alt Hacker NewsI'm wondering if the culture of an "exit plan" may be a contributing factor.
I grew up in a world, where companies were supposed to be ongoing concerns, with no end in sight. You established a company, and worked towards achieving at least an equilibrium, if not growth. Most brick-and-mortar companies are like this. The focus is on the product/service provided by the company, and all efforts are devoted to maximizing efficiency and steady profitability. Plans are made with a long view, as the company needs to be around to support their product. I know a lot of folks that own/run standard companies. None of them want to sell the company (it does happen, but it's an unusual thing; usually around the time they want to retire).
A standard company might consider an IPO to be their "exit."
Tech companies seem to have the company as the product. They have a plan to "exit," i.e. sell the company. That means they work on making the company, itself into an attractive package, and their product/service is simply a tool to maximize the company's attractiveness. In this case, descending into debt, in order to make the company look good in the short term, makes sense.
I could see this resulting in a situation, where the product made by the company is doing OK, but the company is not succeeding in being sold, so is considered a "failure."
Replies
A start-up needs to have an exit to pay back investors. A company that isn’t hoping to exit is just a lifestyle business. Both are valid options, but very different tactically.
You’re right that the underlying incentives are very different. Traditional businesses are built to last, so the focus is naturally on steady profits, good operations, and long-term customer value.
In tech — especially with VC money involved — the company itself becomes the product. An exit isn’t a nice-to-have, it’s the model. That pushes founders toward growth over profit and narrative over durability.
It doesn’t mean tech companies are “fake,” but it does mean a startup can look busy and promising while still drifting toward failure if the long-term fundamentals never arrive.
Some of the strongest startups today are the ones that intentionally step away from that exit mindset and build for resilience instead.