7 Symptoms You're Building a Zombie Startup
Have you ever asked yourself whether your startup is already dead? Feeling like every day is just like the previous one, no new challenges, no milestones, and core team members are leaving the company. Well, these are critical indicators that you're running a Zombie Startup. You're not quite winning at the game; you might have already died months ago. I am here to help you answer the question, because there is nothing worse than building something that's already dead.
A Zombie Startup is a company that has received initial funding but failed to grow, stuck in a state where it's not failing enough to shut down, yet can't attract further investment or achieve significant traction. Your company might be in this state without you noticing. Here are 7 symptoms that tell if you're running a zombie startup or not.
1. No Real Growth
Growth is an indicator of success. In fact, it is argued that it is the core metric that tells whether you're building a successful startup. Take a look at your financials. If you notice a pattern of flat growth or decline spanning 6 to 12 months, it's a clear indicator that your company is in a bad state. Although all companies experience a bad quarter, if your startup is not on track for 2X or higher year-over-year, then you're dead. It's even worse if not only revenue isn't growing, but GMV, clients, users, and other related metrics aren't either.
2. No Market Fit
Product-market fit is one of the main goals most startups focus on. It is the first business filter that wipes out a lot of founders from the game. Yet, zombie startups continue playing by doing occasional pivots or securing a large investment round, which keeps them there temporarily. Unfortunately, if you ignore the market signals, have no real market demand, and fail to develop a profitable, repeatable, scalable business model, you'll be wiped out eventually. The next flag proves you don't have a product-market fit.
3. Team of Zombies
A zombie startup is definitely led by a team of zombies. This team works on features, not outcomes. Focusing on shipping features rather than achieving market traction. Product changes don't improve engagement, retention, or acquisition. Moreover, this team likes to celebrate "almost" wins, mistaking incremental changes for real improvement, and treating every day like the last. This is mostly because they are not facing any difficult challenges, their brains are in autopilot mode.
4. No Clear Vision
Any unity or group of people working on something needs a shared vision and goals. It's not hard to come up with vision, missions, or goals. The hard part is having a CLEAR vision, one that can be communicated top-down. A zombie startup lacks a long-term plan, making it incapable of hitting milestones, leading to Decision Paralysis. Most of these subjects tend to hire consultants, bringing in external help for basic strategic issues.
5. Talent Drain
One of the main challenges a founder faces is building an ace team, a team of talents they can rely on to build company culture. However, the biggest challenge is retaining those talents. Although this dilemma is faced by all startups, zombie ones will definitely fail, losing key people to higher-growth competitors. This isn't the only source of talent drain; a more crucial one is laying off employees to cut costs.
6. Founder Blindness
A clear sign you're running a zombie startup is if you're one of those founders who refuse to face reality, attack critics, or hide from bad news. In fact, founders are one of the main reasons a company collapses. These founders are blind to the truth, mostly focusing on press, awards, podcasts, and teaching others on how to start a business.
7. Investors Ghost You
The last symptom I want to highlight is the investors ignoring your company. Even if your company has raised millions in early rounds, this won't protect it against becoming a zombie startup. In fact, most zombie startups are created due to high early investment rounds with no product-market fit. Investors' main objective is to have an exit strategy after 1-5 years with 2X, 5X, 10X, etc. They rarely care about your status; they'll just move to the next attractive startup in the region.
Can You Revive It?
Yes, but it requires brutal honesty and decisive action. Acceptance is the first step, admitting your startup is a zombie takes real courage. From there, you need to focus on root issues (your broken business model), not surface problems (team conflicts or feature requests). I'll break down the exact revival framework in a future post, but know this: if you're experiencing 3 or more of these symptoms, the clock is ticking.
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Safwan Saigh
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