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2025 Will Likely Be Another Brutal Year of Failed Startups, Data Suggests (techcrunch.com) 28

Posted by BeauHD from the tough-times-ahead dept.
An anonymous reader quotes a report from TechCrunch: TechCrunch gathered data from several sources and found similar trends. In 2024, 966 startups shut down, compared to 769 in 2023, according to Carta. That's a 25.6% increase. One note on methodology: Those numbers are for U.S.-based companies that were Carta customers and left Carta due to bankruptcy or dissolution. There are likely other shutdowns that wouldn't be accounted for through Carta, estimates Peter Walker, Carta's head of insights. [...] Meanwhile, AngelList found that 2024 saw 364 startup winddowns, compared to 233 in 2023. That's a 56.2% jump. However, AngelList CEO Avlok Kohli has a fairly optimistic take, noting that winddowns "are still very low relative to the number of companies that were funded across both years."

Layoffs.fyi found a contradicting trend: 85 tech companies shut down in 2024, compared to 109 in 2023 and 58 in 2022. But as founder Roger Lee acknowledges, that data only includes publicly reported shutdowns "and therefore represents an underestimate." Of those 2024 tech shutdowns, 81% were startups, while the rest were either public companies or previously acquired companies that were later shut down by their parent organizations. So many companies got funded in 2020 and 2021 at heated valuations with famously thin diligence, that it's only logical that up to three years later, an increasing number couldn't raise more cash to fund their operations. Taking investment at too high of a valuation increases the risk such that investors won't want to invest more unless business is growing extremely well. [...]

Looking ahead, Walker also expects we'll continue to see more shutdowns in the first half of 2025, and then a gradual decline for the rest of the year. That projection is based mostly on a time-lag estimate from the peak of funding, which he estimates was the first quarter of 2022 in most stages. So by the first quarter of 2025, "most companies will have either found a new path forward or had to make this difficult choice." "Tech zombies and a startup graveyard will continue to make headlines," said Dori Yona, CEO and co-founder of SimpleClosure. "Despite the crop of new investments, there are a lot of companies that have raised at high valuations and without enough revenue."

2025 Will Likely Be Another Brutal Year of Failed Startups, Data Suggests More | Reply

2025 Will Likely Be Another Brutal Year of Failed Startups, Data Suggests

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  • But being that this is Slashdot call it every year.

  • less low hanging fruit, dumb use cases (Score:3)

    by Big Hairy Gorilla ( 9839972 ) on Monday January 27, 2025 @05:40PM (#65123387)
    We don't need it. We don't want it. It just makes work for us.

    But companies need to pretend to "innovate" (gag) to get you to buy it.
    Companies are out of ideas, people.

    No new *core* technologies have been introduced since ...2015 or earlier. Accept that "AI" isn't proven yet.

    • We don't need it. We don't want it. It just makes work for us. But companies need to pretend to "innovate" (gag) to get you to buy it. Companies are out of ideas, people. No new *core* technologies have been introduced since ...2015 or earlier. Accept that "AI" isn't proven yet.

      Technological pace is something I think about a lot. Not just from my own perspective, but I think about what my great grandparents or my grandparents experienced. My grandpa lived from the time of horses in the fields until he saw a massive combine pull into one of his fields that used to take several men and horses weeks to finish, and finish it off in about three hours. He also got to see the dawn of the internet, and would use it to look up weather reports and farmers almanac historical reports for comp

      • I am reminded of an AC post about this in another topic. From 2000 to 2010, we went from base functioning cellphones to the iPhone 4 with a decent camera, good screen, and pretty much everything present in a phone today. From 2010 to now, nothing really has changed except the same services hiking prices, and more things which were free now charging. Yes, we have faster and more storage, but that is due to ever more bloated code (those Chrome tabs are not exactly going to shrink in size anytime soon).

