This document discusses common reasons why startups and scaleups fail and provides recommendations for success. It summarizes that most failures are due to running out of money or not achieving product-market fit. It recommends optimizing for "agency," which means making decisions as close to the front lines as possible, pushing decision ownership down, achieving appropriate but not too much alignment, and removing barriers to necessary resources. Done well, this approach can lead to "hyper agency" and business success.

1. THE REAL REASON
START-UPS AND SCALE-UPS
FAIL
(and what to do about it)
@Mark_Logan1
mark@ipso-facto.biz

5. • RUNNING OUT OF MONEY?
• PRODUCT-MARKET FIT?
MOST COMMON
FAILURE PATTERN

11. Size
Productivityperperson

12. 1 sq.m

13. Size
Productivityperperson
Business
City

15. Number of employees
Agency per
employee
Employee 4 Employee 104 Employee 204

16. PEOPLE
(capacity)
PROCESS
(dynamics)
STRUCTURE
(statics)

17. When growing an organization:
Optimize firstly for Agency

21. Executive Management
Senior Management
Middle Management
Front-line Teams
Make decisions as close
to the business front-line
as possible.
DECISION
LATENCY

23. DECISION
INTENSITY

24. Decision Latency
DecisionIntensity

25. High Agency
Requires
High Decision Intensity

27. Alignment
NetBenefit
Too Little Optimum Alignment Too Much

28. Too much alignment
is bad for Agency

30. Time
% of users still
active
80%
50%

31. Product-Market
fit is a process,
not an event.

32. MARKETING
_
We acquire users
PRODUCT
ENGINEERING
_
We build features

33. MULTIPLE NETWORKS
Functional Task Innovation
Hierarchical Cross-functional Spontaneous

34. Organize and Optimize
for the dynamics of
your critical flows

35. Optimize for Agency:
• Invest in Individual Competence
• Push Decision Ownership to the front line
• Appropriate Alignment
• Remove Barriers to Necessary Resources

37. HYPER
AGENCY

38. THANK YOU
Mark Logan | Email: mark@ipso-facto.biz | Twitter: @Mark_Logan1