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So I know a guy (we all "know a guy", right) that works at a small startup company. It is funded by investors and considers itself a company that is trying to commericalize a disruptive technology. High risk with low chance to suceeed.
The company ran into money problems about four months ago and laid off half their staff. They're trying hard to get the prototype finished and a test version sent to a site for testing, but I haven't seen any press releasing saying that it's been done.
The kicker is that I haven't seen that they have any customers. There's no launch customer who has actually bought the product, and I haven't seen anything about the items getting sold to anyone. I can't see how investors keep pouring money into this startup.
There are about 10 other companies all trying to do the same thing. Several have sold the product type or engaged in other government funding to get demonstration projects started. Several companies are releasing press releases stating how their product is coming along and new advancements are being made.
This guys company is deathly quiet. Few to no press releases. Few news articles. And those that do have no substance - just we're going to change the world, our product is finished, we just need to turn a switch - yet nothing ever is said what happens once the switch is turned.
What are your thoughts? Are the employees screwed? Or is being deathly silent while your competitors are noisy common? How long can startups go without customers?
I was offered a job with a startup. It had investor funding (which really isn't anything special), potential clients lined up, contractors to do the installations and maintenance, etc. This is what the company founders told me at least.
But I couldn't find any press releases on the company. The two presidents of the company were more or less investors and didn't have real experience in this field. And finally, there are already established companies that provided the products and services.
A lot of things need to line up with some luck thrown in for a startup to make it. Many struggle for a few months or even years and finally fail. Others don't even get off the ground.
Does sound very grim like the poster above said. Some companies will not acknowledge in the open shaky ground or impending failure because they have no good news to report or more importantly-A plan of action. Despite the layoffs making it obvious and everyone knowing it anyway. They can go without customers until any monies run dry. There are cases where employees have arrived to work to find the business padlocked. It's an awful, Unprofessional way to handle things in regards to the workers who were playing their part by performing their jobs. Communication never hurts-The lack of it does. The WARN act was implemented for this purpose for larger companies.
This sounds like the final bell is approaching for the company, And employees would be wise to have their resumes updated and ready and begin networking.
I'm thinking the real kicker is the lack of customers. A lack of actual signed sales agreements with customers must be on eof the largest hurdles to overcome for a startup, right?
I'm thinking that funding is difficult too, but not as difficult if you have signed sales agreeements. There is technical risk as well, but I'm thinking the biggest risk is the lack of people to buy the product.
Typical start-up. I worked for a few here in Silicon Valley and most (90%) are similar.
The founders are usually in over their heads, but don't inform their rank and file employees of any bad news, for fear of "everyone jumping the ship". The owners/founders keep the bad news to themselves and only release "good" news (or bad news which is positioned to be "good news") to the press and during company meetings.
Most start-ups don't succeed and go under. It is usually due to poor management, no revenue, poor business models which lead to bad execution in the marketplace.
The news is bad at your friend's company, despite what the management is not saying. Silence tells a lot.
Last edited by ccm123; 06-24-2013 at 09:58 PM..
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