When money was easy, everyone looked like a genius and even the worst run companies could put up some numbers. But in early 2023, we are now in the mi

Signs that a Startup is Going Bad

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2023-01-23 07:00:05

When money was easy, everyone looked like a genius and even the worst run companies could put up some numbers. But in early 2023, we are now in the midst of a tech recession if not a general economic recession.

A friend of mine was recently evaluating job offers and one was clearly a startup that was “going bad”. It was clear to me but not to them; I figured I would write a post spelling out some things I look at.

People love to talk up about startups on the way up. VCs want to demonstrate they saw the potential early, founders want to recruit employees and customers, media want access to a future unicorn, and nobody wants to punch down on the little guy. Outrage and dramatic disasters get the most attention, but a good second place to that is the positive happy vibes of someone genuinely trying to “make the world a better place”.

There’s a certain obsequious boosterism that forms around startups in their early days: early milestones are hit, growth numbers are strong, and some form of up-and-to-the-right chart with no Y axis drives the narrative. A rare few even do end up boasting the most meaningful Y axis of all: revenue.

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