A Ballad For The Fallen Startups

Don't worry about what you see, it won't last

Sean Davis Jr
March 09, 2025

The startup industry has been in disarray for a few months. Funding insecurity, shifts in administration, and regulatory pressures are some of the many reasons founders today are shutting down before they can even get off the chopping blocks. Founders understand that volatility is a fundamental part of building a startup. However, these past few months have been more unpredictable than usual. According to Explodingtopics, the current failure rate for startups is ninety percent. One of the biggest challenges startups face today is market uncertainty.

With 2025 off to a controversial start, there are valid advantages and disadvantages that startups are observing. The current administration’s call for deregulation in fintech, energy, and crypto has left many companies salivating in anticipation of laissez faire regulation. These policies or lack thereof will allow tech titans to double down on Silicon Valley’s motto of “move fast, and break things.” Some of President Trump’s executive orders have called for federal agencies to submit regulatory actions for presidential review along with revoking previous directives in digital finance. Moreover, the Securities Exchange Commission has formed a Crypto Task Force to establish regulatory clarity on digital assets. Startups look to the SEC and the legislative branch for regulatory clarity, yet both watchdogs have been experiencing a great deal of turbulence. One of the main reasons for this turbulence is the SEC’s attempt to cut down their numbers by offering workers $50,000 to retire early. Considering there are also several legal cases that will determine how cryptocurrencies are classified, many startups, even the most innovative ones, are in limbo.

In the same breath, businesses are reeling as President Trump plays yoyo with tariffs on Canada, China, and Mexico - our biggest trading partners. Despite increasing investments in tech, tariffs and trade policy uncertainty promise to cripple global growth projections, which will only stifle startup maturation for the foreseeable future. Both economic and regulatory indecisiveness are typically bad omens for startups. While NGO’s and tech advocacy coalitions are calling for regulatory frameworks in AI and cryptocurrency, the fear for many founders is that surviving this market is a losing battle.

So all hope is lost?

All hope is not lost, but to sustain startups must improve their ability to adapt and innovate. Remaining competitive will require Marvel hero-like agility and innovation in product-to-market fit strategies. Based on the latest data, thirty-four percent of startups fail due to an inability to find a market that needs their product. Staying informed while utilizing regulatory sandboxes will be even more paramount as customer trends adjust to the new administration. Through using advanced tools like AI agents and employing predictive analytics, startups can be sure they are off to a much better start than their competitors. In other words, connecting with one’s target audience will help to maximize impact and solve problems that consumers will be more inclined to support.

okay, but specifically what does that mean?

2025 trends are indicating that consumers care more about conscious consumerism, ethical labor and fair trade practices. Founders will have to prioritize using AI to optimize systems, drive costs down, while also doubling their investment in AI, cloud, and data analytics. Accelerating the use of AI agents to cut down on workflows and operational tasks will aid startups in challenges with funding woes. However, in 2025 the supply chain and sustainability will be the two funding priorities for CEOs. The companies that will survive the no man’s land of building a startup must improve their ability to pivot according to analytics. While we know these are uncertain times, startups can find a silver lining through adapting their business models to anticipate shifting trends. One way to effectively do this is to conduct scenario planning to forecast various economic conditions, i.e. interest rate fluctuations, and increased tariffs to name a few.

The future promises to hold many surprises for business owners. Consequently, navigating these waters will be challenging - but not impossible. History tells us that during economic turbulence, businesses that capitalize on providing a need better than their competitors can not only survive the storm, but even ride the wave into liquidity.

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