About Scaled and Failed
Welcome to Scaled and Failed! My name is Amil, and I’m an aspiring VC and founder at The University of Texas at Austin who loves everything startups. I’ve launched a startup and raised funding, worked at accelerators, and taken plenty of odd jobs helping out friends starting companies. I’m currently interning at Decibel Partners and am a Venture Fellow @ Unshackled while wrapping up my Finance degree.
Many people think that trying to replicate patterns of success is the best way to build a successful company, but this lends itself to the bias towards optimism that people tend to fall victim to. Harvard Business School professor Tom Eisenmann stresses the importance of recognizing the patterns of startup failure, and I think that it’s just as important to pay attention to who didn’t make it in order to learn how to succeed. Avoiding failure gives you time to pursue success.
The 6 patterns Professor Eisenmann identifies as causing most startup failures are as follows:
Early-Stage Patterns of Failure
Pattern #1: Bad Bedfellows – These weren’t the founders cut out for building this product together or the investors meant to support them.
Pattern #2: False Positive – The product had great traction with initial users, but the mainstream market doesn’t line up with these initial adopters. The company isn’t equipped to meet the needs of the market.
Pattern #3: False Start – A product is built without proper research and insights, so capital is wasted and a pivot is needed to get the right product for the problem.
Late-Stage Patterns of Failure
Pattern #4: Speed Trap – Growth is the only focus, even when there are many problems that need to be fixed being exacerbated by speed. Slowing down and building solutions should be the next step, but this is ignored in favor of more growth.
Pattern #5: Help Wanted – Someone critical that needs to be on the team isn’t, and potentially the wrong person is in their place. Lack of resources, mistakes, or bad luck can compound with this and destroy a business even with everything else going smoothly.
Pattern #6: Cascading Miracles – Many different things all need to happen for a startup to succeed, and any one of them missing the mark will tank the company.
Of course, there are many more reasons that startups may fail that aren’t encompassed by these, and I aim to identify less common patterns of failure as well. Scaled and Failed is my attempt to give quick insights and lessons learned by comparing two companies within a theme that took opposite trajectories; one living to raise another round and grow, and the other crashing (and maybe burning). I hope that by exploring the reasons behind failure, others can avoid the same mistakes. Hindsight is much clearer, so it’s worth looking back.
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Let me know if there are any specific startups you’d like covered, and please share with anyone who may be interested!
