennis player. If people knew Sam Altman judged companies more positively by their response times which resulted in more funding, that's a metric just begging to be gamed without actually making the business better.
- hn_throwaway_99 6y ago
  As someone who is generally a "slow responder", I'll guess at the root cause. My guess is that being a slow email responder is correlated with (a) higher propensity to procrastinate, (b) general indecisiveness and (c) lower self-esteem, all of which are not hard to see why they would negatively impact business success. Of course, I could just be projecting, but when I am slow to respond to an email, it's usually because I want to overthink the response, or that something about writing the response is generally uncomfortable so I practice avoidant behavior (same thing feeds into procrastination). That root cause trait has proven very inhibitory for me achieving my goals.

new_realist 6y ago

Most startups fail. I don’t think most founders have the acumen to really know the full story of their own failure.

gibolt 6y ago
There is a difference between knowing the difference and admitting it. When you run a business from start to scale, you likely know the main failure point, and it is probably a few simple variables.
- andi999 6y ago
  Well the answer is probably in 95% of the cases 'not enough sales', but it wont tell you anything. Also I believe even in hindsight you dont know what was really the problem (in the sense that you know what could have been done to make it succesful)
  - mdorazio 6y ago
    Not sure I agree with that. Most astute founders can tell you pretty accurately why they didn't achieve enough sales to offset costs, they're just unlikely to do so for strangers because it usually means admitting at least some amount of self-fault. I know I can give a shortlist for my own failed businesses that's a lot more detailed than "not enough sales".
    - andi999 6y ago
      Yes, but is the list really true (in an objective sense). I mean why didnt you act on it, or why was it only know afterwards. (Of course the list might contain a lot of unchangable items, but this would mean the startup was impossible)
      - fuzzfactor 6y ago
        One of the real bad ones is _more sales wouldn't have helped anyway_.

wtvanhest 6y ago

Probably be much more informative to talk to non-c-level employees who do not have an incentive to modify the story.

LysPJ 6y ago
Perhaps. There is the danger that those employees aren't party to all the relevant information, so their version of the story might be inaccurate too.

avip 6y ago

My experience (N=3) is startups "fail" mostly because the answers to "can this work" and "will people buy it" tend to be "yes", "maybe" and "no".

dustingetz 6y ago

no explanation is needed for joe founder failing to achieve a $1B outcome. Better to ask why the few succeed and the answer is usually one that could not have even been foreseen.

jonathankoren 6y ago
Not really. That’s a definition of survivorship bias. The answer many times comes down to luck. https://theconversation.com/huge-success-in-business-is-largely-based-on-luck-new-research-130843 https://theconversation.com/huge-success-in-business-is-larg...

ChuckMcM 6y ago

One of the best talks I had was a two hour discussion of this very topic with John Walecka. John had invested in Freegate and we were discussing risks and why things failed. He helped me understand both the concept of 'stacking risk' (where the startup is taking on more unknowns than it should) and 'over burning' where a startup attempts to hire itself into shortening its schedule which not only fails but exhausts needed capital. To this day I never hire an engineer if I cannot write down EXACTLY what they will be working on and how it will help the schedule. Even if they are a "super star", if I don't have something for them to do that will check off things that are currently on the path to the next milestone, no offer. Whenever I've watched over hiring from inside or outside it tends to end badly.

vishnugupta 6y ago
> Whenever I've watched over hiring from inside or outside it tends to end badly. I can relate with this. I first saw this phenomenon play out twice within a large FAANG company where the leadership wanted to ship an immensely complex product fast by throwing people and so over hired. Both products failed miserably. And the I saw a repeat of this at the entire company level. The extent of over hire was immense, fueled by cheap investor money and their push to grow-at-all-cost. The company is now just barely managing to survive, after a few rounds of layoffs and pivots. Over hiring is a huge red flag from the long term success perspective. However, as an individual, if you get in early on in the cycle and play it well you will rise very fast in the org chart. I’ve seen a few do that consistently. Good for them I guess.
- thewarrior 6y ago
  The two are connected. Over hiring is done on purpose to game promotions. In startups for funding. Depending on the timing and where you are in the hierarchy it can go either way. People switch every 2 years now so it’d doesn’t matter how the team does in the long term.

duxup 6y ago

Also...it's possible nobody knows. You might have some obvious situations that were big issues, but I'm not sure reason for a business failure (sometimes even success) is always obvious.

euske 6y ago

Looks like a universal pattern across different domains: an immediate cause of human death is usually different from the long-term cause of their health deterioration. Similarly, an immediate cause of crash is typically different from the root cause of the problem. But is there really such a thing as "a root cause"? I guess we can always look deeper.