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Rethinking Startup Success and Measuring Milestones

Ariba Shahid, a Pakistan correspondent for Reuters, recently shared a series of tweets discussing the challenges faced by startups and their potential impact on the economy. In her first tweet, she acknowledges that startups often fail, especially considering the current global funding crunch and the less-than-ideal local economy.

She points out that since startups are not funded with public money, the level of accountability to the public is not the same. Venture capitalists (VCs), who are accustomed to taking risks, have low odds of being audited. However, the consequences of a startup shutdown can have negative spillover effects.

She highlights the problems associated with startups raising large amounts of money at high valuations and then rapidly depleting those funds. This type of approach is deemed frivolous, as it assumes that the inflow of funds will remain constant.

Ariba emphasizes that the impact of startup failures, including layoffs and their effect on existing businesses, is not adequately quantified. She also mentions the need for corporate governance across the board, emphasizing the importance of accountability in order to address these issues effectively.

She also refers to an article by @SiddiquiZuha, shared in one of her tweets, which discusses the spillover effects and bursting of bubbles in startups. The article specifically focuses on the collapse of Airlift, an e-commerce company, and the lasting impact it had on gig workers in Pakistan.

Ariba calls for a shift away from celebrating arbitrary milestones like the “biggest round” or “largest valuation” in the startup ecosystem. She suggests that these competitions can be counterproductive and encourages focusing on more meaningful indicators of success.

The tweet thread also includes responses from other Twitter users. For instance, adeel adil mentions that startups often depend on monthly VC funding, and once the funding is withdrawn, it becomes optimal to freeze operations.

Khawar Ikhlas adds that many startup failures can be attributed to mismanagement, corruption, and pilferage by influential individuals within the industry.

Overall, Ariba Shahid’s tweets highlight the challenges faced by startups in the current economic climate, the need for better corporate governance, and the potential consequences of startup failures on the broader economy.