Public Relations & Social Marketing Insight

Global delivery company DHL started its business by offering free plane tickets to people on the street. For the trouble of giving up their baggage allowances, passengers were handed a free round-trip plane ticket to Hawaii.

Founded as a courier service in 1969, DHL used the spare capacity in travelers’ luggage to transport high-value documents. To understand why it made sense for DHL to provide free tickets to travelers, it helps to understand the massive changes entailed by the containerization of ocean cargo in the 1960s.

...And so while we have dug into the data behind startups that have died (as well as those acqui-hired) and found they usually die 20 months after raising financing and after having raised about $1.3 million, we thought it would be useful to see how startup founders and investors describe their failures.  

While not 50,000 ways it cannot be done, below is a compilation of startup post-mortems that describe the factors that drove a startup’s demise.  Most of the failures have been told by the company’s founders, but in a few cases, we did find a couple from investors including Roger Ehrenberg (now of IA Ventures) and Bruce Booth (Atlas Venture). They are in no particular order, and there is something to learn from each and every one of them....

Respected venture capitalist Bill Gurley is sounding the alarm on the startup industry.

In an interview with The Wall Street Journal, Gurley says the current environment reminds him of the tech bubble that formed in the late 1990s.

Every incremental day that goes past I have this feeling a little bit more. I think that Silicon Valley as a whole or that the venture-capital community or startup community is taking on an excessive amount of risk right now. Unprecedented since ‘'99. In some ways less silly than '99 and in other ways more silly than in '99.

Gurley adds, "No one's fearful, everyone's greedy, and it will eventually end."

Gurley is a partner at Benchmark. He's invested in Uber, OpenTable, and Zillow. Benchmark has invested in Snapchat, Quip, Yelp, and many more.

Private companies are raising giant sums of money — some as much as $500 million, says Gurley. When you have that much money, you have to spend it, so companies are upping their "burn rate," or the amount of money they're willing to lose to grow their businesses....