The Silent Startup Killer: Assumptions You Don’t Question
Most startups don’t die from competition — they die from the stories they tell themselves.Stories that feel true… until the numbers prove otherwise.
The bravest founders I coach are the ones willing to challenge their own logic early — before scale exposes the cracks.(And as a startup mentor who has guided founders toward millions in enterprise sales and investor confidence — I’ve seen both sides.)
A Stanford session this week highlighted the most common red flags that silently weaken business foundations. I’m adding one powerful coaching question to each — to help you take action, not just take notes:
1️⃣ “We’ll make it up in volume.” If you lose money per customer, adding more customers only accelerates failure. (Example: MoviePass burned $150M doing this.)
Q: How do you make the next customer profitable — not someday, but now?
2️⃣ “CAC will drop once we have brand awareness.” Maybe later — but you must prove your current CAC works first. In reality, CAC usually increases when early cheap channels saturate.
Q:If CAC doubled tomorrow, what would remain true about your business?
3️⃣ “We’re ignoring churn for now.” Even 5% monthly churn → ~46% annual churn → destroys LTV. Retention is core to business viability.
Q: What is churn already telling you that you’ve been avoiding?
4️⃣ “Our variable costs are basically zero.” Software isn’t free: hosting, support, payments, tools… “Hidden costs” can blow up margins quickly.
Q: Which cost are you underestimating today that will shock you at scale tomorrow?
5️⃣ “Customers will pay $X because competitors charge $Y.” Your value ≠ their value. Test pricing — don’t assume.
Q: What urgent problem are customers paying you to solve — today?
6️⃣ “We’ll just get venture funding to figure it out.” Capital cannot fix a fundamentally broken business model. VCs want a credible path to positive unit economics.
Q: If capital vanished tomorrow, how would you survive — or win?
7️⃣ “Unit economics don’t matter — we’re pre-revenue.” This is when they matter most. Better to learn early before building the wrong thing.
Q: If the math doesn’t work now, why would it magically work later?
Real Startup Case Studies
Broken Unit Economics Examples
WeWork — Growth masked fundamentally negative economics
Uber Eats (early) — Lost money on most deliveries
Groupon — CAC > customer value acquired
Companies That Fixed The Model
Airbnb — Shifted from paid acquisition to organic growth drivers
Slack — Pivoted from gaming to B2B SaaS with strong economics
Netflix — Moved from DVDs (high cost) to streaming (software scale)
Founder Reflection
Don’t wait for scale to test your economics.
Be courageous enough to face your numbers now — while you still have room to pivot.
When the math works, growth becomes fuel. When it doesn’t… growth is fire.
Because the market doesn’t care about your assumptions — only your results. So be the founder who proves the math early, faces the truth fast, and chooses courage over comfort.
If you’re ready to pressure-test your business model before the world does — let’s talk. Your future company deserves that level of honesty today.