Why Some Startups Scale, While Others Stall...

We’ve all heard the classic fable about the Hare and the Tortoise, where patience and persistence win the race. But in startups, that wisdom doesn’t hold up. Moving too slowly, waiting for the perfect moment, or avoiding risks can kill your company before it even gets a chance to grow. In this game, one needs to be fast and execute relentlessly.

Working with many founders at P2S, common challenges that make or break startups have become clear. Here's what separates those who scale from those who stall.

1. Choose the Right Problem And The Right Timing

Not every problem is worth solving, and not every market is ready. Successful founders focus on what matters to people right now. If customers don't care enough to pay for a solution today, no matter how smart or innovative the product is, it won't gain traction.

Founders sometimes get too fascinated with an innovative idea or a technical challenge. But if the timing isn't right and the market isn't ready, then what is it for? Great founders ask themselves: “What can be built?” and “What people are ready to buy?”

Key question: Why is this problem worth solving today?

2. Founder-Market Fit

Product-market fit is crucial, but at the earliest stage, founder-market fit can be even more important. As an investor, I would be confident in the founder with a deep understanding of the problem – whether through a personal story, industry knowledge, or years spent working in that space.

People with relevant experience will intuitively make the right product decisions even in unknown settings, as they've lived through that problem or been close enough to see all its nuances.

Key question: Why are you the right person to solve this problem?

3. Ship Fast and Learn Even Faster

Startups rarely fail because of one wrong move – they fail because they're too slow to figure out what works. The early stage is about learning, adapting, and moving fast. Founders should constantly test assumptions, learn from customers, and adjust courses.

Those who try to build a perfect product from day one often end up stuck. Success comes to those who stay close to customers, ship fast, and learn even faster. 

Key principle: Speed of iteration is your real competitive advantage.

4. Customer Obsession

The company's success is determined by customers – not investors, press, or competitors. Founders who truly listen to customers and stay close to their problems build better products, period.

That means constant conversations, active listening, and sometimes setting aside your own ideas to focus on what customers actually need. The earlier a founder builds this habit, the stronger your product will be.

Key question: What are your customers doing today to solve this problem, and where does that fall short?

5. Building the Right Early Team

Your first hires define your company. They shape the culture, the pace, and the problem-solving approach. Recovering from weak early hires can be hard – and it's easy to lose critical time if people are not fully aligned with your mission.

At this stage, you're not just hiring for skills. You're hiring people who believe in the mission and are ready to live through the ups and downs of an early startup.

Key principle: Hire people who are in it for the mission, not just for a job.

6. Fundraising Smart, Not Just Fast

Raising money is not just about how much you raise – it's about who you bring on board. The right investors can help you grow, open doors, and support you when things get tough. The wrong ones can pull you off course or push for growth at any cost.

Chasing the highest valuation or fastest check may be tempting, but it's worth thinking carefully about alignment. You want investors who understand what you're building, share your vision, and are ready to support you beyond just writing a check.

Key question: Will this investor be a true partner, not just a source of capital?

7. Ruthless Focus and Prioritization

Startups die from doing too much, too early. It's easy to get distracted by new ideas, but at the early stage, you win by doing one thing really well, not ten things halfway. Focus on what moves the needle and say no to everything else.

Key principle: Focus is saying no to 99% of things that don't matter.

8. Resilience and Emotional Stamina

Founding a startup is not a straight line – it's full of setbacks, tough days, and moments of doubt. The founders who make it are not always the smartest or the best connected – they're the ones who keep showing up and figuring it out, even when it's hard.

You will hear a lot of "no." You will have days when nothing seems to work. That's part of the journey. Staying in the game long enough to learn, adapt, and eventually break through is what separates those who make it from those who don't.

Key reminder: Startups are a marathon at sprint tempo – you need to pace yourself to stay in the game.

Final Thoughts

While we have been fortunate to back early teams that turned their vision into successful companies, we know what challenges the teams went through on their way. If you are a founder, focus on the right problem, move fast, obsess over your customers, and build the right team around you, investors won’t overlook your startup and will be willing to become your partners along the way.