Everything Hidden Eventually Comes to Light

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Not long ago, the collapse of Bench — an accounting startup that raised $100 million — made waves just before the New Year.

For many, a startup raising a significant funding round is still seen as a signal from the market. But the nature of that signal is often misinterpreted: a booming market, a promising idea, or venture capitalists aligning their focus.

In reality, none of this means much. It’s crucial to remember: flashy media coverage and a flood of venture capital do not reflect the real picture.

I know plenty of founders personally who pivot their projects every three to four years, chasing the next hot trend. In truth, they’re just running in circles.

I became curious: what exactly led to Bench’s collapse? First and foremost, I wanted to understand for myself so I don’t make the same mistakes. Perhaps you’ll find these insights useful too.

Key Lessons from Bench’s Failure:

1. Growth Without Profitability

Despite raising over $100 million, Bench prioritized rapid growth and diversification (e.g., launching Bench Banking) without achieving sustainable profitability. I recall a VC telling me three years ago: “Why are you spending so little? Why should we even give you money?” Sic!

2. Scaling Too Quickly

Scaling services and maintaining a large team (~650 employees) likely led to disproportionate expenses outpacing revenue growth. Lesson: don’t rush to hire. Delay it as much as possible.

3. Intense Market Competition

The fintech market is saturated with fierce competition from both established players and emerging startups, making it extremely difficult to retain market share.

4. Macroeconomic Pressures

Factors such as rising interest rates and tighter funding conditions may have limited Bench’s ability to raise additional capital.

5. Strategic Shortcomings

The sudden collapse suggests flaws in strategic planning or an inability to effectively respond to financial challenges.

In short, there’s nothing new here. We’ve seen this story play out a million times and will likely see it a million more. I suspect by this fall, we’ll see a wave of collapses from AI companies — particularly those creating wrappers around ChatGPT or AI agents.

Key Takeaways:

Product First, Then Scale.

Don’t scale until your product is ready.

Focus, Focus, Focus.

Avoid chasing shiny objects. Stick to your strategy.

Watch the Numbers.

Poor unit economics have killed more companies than OpenAI ever will.

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About the author


Artem Gladkikh
Founder & CEO, Signum.AI
Building The Ecosystem That Transforms Marketers Into AI-Driven Experts.

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