An article has been published on the online pages of the University of Massachusetts (UMass Amherst), devoted to the bankruptcies of the largest high-tech startups last year. Lado Okhotnikov, founder of the rapidly growing Meta Force community, offers his analysis of these events.

The expert touches on such an interesting topic as the bankruptcy of a number of promising startups in 2023. Using examples from companies as diverse as Cruise, Convoy, WeWork, IRL, and Byju's, he identifies failures in strategic planning that prevented these promising projects from surviving unexpected external challenges known as "black swans".

Cruise is known as an ambitious startup aimed at releasing a self-driving system. At its peak, the privately held company was putting hundreds of robotaxis on the streets of San Francisco. But in October 2023, after a series of accidents, one of which resulted in the death of a pedestrian, Cruise's license was taken away, and it was all over for it.

Convoy, one of the American market leaders in the field of IT solutions for freight transportation, has managed to develop a single, convenient platform for shippers and carriers. Before the arrival of COVID-19, the company employed about a thousand employees, and its capitalization approached $4 billion.

At first, it seemed that the pandemic was only opening up new opportunities for Convoy: taking advantage of a short-term rise in prices, the company began investing in business expansion. But soon the crisis hit the logistics market with renewed vigor. A sharp increase in the key rate by the US Federal Reserve finally finished off Convoy, and in 2023 this FreightTech-startup declared bankruptcy.

WeWork, the coworking startup, experienced rapid growth and an equally rapid collapse. Founded in 2010, the company has attracted billions of dollars in investment and was valued at a sky-high $47 billion heading into its 2019 IPO.

The scandal surrounding WeWork's failure to provide required reporting has severely damaged the company's reputation. The coronavirus pandemic, which caused a drop in demand for office space, led to the bankruptcy of the once promising project.

IRL is a well-known unicorn startup that has proposed a number of innovative solutions in the development of online platforms for holding joint events. The company's rise was interrupted in 2023: the SEC was able to prove that out of a 20-million-strong audience of community members, 19 million were bots. IRL's days were numbered.

Byju's completes the parade of failures: in 2020, this decacorn was at the top of its game and showed unbridled growth. As it soon turned out, growth was extensive and did not rely on the effective integration of acquired EdTech-startups.

In addition, Byju's did not provide adequate transparency: the company did not provide any financial statements in 2021. After this, its shares collapsed; at the beginning of 2024, it was valued at only $200 million.

Summing up these stories, Lado Okhotnikov concludes that attributing everything to “black swans” would be a mistake. The expert analyzes in detail the mistakes made by the management of the listed companies and points out solutions that could help top management avoid financial collapse.

Read more about the problems of these companies and their solutions, as well as about the risk management and risk diversification strategies that Meta Force follows in the оriginal articlе.

About Meta Force

Meta Force is developing an innovative metaverse that meets the standards of decentralization, transparency, security, equity and participant convenience. The team assembled by Lado Okhotnikov includes talented and creative blockchain developers, economists, and VR and AR specialists. The company is building a reliable platform for users and investors working in the field of GameFi and DeFi.

Based on Dan Michael’s materials

The Head of Meta Force Press Center

press@meta-force.space

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