In this piece I want to describe the "zombie startup," based on companies I ran into directly. What these companies had in common wasn't that they failed outright or shut down overnight. The opposite: they kept existing, somehow. But when you looked at how the product, the company, and the user relationship changed over time, you could see there was no healthy progress anywhere. From those experiences, I tried to work out when a startup turns into something that keeps living without actually moving forward, and which signs give it away.
When you leave the main avenues of a city and walk into the quiet side streets, you find shuttered shops. The goods are still inside, but nobody comes or goes, and nobody opens the door or stands behind the counter. Maybe the rent is still being paid. If the place was bought outright, it just sits there taking up space. So how do these shops keep existing? I don't know the answer. But in tech there are plenty of companies like them, somehow surviving without closing and without moving forward. We call them zombie startups.
A zombie startup doesn't close. If it has a user base, it gets through the day on the revenue that base brings in. If it has no users, it runs at a loss. In both cases the team learns nothing new, the product doesn't improve, and the user relationship doesn't get stronger. The company just keeps existing.
These are places with no progress, no learning, and no growth. They don't really live, and they aren't fully dead.
Symptom 1: How You See the User
Let's get the basic question out of the way first: what was a startup again? A startup is an early-stage company built to solve a problem with an innovative, usually technology-based solution, aimed at fast growth.
The part worth underlining is "fast growth." Founders sometimes build an ideal customer profile in their own heads and act as if they know, by heart, every thought and every behavior of that user. They defend it by saying "we know the industry." As a result, while running an early-stage startup, they can drift into a way of building that is disconnected from the user. The moment they disconnect, they start making a product for an audience that never existed. They try to build something nobody asked for. They have drifted away from the basic purpose of a startup.
In The Lean Startup, Eric Ries states that purpose clearly: to build a stable company that works and turns a profit. But at the start the company has neither the structure, nor the knowledge, nor the customer to pull that off. You reach that level through learning loops you run again and again, by working close to the user.
Steve Blank puts forward the idea of "get out of the building." As if there's an emergency, get up from behind the computer and talk face to face. You can do this without physically going outside too. All of this closeness-to-the-user work can be done digitally. What matters is to stop coloring cells in a spreadsheet and look at the face of the user you are designing solutions for. Go where they are. Reddit, Facebook groups, forums, wherever your users hang out.
To give a physical example, in 2025 I went office to office doing user interviews for a project. Even though these were unplanned, drop-in visits, people didn't hesitate to give me hours of their time. People show no resistance to having their problems heard and a solution looked for.
If you drift away from the user, you meet the first symptom of a zombie startup.
Symptom 2: The Company Shows No Signs of Life
Look at a startup's website or social media. In a zombie startup, none of it has changed in a long time.
Customer acquisition usually starts with a social media ad and continues when the user lands on the site. That landing page is where you make first contact with the people you're trying to reach. A customer can decide in the first few seconds. They can give up on the product you're offering, or run into a design that confirms their doubts. This is why the landing page experience has to be improved continuously. The first version of the landing page will not be perfect, of course. What matters is learning from the user's contact with it and improving it constantly. So you talk one on one with users and prospects, run A/B tests, watch what people understand on the page and what they miss, and keep improving.
A landing page that hasn't changed in a year or two, that shows no sign of getting better, is a serious problem. As a PM, the first thing I think about a company or product in that state is: "They're probably not listening to their users or watching their behavior." If we don't value the user, what's the point of any of this work?
The same thing shows up on social media. You find startups with no presence at all, no interest in talking to users, and still fully sure of themselves.
Symptom 3: Waiting for a Savior
Then there's the waiting. Founders who move with the belief that "once we find an investor, things will fall into place." They hold the idea that an investor's arrival will suddenly create a large user base, so the real work can start after the investor shows up.
In this state the company doesn't move. It keeps building the product while staying out of contact with the user, waiting for some outside event one day to fix everything.
So the work the startup should be doing today keeps getting pushed into the future. For something to change, they first wait for something else to happen through outside intervention. And the company stays exactly where it is.
Why This Happens
When the symptoms are this visible, why do founders keep living inside them for years? There are two reasons.
1. Denial, ego, and social pressure.
The startup goes through all this grief and the founders still don't shut it down. Because their title says "Co-Founder," and over time they've built their whole identity on it and tied themselves to it. On top of that comes social pressure. When they close the company, they're afraid people will gossip that they "gave up" after all that effort. Instead, they want to hear "look how many times he fell, how many times he went broke, and he still never quit."
2. Not knowing the way out.
Experienced founders and investors say the same thing about this ecosystem: "One of the biggest mistakes is not being able to end a project." There are many zombie startups still "alive" only because the founder refuses to close them.
Another problem is simply not knowing the way out. I'm not talking about the founder who isolates themselves saying "we know the industry" while everything stays stuck. The opposite: what does a founder do when they notice the state of the company, want to change something, but don't know how to get out of being a zombie startup?
Now to the solutions.
Three Ways Out
1. Pivot
A pivot means changing the direction of the product based on what the user and the market are telling you.
Most people hear the word and imagine something much bigger. "The restaurant didn't work, let's close it and open a boutique clothing store." Or "let's throw out the gym app and build one for therapists." That's not a pivot. That's the opposite: redesigning almost everything from scratch.
The right kind of pivot here is smaller and smarter. Instead of building the whole building and then testing whether it stands, you build only the ground floor. That is, develop a single feature. Then you quickly check whether people care about it. Are they showing interest? Are they willing to pay for it? If there's demand, you add the second feature, then the third. If there's no demand, you pay the price with a cheaper, leaner version and come out of it more efficiently, instead of being left with a product stuffed with features, a pile of spent money, and a sense of uselessness.
If one of the inputs behind the pivot decision is social media ads, the point is to keep moving instead of stopping to question whether social media works. These digital assets don't fall in front of people on their own, the way a shop on a busy street or a product on a shelf does. Someone has to keep pushing them out there.
Michael Seibel says that for the first year after founding a startup, you should sit down at the table every day and ask yourself: "Are we in the right place? Are we solving the right problem?" Keep that awareness switched on. Being closed to new ideas is one of the roads to becoming a zombie startup.
2. Drop the Startup Mentality
You can step entirely out of the "grow fast, burn money to do it" logic and design a slower, profitable company focused on the problems of the users you already have. Pick something close to a business model already known to work, stay close to the first users who adopt you, and own that group.
Aiming to be a profitable company through these methods instead of aggressive growth, and giving up on standing in place in a monotonous way while waiting for an investor to suddenly change the situation, is the Basecamp way of moving.
3. Shut It Down
If even the data gathered for a pivot points nowhere and nothing is improving, the hardest option is also the clearest one.
Close the company and focus on the next step in your life.
This is the most draining choice psychologically. But sometimes it's also the right one. The experience you gained is the most important thing here, and it's what will support your next step. You can take it into a job at another company. Or you can come back with the same team, more mature this time, and enter the market with a completely new product.
All of these are better than staying a zombie.
Being a Zombie Isn't the Same as Failing
Being a zombie startup is not the same thing as failing. The real problem is thinking you're still moving forward without admitting that the company has failed. If you're drifting from the user, not learning, not changing, and still waiting for some outside event one day to fix everything, you need to stop here and question what you're doing.
Every startup has to learn something, change, and move forward. The way to do that is sometimes to pivot, sometimes to give up on being an aggressive cash-burning startup and build a profitable, slow-moving company instead, and sometimes to close the company and continue down another road.
What matters is checking, constantly, whether you're in the right place.