> When startups die, the official cause of death is always either running out of money or a critical founder bailing.
This sounds like a truism to me. Like "the brain stopped working", it's more a definition of death than an explanation of what caused it.
> But I think the underlying cause is usually that they’ve become demoralized.
And this, I suspect, is confusing correlation for causation. The team getting demoralized is a symptom of the company being in a poor, possibly life-threatening, state of health. Like many symptoms of real disease (e.g., diarrhea) it's something that will worsen the situation and needs to be treated. But it's not necessarily the underlying cause. If the real source of illness is something that won't resolve on its own then focusing too much on the symptoms is at best a form of palliative care. At worst, it exacerbates the situation by lulling you into believing that you're addressing the problem when you're actually allowing it to continue unchecked.
I actually think you're wrong. If someone is willing to keep going, they might be able to salvage something (or even rebuild) after running out of VC money. If the founder(s) just give up, then it's over, but until then, there's still a chance.
Morale problems can happen easily in the "trough of sorrow" which can be important to work through - many startups have found success at some point after one. If members don't know how to deal with that personally, it can end the company.
This sounds like a truism to me. Like "the brain stopped working", it's more a definition of death than an explanation of what caused it.
> But I think the underlying cause is usually that they’ve become demoralized.
And this, I suspect, is confusing correlation for causation. The team getting demoralized is a symptom of the company being in a poor, possibly life-threatening, state of health. Like many symptoms of real disease (e.g., diarrhea) it's something that will worsen the situation and needs to be treated. But it's not necessarily the underlying cause. If the real source of illness is something that won't resolve on its own then focusing too much on the symptoms is at best a form of palliative care. At worst, it exacerbates the situation by lulling you into believing that you're addressing the problem when you're actually allowing it to continue unchecked.