Startups Don’t Die, They Commit Suicide

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Justin Kan is the founder of Justin.tv and Socialcam. You can follow him on Twitter here and read his blog here.

Startups die in many ways, but in the past couple of years I’ve noticed that the most common cause of death is what I call “Startup Suicide”, a phenomenon in which a startup’s founders and its management kill the company while it’s still very much breathing.

Long before startups get to the point of delinquent electricity bills or serious payroll cuts, they implode. The people in them give up and move on to do other things, or they realize that startups are hard and can cause a massive amount of mental and physical exhaustion — or the founders get jobs at other companies, go back to school, or simply move out of the valley and disappear.

I’ll let you in on a dirty little secret: while building and iterating on Justin.tv (long before launching Socialcam), there were many times I came to the brink of packing it up and moving on from the company that bears my name. Shameful? Perhaps, but I know the same thoughts have occurred at times to my co-founders, who are still with the company to this day. The reasons? Take your pick: we need more traction, we need hockey-stick growth, we need more revenue, we need more buzz, we argue about management issues, we have diverging interests. In the past five years I have personally experienced all the startup failure cliches that exist.

But, every time the “suicide” specter reared its head, I turned away and stayed the course. And every time, I would be vindicated. Arguments were worked out, problems solved, revenue generated, traction gained, buzz created. So I’ve struggled on, and every day we’ve continued to win the most important battle for any company: existence. Even more, we’ve been able to grow all the metrics that matter: users, revenue, and team.

When startups commit suicide, often the root problem can be traced back to a lack of product traction — it’s rare to find people willingly quitting companies with exploding metrics. But one thing that many entrepreneurs don’t realize is that patience and iteration are critical in achieving product market fit. Overnight successes might happen fast, but they never actually happen overnight. Facebook lagged Myspace for a couple years before being crowned the top social network. Groupon had to iterate through being ThePoint. If the teams had given up after a single failure (or even many failures), they would never have created the massive companies that capture the public eye today.

My favorite example of persistence is Airbnb. I first met the founders, Brian Chesky and Joe Gebbia, after SXSW 2008, where they had bumped into my co-founder, Michael Seibel. They had launched their site as a marketplace for temporary housing rentals during conferences twice already by that point: once for a design conference in SF, and then again at SXSW in Austin.

These were guys with very little knowledge of the tech industry, two designers who had a programmer working with them part time. Michael was advising them, and every couple of weeks they would come by the office to talk with him (while the rest of us alternated between watching casually, mildly annoyed that Mike wasn’t working, and actually trying to provide helpful advice). The one thing I remember vividly was the time when they first demoed their payment flow to us. It was built on top of Amazon payments, and was quite frankly atrocious and we told them as much (I think it required multiple redundant fields).

That summer, they launched a third time for the Democratic National Convention and achieved some traffic, which promptly went away soon after the conference was over. By fall, almost anyone could have justified throwing in the towel. They had tried to make the product work multiple times, had accumulated tens of thousands in personal credit card debt, and were literally printing cereal boxes to try to make money. Even their lead (and only) engineer had moved back to Boston. As a casual observer from the outside, they appeared isolated and discouraged.

But they didn’t give up. They kept at it. At the end of the year, they were accepted into YC, and immediately started trying to generate revenue and hit profitability. Two years later, Airbnb has a great product, a huge userbase, great revenue and is the the toast of the town in Silicon Valley. They are even a contender for the most valuable YC company created to date.

Persistence isn’t just key — it is everything. Getting in the ring is hard, but staying in the ring is even harder, especially when you feel beaten down, tired and alone. Successful entrepreneurs will readily tell you about the good times, their secrets to success, and even their mistakes (with a ready helping of how they overcame them), but they will rarely mention the times they were ready to throw in the towel and do something else. The truth is that everyone has those moments, and the guys you read about on the cover of Fortune were the ones that didn’t quit at them.

I can’t promise you will succeed if you stick with your startup. What I can promise is that if you give up, you won’t possibly succeed.