The Innovation Dumpster — A dead startup

Ashok Subramanian
4 min readNov 7, 2018

Have you actually seen a startup die? Or have you killed one? Well, let us call this death, or a temporary coma, as shutdown.

A shutdown point is one at which a company experiences no benefit for continuing operations and shuts down temporarily. — Investopedia

This shutdown is essentially a simple cease of operations; but there is an after party clean up on the anvil. Employees, statutory dues, investors, closure procedures. The failure could be any reason — one important and dominant reason are the founders themselves. Founders normally start on an idea, then forge team & capital to build the business. Never do they think their idea as a business. Most of them will go with the flow.

“Many small businesses are doomed from day one, not from competition or the economy, but from the ignorance of their owners . . . their destiny is already decided because they have no idea how a business should be operated.” — William Manchee

They do not acknowledge that what they have been creating is normally Utopian, and that survival is an essential skill to succeed. For this many skills, are required. But, the whole story is about the death of the startup itself or the cause of the death, but what is left of it — the ‘Innovation Strife’.

Let us go back to the birth of the startup to address this ‘Innovation Strife’.

“Innovative ideas are the golden wealth of a growing business” — Wayne Chirisa

As always, in glowing terms, we have to acknowledge that the ‘innovative idea’ is the seed & soul of the startup. Every other ingredient is an add-on over and above this ‘innovative idea’.

“Innovation is the specific instrument of entrepreneurship…the act that endows resources with a new capacity to create wealth.”― Peter Drucker

Startups, the new vehicles of entrepreneurship, rides on the innovation engine — to create value, and create wealth. However, startups do fail — well most of them. Here are some of the failures.

But the primary reason is interesting, and it is almost half the pile. ‘ No market need’ is a key reason. When you connect this point to the idea, it becomes clear — its a solution that is finding a problem.

https://www.statista.com/chart/11690/the-top-reasons-startups-fail/

Startup as a journey of innovation, without beneficiary, that too paying beneficiary called the customer, is the single biggest reason for failure. There is no raison d'etre for the startup. That accounting to 42% is no surprise.

“Innovation is the creation and delivery of new customer value in the marketplace.” ― Michael J. Gelb, Innovate Like Edison: The Success System of America’s Greatest Inventor

Innovation is about creating customer value. Startups have to embrace customer centricity for their intended impact, and therefore, value creation. Let us assume that it did not work, as stated. Now that we know that ‘innovation misfit’ or ‘Innovation Strife’ — is what is the single biggest reason for the failure of a startup.

Having established that Innovation Strife as the nail in the coffin of the startup, what happens to the startup, when it dies. Normally, founders move on — the trail effects of shut down are normally mental, emotional and financial, in that order. But in most cases, the founders try another idea, or join a gig, or become advisors to other potential pretenders in the queue.

“I realized, essentially, that we had no customers because no one was really interested in the model we were pitching. Doctors want more patients, not an efficient office.”

Treehouse Logic applied the concept more broadly in their post-mortem, writing,
“Startups fail when they are not solving a market problem. We were not solving a large enough problem that we could universally serve with a scalable solution. We had great technology, great data on shopping behavior, great reputation as a thorough leader, great expertise, great advisors, etc, but what we didn’t have was technology or business model that solved a pain point in a scalable way.” — CB Insights Report ‘Top 20 Reasons why startups fail’

But what happens to the innovation? Has it hit a dumpster?

‘Actually no one cares where it is’. But what if we care? What if the innovation was an actually good effort, but the ‘vehicle’ failed?

Founders move on, but what happens to the innovation? Does it lie in the dumpster?

There is no statistics that explores this. I intend to write up in Quora and discover this answer. If you have any data — can we recover and revive such innovation from the dumpster?

Does any failure conference address this point?

The purpose of this article is to launch a ‘Innovation Recycling Program’ on startups. There are great ideas that have died for many reasons, with the startup. Your comments will help us build data.

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Ashok Subramanian

A poetic mind. Imagines characters, plots. Loves Philosophy, Literature and Science. Poetry-Short Stories-Novels- Poetry Reviews-Book Reviews