What do you do if your startup isn't working? #startups
In this episode of Dalton + Michael, What do you do if your startup isn't working? #startups explores escape zombie startups by admitting failure and making radical changes The first step to fixing a failing startup is admitting it’s not working and confronting denial honestly.
Escape zombie startups by admitting failure and making radical changes
The first step to fixing a failing startup is admitting it’s not working and confronting denial honestly.
Many founders operate “zombie startups,” where they internally know the trajectory is wrong but rationalize continuing with excuses.
If incremental improvements haven’t worked for a long time, the business likely needs a radical change rather than more small tweaks.
Taking a drastic swing risks being wrong, but the alternative is effectively staying on a path that’s already failing.
Founders should consider uncomfortable, previously unthinkable actions as a deliberate strategy to break stagnation.
Key Takeaways
Start with brutal honesty about traction and trajectory.
Dalton argues the key first step is admitting there’s a problem—many founders partially know the startup is failing but stay in denial with “cope” and excuses.
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Recognize the “zombie startup” pattern early.
If the company is alive operationally but not progressing, that mismatch is a signal to stop rationalizing and reassess the business reality.
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Incremental improvements won’t save a long-stagnant startup.
If you’ve tried small changes for 1–2 years without results, repeating that approach is unlikely to change outcomes; the strategy itself needs to shift.
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Make a radical move because the status quo is already losing.
Dalton frames it as asymmetric: a radical change might fail, but continuing the same playbook is effectively “dead anyway,” so the downside is limited.
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Choose actions that feel uncomfortably outside your default behavior.
He advises doing something you “would never do on your own,” specifically because your current comfort-zone tactics have proven insufficient.
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Treat “permission to try something scary” as a practical tool.
Founders should explicitly ask what seems too radical or intimidating and try it, using discomfort as a heuristic for potential breakthrough moves.
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Notable Quotes
“Step one is to admit you have a problem.”
— Dalton
“Part of their brain knows they're a zombie startup, and part of them is like, 'Well, you know, but, but...'”
— Dalton
“A bunch of small incremental changes that you've been trying for the past year or two, that hasn't been working.”
— Dalton
“There is a risk that you do something that's radically wrong, but I'm arguing you're kinda dead anyway.”
— Dalton
“What's something that seems way too radical or scary that you never would've thought trying before? This is permission. Why don't you try it?”
— Dalton
Questions Answered in This Episode
What concrete signals tell you you’re running a “zombie startup” versus just being in an expected slow patch?
The first step to fixing a failing startup is admitting it’s not working and confronting denial honestly.
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How do you run a “come to Jesus” assessment without letting emotions or sunk-cost bias distort the conclusion?
Many founders operate “zombie startups,” where they internally know the trajectory is wrong but rationalize continuing with excuses.
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What are examples of “radical changes” founders can try (product pivot, pricing overhaul, distribution shift, team restructure) that fit Dalton’s advice?
If incremental improvements haven’t worked for a long time, the business likely needs a radical change rather than more small tweaks.
Get the full analysis with uListen AI
How do you distinguish a radical move that’s strategically grounded from one that’s just desperation or thrash?
Taking a drastic swing risks being wrong, but the alternative is effectively staying on a path that’s already failing.
Get the full analysis with uListen AI
If you’ve been iterating for 1–2 years with no traction, what metrics or thresholds should trigger a forced pivot decision?
Founders should consider uncomfortable, previously unthinkable actions as a deliberate strategy to break stagnation.
Get the full analysis with uListen AI
Transcript Preview
What are good escape paths?
I think that like a lot of things in life, step one is to admit you have a problem.
Mm-hmm, mm-hmm.
[laughs] And to be honest about it.
Mm-hmm.
And it's, it's surprising how often people are just in denial-
Yeah
... where, like, part of their brain knows they're a zombie startup, and part of them is like, "Well, you know, but, but..." There's, like, all these excuses. There's all this cope.
Yeah. Yes.
And so I think you just have to, like-
Yeah
... get real. This isn't working.
Yes.
We're not on the right trajectory.
Yes.
And then what I would usually tell people is to kinda like have, like, a come to Jesus moment about how you're gonna radically change something about the business-
Yeah
... because a bunch of small incremental changes that you've been trying for the past year or two, that hasn't been working, right?
[laughs] Yeah.
So you need to do something radical.
Yes.
And there is a risk that you do something that's radically wrong, but I'm arguing you're kinda dead anyway.
Yeah.
So again, this is the logic is if, if-
It is
... if, if none of your current efforts have worked, you need to do something that you would never do on your own.
That you could explain.
You need to do something so unc- uncomfortable-
Yes
... 'cause your current tactics haven't worked.
Yes.
Right? And so I'll encourage founders to be like, "What's something that seems way too radical or scary that you never would've thought trying before? This is permission. Why don't you try it?"
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