        We h

      • Recall the birth of the commercial internet .. haha.. what? Barely 30 years ago. We read that was doubling in size every 90 days. Cisco and Nortel were cranking out switches like crazy. I swear to the great big head in the sky we literally believed it would continue at that rate forever. But it didn't. Now look at today. The most compelling feature on a new phone is that you can put yourself into a photo after you take the shot? The value to you is minimal. Closer to a parlor trick than a useful feature. No

        • Recall the birth of the commercial internet .. haha.. what? Barely 30 years ago. We read that was doubling in size every 90 days. Cisco and Nortel were cranking out switches like crazy. I swear to the great big head in the sky we literally believed it would continue at that rate forever. But it didn't. Now look at today. The most compelling feature on a new phone is that you can put yourself into a photo after you take the shot? The value to you is minimal. Closer to a parlor trick than a useful feature. Now the main event: AI. Big tech desperately needs us to want AI to keep the corporate machine running. We seem to be well into diminishing returns for the customer. Straight line growth can't happen, never happens over time. Today's tech market selloff is a wake up call. We have a full meal of tech and we can't eat another bite.

          If they focused on making AI useful, rather than trying to shove it down our throats half-baked, it might do something. Unfortunately, they're focused on the short-term, and losing sight of the fact that the public is just fed up with bullshit as the next savior.

          The market correction yesterday has been long overdue. A lot of us had been saying for quite a while the AI thing was a bubble that was bound to pop. Hopefully it doesn't take the entire economy with it as it goes.

          • >If they focused on making AI useful, rather than trying to shove it down our throats half-baked

            The way I see it, we've passed the age of utility (pre 2010 approx). Now all the upgrades, "improvements" are for surveillance. There was a brief time that we could be naive and say, "it's just for advertising", but we can see now this is pernicious. I'm barely on the internet, and I have as high a wall around me as possible today. I went to the dentist, they use google {something or other}, now on this site,

        • Recall the birth of the commercial internet .. haha.. what? Barely 30 years ago. We read that was doubling in size every 90 days. Cisco and Nortel were cranking out switches like crazy. I swear to the great big head in the sky we literally believed it would continue at that rate forever. But it didn't. Now look at today. The most compelling feature on a new phone is that you can put yourself into a photo after you take the shot? The value to you is minimal. Closer to a parlor trick than a useful feature. Now the main event: AI.
          Big tech desperately needs us to want AI to keep the corporate machine running. We seem to be well into diminishing returns for the customer. Straight line growth can't happen, never happens over time. Today's tech market selloff is a wake up call. We have a full meal of tech and we can't eat another bite.

          I'm in agreement with you, just an up-front note as I suck at social shit. Anyway, tech desperation for us to keep AI being a thing in order for them to use it for their own goals is lazy "you'll be cool to come up with the most useful function" BS, right before that function is modified a bit and used to make the job of the person that made it possible to use AI to drive the person that came up with the idea out of a job. I'm not all in that "AI will own us" dystopian crud; just saying.
          It's comparable di

          • ha ha, yep, promoted right out the door... hamsters in wheels comes to mind, with less food pellets than last year... people seem quite willing to train their replacements... translators are finished, journalists are nearly done, artists or wanna be artists are nearly finished too... programmers and network engineers IMHO are less replaceable, but given time, will likely be cooked too. Also keep in mind that quality is a dirty word now, so any half baked AI output will be put into production ... at least ge

            • ha ha, yep, promoted right out the door... hamsters in wheels comes to mind, with less food pellets than last year... people seem quite willing to train their replacements... translators are finished, journalists are nearly done, artists or wanna be artists are nearly finished too... programmers and network engineers IMHO are less replaceable, but given time, will likely be cooked too. Also keep in mind that quality is a dirty word now, so any half baked AI output will be put into production ... at least generating test cases is easier than ever... but I think the mish mash of styles adds up to technical debt. We won't maintain systems anymore, I think we'll just generate one mediocre replacement after another until the barbarians show up at the gate.

              Oh yeah, or entertainment for people. Only now, we don't have morals and practices of creation that make good stories and interesting plot lines; good video and excellent sound. We now have mislabeled (oops, that was a mistake but don't say anything) shock-and-awe material that blurs or removes the line between story and reality. Electronic AR with headpieces and feedback is still in development, but there's already AR right there, every day. You just have to want it. Go get it. It's so much less conf

              • I feel like I'm talking you off a ledge. Yes, it's that bad. BUT. Surviving is a head game. Win the game in your head and the rest of the BS doesn't bother you so much. We made it this far, we'll probably make it thru another few years. Meditation and music I find helps a lot.

