“If you can just avoid dying, you get rich. That sounds like a joke, but it’s actually a pretty good description of what happens in a typical startup.”
That quote from Paul Graham’s essay How Not to Die stuck with me during my struggles as a 3rd-year founder backed by Y-Combinator.
For funded startups, the numbers look even better.
You beat out ~90% of your competitors if you’ve survived long enough for a Series-C. Directionally, if your chances of becoming a unicorn were 1% when you started, you 10x that probability by surviving long enough to get a Series-C.
Now, proposing “just don’t die” as a solution to “I’m dying” in an industry where 95% of startups fail sounds silly. But on a deeper look, it holds merit when you examine why most early-stage startups die.
According to surveys by CB Insights, founders list running out of money and competition as the top reasons. When you speak to founders, that’s rarely the case. Paul seems to agree with me on this one:
When startups die, the official cause of death is always either running out of money or a critical founder bailing. Often the two occur simultaneously.
But I think the underlying cause is that they’ve become demoralized.
Personally living the experience in search of PMF and speaking with peers, I’ve observed that the breakdown and demoralization of founders is the leading cause of death for most early-stage, pre-product-market fit companies.
To borrow language from Ben Horowitz in his book Hard Things about Hard Things, every founder goes through “The Struggle”.