• “Zombie Start-up”… FYI Financial Expertise

  • Zombie Start Ups?When I first heard the term “Zombie Start-up” I thought Stephen King ran out of ideas and turned to recent business trends for his muse. Or, maybe it was a new energy drink brewed especially for the undead to kick start them in the morning. No, I found out that it refers to start-ups that were able to secure financing and have enough money for now, but aren’t growing fast enough to sustain the business at the pace needed to keep the company viable. Because they are stalled, securing additional financing or a comfortable exit, a soft place to land, isn’t viable either.



    Several trends are being considered by these companies. Connecting with a restructuring firm is an option as is offering new products and services. While offering new product or services could inject additional capital, it could also take your eye off the ball and not address the real problem. It gets in the way of a sound business philosophy about start-ups … do one thing well.

    Yet another trend is to team up with a start-up with a similar zombie look in the old C-Suite. Yeah, hitch my wagon to somebody else who can’t make it out of the woods. I don’t like this one. Possible exception of course could be found if the shortfall of one, and the strengths of the other are complementary. Where for example one start-up has a product that has poor packaging but a great product, connecting with a start-up with terrific packaging experience but the product suffers. That might work.

    While these undertakings are interesting, I found little written about how I would go about solving the problem. Start ups are hatched by a great idea and people with a vision. Frequently however it’s someone who has the creativetechnical ability to create the product or service but may not have the management skills to drive the business. Frequently the ancillary disciplines and back office foundation has been left off of the business plan or designed poorly. The thought is, creating the product and perfecting the product is “the hard part”. The other things, the back office, can come later.

    I’d start by scrapping the original business plan and rediscovering the path forward. Challenge the things that are considered a given. Are the objectives still true? Are the methods still practical? One thing for certain has changed. If the end game was for the big score, it’s not any more. At least in the short term it’s to survive. The business plan failed and needs to be redesigned. The old adage about hindsight being 20/20 is conservative in this case and could be better than 20/20 because assumptions are clearer …. what NOT to do is evident.

    Objective direction in grey areas can support the business and the lack of expertise in those disciplines. Lack of capital, providing the product is sound, is most likely either a marketing plan that doesn’t work or poor cash flow planning from the start. If marketing isn’t in your core business DNA find someone to test your assumptions. Same holds true for IT, HR, legal and finance.
    We will be discussing ways to transition your business from a horror story doomed to inevitable extinction to a “Best Selling Thriller” with recurring sequels. You have the creative / technical ability to create the product or service, but may need help in other disciplines to drive the business.

    Taking Care of Business” with the team from FYI Business Consulting & Outsource Services. Tune in LIVE at 3pm – Tuesday April 9th at WTER

    Zombie Start-ups

    FYI-Group Outsource Services