Startup failure in Norway: celebrated on one side, shamed on the other, and understood by neither
There are two camps in Norway in the ways they talk about a startup that dies. And most startups die. Some fast. Most of them slowly, over many years.
One way of talking comes from inside the startup world itself. You hear the phrases. Failure is the cost of trying. The founder learned, and now it is time to move on. All credit to the founder who took the risk. And similar. In the end, nobody cares to go through what actually went wrong. The other way comes from outside the startup world, from the older established business world and parts of the financial press. There, a failure is talked about as a failure. Something to be ashamed of. It looks like waste. Too much money lost, and too many broken promises.
People usually end up on one side or the other without being aware of it. Both camps hold a piece of the truth, and between them they lose all the nuance and depth and leave a hole. Neither one asks the only question that matters afterwards. Was this failure avoidable, or was it not? The first camp produces stories that skip the hard parts. The second produces shame and silence. Neither produces the examination that would tell you what actually happened.
I have always been the kind of outsider who does not like being placed in a camp without noticing it happen. A physicist does not work that way. So I ended up looking at the hole and examined it from both sides.
But first let me tell you about a relevant incident. Who it was and who did what does not matter. About five years ago I watched someone from outside the startup world ask a fair question in the press about a shooting star, a fast-growing, fast-raising company that was on everyone’s lips. He asked whether the numbers would ever add up, given the kind of business it was and the unit economics underneath it. The reaction was not a discussion. It was a public fight. He was attacked for not understanding innovation, for being too cautious, for missing what the new economy was about. The startup world closed around the company, and the questioner became the outsider who did not get it.
I was watching from the side, and I could see what he saw. The numbers did not add up, and they would get worse, not better, the bigger the company got. I said nothing in public. I did not dare to lose my standing as someone who understood the startup world and supported it. I knew enough to ask the question. I did not ask it. The company collapsed a few years later. The questioner was right. The people who had attacked him did not go back to him, and both camps moved on to the next thing.
Before this gets read as an argument against ambition, it is not. The optimism that builds companies is not the problem, and the people asking sharp questions from the sidelines are not automatically right. The problem is that the question itself, the one about whether the foundation holds, dies in the gap between the two camps. One side will not ask it. The other asks it in a way the room has already learned to ignore or dismiss.
Then it was my turn, and I did not ask it of myself either.
I used to think Tørn failed for many reasons, all arriving at once, within one year. Someone called it the perfect storm. The term made sense, so I started using it myself. The capital market contracted sharply. The DIY market tightened. A major supplier walked away. Germany, which was supposed to rescue us, got postponed. All of it alongside three rounds of downsizing. Each reason was true on its own, and together they made a story I could tell people, and believe myself.
In the months after Tørn I started working with other companies, and the story stopped holding.
The companies I looked at were not failing for many different reasons. They were failing for the same reason, wearing different clothes. A startup moves past its current stage before it has secured the proof that stage should have required. It hires, it spends, it raises, as if the proof were already in hand. Months or years later the missing proof surfaces, and by then the hires, the spend, and the story told to investors have hardened into something too expensive to unwind.
Most companies never look this closely at their own ending. Very few do a postmortem. Most just shrug. It was bad luck. It was a shame, but this is how it goes, and they move on. The ones who do look usually start at the end, with running out of cash, and then write something on the death certificate. No identified need. Poor product-market fit. Premature scaling. Broken unit economics. The wrong team. When I looked at the companies in Norway and brought together similar statistics from the US, I stopped reading these as separate diseases. They are the same mistake, caught at different stages, given different names.
That is what happened to us in Tørn, and I can now name it at each step. We built supply before we understood demand. We committed to economics that worked on the first customers and broke when we tried to acquire more of them. We expanded into a second country before the first one worked the way we believed it did. Every name on our certificate would have been recognisable from any study of why startups die. None of it felt avoidable from the inside. All of it looks avoidable now.
This is what I keep coming back to. Some failure is the honest cost of building something new, out at the edge of what is known. Those bets are supposed to fail sometimes, and no discipline removes that risk. I am not arguing against that kind of failure. But that is not what I was seeing. I was seeing companies get wrong the things that other companies had failed on before them. It just keeps repeating everywhere.
What surprised me, once I started asking questions, was how unwilling people are to look. Not founders only. Investors, boards, advisors, the whole ecosystem. The pattern is not hidden, and many people half-see it, but almost nobody wants to examine it out loud. I think the reason is that the last two decades made it affordable not to. Capital was abundant, the next round was usually available, and a company could outrun a weak foundation long enough for the question to stop mattering. When money is cheap, an avoidable failure looks like an acceptable loss. You write it off and fund the next one.
That era is already over, and it changes what a failure costs. Every avoidable failure is a waste, and the waste does not stay private. Investors lose money they now raise with difficulty. Employees lose jobs and years. The same scarce talent disappears into companies that were never going to work and does not come back easily. The investor who takes the write-down grows more cautious about the next unfamiliar idea. In a small ecosystem, these costs do not get absorbed quietly. They compound.
What troubled me most afterwards was not that Tørn failed. It was that I had felt something was off the whole time, and ignored the feeling. I have asked myself why, and the honest answer is that the capital came with pressure attached. Raising money felt like validation, like proof that the company was working, and the message underneath it was always the same. Go. Use the money. Move fast. Stopping to ask whether the foundation held would have meant slowing down at the exact moment everything around me was rewarding speed.
When I went back through the companies I had studied, the failures seemed to start at the same kind of moment. Not at the end, when the company ran out of money, but earlier, when the big commitments were made. The first serious hires. The product built out. The expansion into a new market. Each of those commitments rested on assumptions that had not yet been tested, and there was a short period beforehand when testing them was still cheap. Once the commitment was made, the assumption hardened into something expensive to question, and usually nobody went back to it.
Those moments, and the questions that are still cheap to ask inside them, are what I am writing my book about. I wrote it as the thing nobody handed me.
The avoidable startup failure is available for pre-order signup now.
Any comments or input? I can be reached at contact@anjali.no