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by TomGullen 4647 days ago
I liked this article thank you. My theory on dying startups is that if its not working its better to go out with a bang (eg a crazy pivot or a high risk high reward gamble) rather than a bleed out.

FedEx was a good example of this, if I recall correctly the CEO took all the cash they had and went to Vegas with it. Usually wouldn't turn out well, but that time it did. If you need money, and have exhausted all your options you have to take a course of action that gives you a chance, no matter how slim, over the slow bleeding death which would be a long painful and hopeless experience.

Not compromising ethics like you mention is so important in life. Ethical decisions are harder in difficult circumstances (teetering over the cliff of failure) but those moments in life are when your ethics count for the most and mean the most, and as you mention they can also pay off in the long run (but this shouldn't really be a consideration from a purist ethical standpoint). The captain shouldn't go down with that ship.
2 comments
YokoZar 4647 days ago
If the business is sure to fail and you have money left but no clear idea what to do with it, wouldn't simply liquidating and giving partial returns on investment be a reasonable option?
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mattzito 4647 days ago
It depends (imo), on the amount of money you have left and who its from. If you've raised $1m from well-to-do-but-not-rich family members and with $500k left you're realized you're totally unqualified to be in your business, or the concept was terrible, no valid pivot, etc., then yeah, give the people back your money.

But if you've raised $1m from professional investors and you have $100k left, for example, you might be better off trying to double down or raise more money.

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dkersten 4647 days ago
If you had $100k left and you tried the FedEx gamble, and lost, you could very well get done for reckless trading. I don't think that's worth the risk.
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pratik661 4647 days ago
It should be a risky venture for the company (ie a new strategy). I think gambling in Las Vegas would count as fraudulent.
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dkersten 4646 days ago
Maybe I should have responded to TomGullen's post since he mentioned the FedEx story.
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kemiller 4647 days ago
Yes, this. The worst possible outcome for a startup is a slow, drawn-out death. The second-worst outcome is treading water without clear success.
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