The brutal truth about what actually kills high-growth companies
I’ve now been involved in 100+ B2B startups as an investor, advisor, or founder. I’ve watched companies go from $0 to $1000M ARR. I’ve seen unicorns born. And I’ve seen what looked like rocket ships crash and burn.
And here’s what nobody wants to admit:
It’s almost never the competition that kills you.
The Lies We Tell Ourselves
Every startup autopsy sounds the same:
- “The market shifted.”
- “We got outspent by the incumbent.”
- “Macro issues”
- “The funding environment dried up.”
Bull.
I’ve seen companies survive all of that. I’ve watched startups win against competitors with 100x their budget. I’ve seen founders turn lost customers into evangelists. I’ve seen teams navigate market changes that would’ve killed most companies.
The companies that actually die? They tear themselves apart from the inside.
The Unforced Errors That Actually Matter
After 15+ years in SaaS, I can tell you exactly what breaks:
The cofounder relationship fractures. You stop communicating. You make passive-aggressive comments in Slack. You undermine each other in front of the team. And then one day, you realize you’re spending more energy managing each other than managing the business.
Your best up-and-coming VP gets recruited away. Why? Because you haven’t talked to them in three months. You haven’t given them more equity. You haven’t told them they’re crushing it. And suddenly, someone else does.
The “brilliant but difficult” executive. You know the one. They’re 10x talented but leave a trail of destruction. They burn out your best people. They create drama. And you keep them because you think you can’t replace their output.
You can. You must.
The culture of blame. When things go wrong (and they will), does your team solve problems or point fingers? I’ve watched executive teams spend entire board meetings arguing about whose fault something was instead of fixing it.
The Moves That Actually Work
Here’s what the best founders do differently:
#1. Go Tell Your Cofounder You Appreciate Them
Right now. Today. Be specific. “The way you handled that customer situation last week was incredible.” “I couldn’t do this without you.”
Sounds soft? I’ve seen cofounders who talk like this still working together after 10+ years. The ones who don’t? They’re usually done by year 3.
#2. Give Your Best VP More Options Tomorrow
Not at the next board meeting. Not during the annual review cycle. Tomorrow.
Your best VP is getting recruited constantly. LinkedIn messages every week. Former colleagues starting companies. Make sure they know you see it. Make sure they know you value it.
At SaaStr, when a key executive hits a major milestone, we don’t wait. We recognize it immediately. More equity, more responsibility, more visibility. The cost of losing them is 100x the cost of over-retaining them.
#3. Say Thank You (And Mean It)
The VP of Sales just closed a huge deal? Don’t just Slack a “nice work.” Walk over. Tell them it mattered. Tell the whole company.
Your engineer shipped a complex feature under a brutal deadline? Send them home early. Give them a bonus. Write a note to the whole company about what they did.
Recognition isn’t expensive. But the lack of it is devastating.
#4. Apologize (It’s Literally Free)
You snapped at someone in a meeting? Apologize. You made a bad call that affected the team? Own it. You forgot to follow up on something important? Say so.
The CEOs I respect most are the ones who apologize fast and often. Not because they’re weak. Because they’re secure enough to admit when they’re wrong.
#5. Lead From the Front
This is the one that separates the great CEOs from everyone else. When things are hard, are you in the foxhole with your team or in your office with the door closed?
When a major customer is at risk, are you on the call? When the product is broken, are you in the war room? When morale is down, are you the first one in and the last one out?
Your team will run through walls for you. But only if they see you running through walls first.
#6. Trust the Best, Move On From the Rest
This is the hardest one. That VP who’s been with you since the early days but can’t scale? You need to move them on. That “brilliant but difficult” engineer who’s causing half your team to quit? They need to go.
That executive who talks a great game but never delivers? Exit time. I know it’s brutal. I know they’re good people. I know they gave you everything in the early days.
But here’s the truth: keeping someone in the wrong role is cruel to them and destructive to everyone else.
The best founders make these moves fast. The rest watch their companies slowly die from internal decay.
The Test
Here’s how you know if this is you:
Close your eyes and think about the last month. How much time did you spend on:
- External competition vs. internal drama?
- Talking to customers vs. managing interpersonal conflicts?
- Building product vs. dealing with organizational dysfunction?
If you’re spending more time on the second part of each of those equations, you have an internal problem, not an external one.
The Bottom Line
I’ve seen exactly three companies in my portfolio fail because of competition.
I’ve seen more than a dozen fail because the founding team tore itself apart.
I’ve seen five fail because they couldn’t raise capital.
I’ve seen twenty+ fail because they lost their best people and couldn’t recover.
The unforced errors are what kill you.
The market is hard enough. The competition is fierce enough. The product challenges are real enough.
Don’t lose because you forgot to appreciate your cofounder. Don’t lose because you were too cheap with equity for your best VP. Don’t lose because you couldn’t say “I’m sorry.” Don’t lose because you kept the “brilliant but difficult” person too long.
These are all choices. These are all in your control.
Make the right ones.