                • I feel like I'm talking you off a ledge. Yes, it's that bad. BUT. Surviving is a head game. Win the game in your head and the rest of the BS doesn't bother you so much. We made it this far, we'll probably make it thru another few years. Meditation and music I find helps a lot.

                  If you're a Steely Dan fan, I recommend "Eye in the Sky". Just food for NOT thinking. Yeah. ;)

                  • Actually, I just fixed up my turntable before xmas and do have a some Steely Dan... not that one though... which album is that? might have gone to the ex in the divorce :-)

                    • I asked AI and the response is 1972 album "Can't Buy a Thrill". (uh, yeah, you can lol)

                      Ironically (I hope the term applies), I used voice to ask over phone; "I in the sky" was in the query. Answer was "I in the Sky" was ...... [album name]
                      Is it set to dumb down mode for the kiddies and illiterate? I find it VERY hard to believe that anyone who would discuss it would think "I" was in the name. Therefore, no content. Unless it's using previous queries as pretext; I have suspicion of that, as well, as cert

                    • crack me up... yep, you can ...

                      I have Can't Buy, great album btw....
                      When I searched "eye in the sky", I got Alan Parsons Project... also some pretty good prog rock, I think he (parsons) was a producer on a Pink Floyd album if memory serves.

                    • crack me up... yep, you can ...

                      I have Can't Buy, great album btw....
                      When I searched "eye in the sky", I got Alan Parsons Project... also some pretty good prog rock, I think he (parsons) was a producer on a Pink Floyd album if memory serves.

                      I fell prey! I was looking at Steely Dan songs when I typed it. I fully intended to say Alan Parsons Project. AI came back with the name of the Album for Eye in the Sky being "Eye in the Sky" ;) I looked at the album art and I fully recall the Eye of Horus in the art now. I'm embarrassed.

                    • curiouser and curiouser... I thought I might have that one, turns out a good number of them were borrowed from friends. We used to write our names on the labels so that we could identify them six months later when we found them at our fiend's house. I recall Alan Parsons project, one or two albums, we thought they were pretty good.. the pink floyd vibe/prog rock....So Eye in the Sky was the Eye of Horus... wow.. that is some weird references to early civilizations... where there's smoke there's fire, they

                    • Pot. ;)

                    • <shhhhh> :-)

      • Re: (Score:2)

        by necro81 ( 917438 )
        I suggest zooming out on your timescale. Most of human history has been pretty stagnant or experiencing slow rates of progress. Your grandpa saw huge change within is ~80-year lifetime. Now consider 10 such lifetimes of...practically no change. People of the 1400s lived pretty much the same as people in the year 600. Go back a bit further, and for the whole stretch from around 10,000 BCE to 100,000 BCE, there was hardly any change in how people lived their lives.

        Folks today, with good reason, assume

        • I suggest zooming out on your timescale. Most of human history has been pretty stagnant or experiencing slow rates of progress. Your grandpa saw huge change within is ~80-year lifetime. Now consider 10 such lifetimes of...practically no change. People of the 1400s lived pretty much the same as people in the year 600. Go back a bit further, and for the whole stretch from around 10,000 BCE to 100,000 BCE, there was hardly any change in how people lived their lives.

          Folks today, with good reason, assume that progress is 1) inevitable, and 2) monotonic, if not continually accelerating. I am less sure.

          Now to throw a wrench, but don't forget 3) crabby if it doesn't happen at the rate they want

    • Re: (Score:1)

      by Tablizer ( 95088 )

      The plutocrats are looking for tax havens because they have too damned much money.

  • Most startups (or businesses in general) will fail if you look at them over a long enough period. Sometimes market conditions or other circumstances will expedite the process and kill a few more that might have otherwise hung on for a while longer otherwise, but over longer timespans that rate of failure is generally consistent. This isn't a problem (it's a good thing!) because new startups would be unable to form without an available talent pool that includes people who may have learned a thing or two from
  • The government is no longer breathing down their necks, coercing them to hire multiracial lesbians and mentally unstable disophoria suffers. So now the only ones that will crash and burn due to mismanagement are the ones that do so on purpose.

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