PART 3: The Startup Massacre: Death by 1000 Cuts

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We've covered The Overfunding Curse (Part 1) and The Fake Tech Problem (Part 2).

Both are obvious mistakes in hindsight—raising too much money before proving your model, and lying about tech you don't have.

But the next two patterns? These look like smart business decisions. They're what "growth-minded" founders are supposed to do. Right up until the moment they kill you.

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Pattern #3: The Capital Efficiency Death Spiral

Let's talk about burn rates.

In 2021, high burn was a feature, not a bug. 

"Blitzscaling" was in. 

Asking "are you profitable?" was cringe. 

Real companies lose money at scale, then figure it out later, they said. Just ask WeWork!

(Oh wait, they're basically dead too.)

Fast forward to 2024, and suddenly everyone cares about this thing called "runway."

The Good Glamm Group is a perfect example. 

This Indian content-to-commerce company pursued an aggressive acquisition strategy, buying up digital media and consumer brands at sky-high valuations. The theory was that they'd create "synergies" between content and commerce.

The reality? 

They overpaid for everything, most acquisitions struggled to scale, and by early 2025, lenders enforced charges on assets, effectively breaking up the company. 

Brands they'd acquired for millions were sold for fractions of the purchase price. Salaries and vendor payments went unpaid.

Backing from Warburg Pincus, Prosus, Bessemer, and Accel couldn't save them because the business model fundamentally didn't work at their burn rate.

Dunzo, the Indian hyperlocal delivery darling, followed a similar path. 

Started as a WhatsApp-based errand service, pivoted to groceries, then jumped on the quick commerce hype train with "Dunzo Daily" dark stores. Each pivot burned more cash. 

Despite a $200M investment from Reliance Industries (Mukesh Ambani's company—yes, one of the richest people on Earth), they couldn't make the unit economics work against deep-pocketed competitors like Swiggy, Zepto, and Blinkit.

Think about that. $200M from one of the world's wealthiest individuals. Still died.

The pattern here is clear: If you can't figure out how to make money at your current scale, raising more money just gives you more rope to hang yourself with.

Here's what happened to these companies:

1. Raised big rounds in 2021-2022

2. Hired aggressively, expanded fast, spent on "brand building"

3. Assumed next round would come easily

4. Market turned, investors wanted profitability or a clear path to it

5. Tried to cut burn, but too late

6. Shut down or sold for pennies

Pattern #4: The Pivot-Too-Late Disease

Pivoting isn't shameful. 

Slack pivoted from a failed game. 

Twitter pivoted from a podcasting platform. 

Instagram pivoted from a location-based check-in app.

The key word there is "pivoted"—not "waited until the bank account hit zero and then panic-pivoted."

Avail, a surgical telepresence startup, is a textbook case. 

They raised $130M+ and expanded to 1,100+ operating rooms during COVID. 

Their tech let remote medical reps and advisors connect with surgeons during procedures—super useful during lockdowns.

Then COVID restrictions lifted. Operating rooms went back to normal. And Avail kept executing the same playbook, burning cash, assuming they could raise more. 

By the time they tried to pivot to a new model, they were out of runway. They shut down in November 2023. (Mendaera later acquired the IP for cheap.)

BluSmart, an Indian EV ride-hailing startup, had a different problem. They leased thousands of EVs through a related company (Gensol Engineering) using government loans. 

Gensol was supposed to buy 6,400 EVs for ₹830 crore. They only bought 4,704 for ₹567 crore and "siphoned" the rest—about ₹262 crore.

When regulators caught the fraud, the whole house of cards collapsed. 

By April 2025, BluSmart halted bookings in their biggest markets. 

They had a decent product. 

But the financial structure was corrupt, and when that came to light, no amount of pivoting could save them.

The lesson? Pivot early when you still have cash and options. Don't wait until you're 3 months from death and have zero leverage.

The difference between a successful pivot and a death spiral? 18 months of runway.

Companies that pivoted successfully did it when they still had 18+ months of cash. Companies that died waited until they had 6 months or less.

The Four Patterns (So Far)

Let's recap what killed 966 companies:

1. The Overfunding Curse: Raising too much at inflated valuations before proving the model

2. The Fake Tech Problem: Lying about technology that doesn't exist

3. The Capital Efficiency Death Spiral: High burn rates with no path to profitability

4. The Pivot-Too-Late Disease: Waiting until you're out of runway to change course

But here's the thing—some companies thrived while 966 died around them. They saw the same market conditions, faced the same headwinds, and came out stronger.

Next week in Part 4 (the finale), I'm breaking down exactly who survived, what they did differently, and your six-point survival checklist for 2026. If you're running a startup right now, you need to read this one.

—Brendan Ward