Are We Providing Too Much Support to Startup Companies?

This article by was originally published on Medium.

I was in a regional entrepreneurship coordinating meeting the other day where several startup CEOs talked about their experience in St. Louis. While each of these founders came from different industries, AgTech, Mobile Health, and e-commerce, all spoke about the incredible amount of support they get from the St. Louis community. More specifically, they referenced easy access to seed funding, office space, mentorship, and a bevy of networking opportunities.

But it got me thinking, are we too friendly as a startup community? Do we need to be more ruthless or harsh with the startups we interact with? Perhaps St. Louis startups are getting too much support.

Let me explain why this is a problem.

It Doesn’t Build Thick Skin

I’ve spent the last few years both observing mentors and acting as one. Yes, founders do need encouragement from time to time when things get tough. And yet, many mentors shy away from showing “tough love” to the companies they interact with because it’s uncomfortable or awkward.

We need to develop and train mentors who are willing to say, hey, I think you need to fire your CTO, or, your sales pitch is horrible, you need to improve your ability to sell or find someone who can. If all an entrepreneur hears is “Great job, you’re killing it!” then they’re going to be in for a rude awakening when they start hearing no from customers, investors, or strategic partners.

As a community, we need to start giving these founders the advice they need to hear, good or bad.

Support Systems Don’t Necessarily Work

Some new research from the Kauffman Foundation suggests that incubators or similar programs might not be as helpful as many people think. Over the last five years, the number of accelerator and incubator programs as exploded, and many of them don’t offer quality services for their companies.

Particularly on the incubator side, these organizations seek to keep struggling companies alive instead of pushing them out of the nest or letting them die gracefully.

They receive grant funding that is largely dependent on their ability to keep companies alive. Many mentoring organizations are nonprofits themselves and have a tough time turning clients away. There’s a “never fail” or “we’re here to support you” you mentality at play here that’s dangerous under certain conditions.

There’s no incentive for incubators to let these ventures die —and that’s a problem.

Zombie Startups Consume Valuable Resources

No one wants to take responsibility for a startup death that happens on their watch. Instead, we watch these “zombie” companies roam the halls of our incubators and co-working spaces. Neither alive nor dead, these companies make enough money to stay afloat or their founders opt to do some consulting or part-work to pay the bills. Nevertheless, these companies continue to take up valuable community resources in the form of time, money, and social capital.

So, what’s really at stake? Am I on some sort of Rambo-inspired blood-thirsty mission to kill off struggling startup companies? Of course not.

As with any discussion, there’s certainly a gray area here. Just because a startup isn’t growing, doesn’t mean that it needs to die.

We just need to get better as a region in identifying the point at which that should happen. No one wants to have the unpleasant job of cutting life support, but then again, resilient startup founders should be able to push on and thrive with our without the support of a mentoring organization or co-working space.

Allowing Startups to Die

Any robust startup community is effective at recycling entrepreneurs back into their ecosystem. Companies will fail, founders will split up, and employees will get fired. As long as we have a good pipeline of getting these people back into the game, we won’t have a net loss when it comes to talent. We can’t be afraid of these types of changes — it’s inevitable and we need to be comfortable with that happening in our community.

And that, my friends, is the Startup Circle of Life.