Codie SanchezFounder @ Contrarian Thinking

Why Start Ups Are Shutting Down

8 Jan 2024 · 1 min

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0:57

Short video commentary by Codie Sanchez outlining a recent wave of startup failures. The speaker lists high-profile shutdowns (Bird, All of AI, Convoy, WeWork), cites aggregate failure counts and funding figures, attributes the collapse to an influx of cheap capital and inflated valuations since 2012, and urges startups to focus on profitability over growth promises.

Questions this video answers

More than 3,200

23%

$4 billion

Raised $1 billion across 18 rounds; shut down in October (month not year-specified)

$11 billion

Chapters

Big startups are starting to fail. More than 3,200 have failed just in the last year and a half. Who's in the graveyard that might surprise you? Bird Remember those e scooters everywhere? Fastest startup to ever land a billion dollar valuation. Now delisted from the stock exchange and laid off 23% of its staff. How about all of AI? Healthcare automation company highest valuation was 4 billion, but it shut down last month. Then we've got Convoy, kind of like Uber for truckers and shippers. Raised a billion 18 rounds shut down in October. WeWork Co working space raised $11 billion, then filed bankruptcy. Carter reported that 87 of the startups on its platform that raised at least 10 million had shut down by October. What happened that killed all these unicorns? A flood of money since 2012. A total of 344 billion invested during that time, driven by low interest rates, which caused inflated valuations. And then everyone got a little too excited to find the next Uber or Facebook. If you own a startup, you need to start being fueled by profits, not promises.