[wtvanhest]

What I am about to type is not an excuse for some of these companies, but rather an observation about all companies.

Sustainability is relative. Very few companies "last forever", so the real questions are... What is an acceptable pattern of growth and what is driving the shorter lives of these companies?

[taylonr]

That's a fair point. But I think if you look at most non-startup companies that stay around for 3-4 years they don't typically have the valuations that the startups do in the same time.

For example, Joe's Plumbing shuts down after 2 years because Joe realizes he has to manage his books, do advertising, manage any junior plumbers etc. In the end he spends 50% of his time doing plumbing and 50% of his time doing "business." So he pays off his small business loan (maybe) of $100k and goes to work for Tom's Plumbing where at least he gets to do plumbing all the time.

He had a run of 2 years, but at no point was his company sitting on millions of dollars.

[wtvanhest]

I wasn't referring to lifestyle businesses like you describe. I was referring to real companies with billion+ dollar valuations. Plenty of them fail (either reorg or liquidate), are bought and the products become useless etc.

Here is a list of 2012's bankruptcies by assets: http://www.turnaroundletter.com/largest-bankruptcies-this-ye...

There isn't a single "software" company on the list. Now, I also understand that software companies are not as asset intensive, but it is hard to know what companies are "large" after a bankruptcy since their market caps approach zero.

My point was specifically refering to real businesses, not lifestyle businesses.

[zacharycohn]

I don't think Joe's Plumming counts as a lifestyle business. He probably put in equal hours to a startup entrepreneur.

Startup != Small Business != lifestyle business.