Some Companies Should Be Helped to Die Well
Clay CEO Kareem Amin says finished companies should be allowed to wind down, spin off new ideas, and grieve, rather than scale into zombies.
Invest Like the Best with Patrick O'Shaughnessy · Kareem Amin - The Unusual Approach to Company Building - [Invest Like the Best, EP.478]Kareem Amin, the co-founder and chief executive of the software company Clay, was asked near the end of a long conversation whether every business should try to scale. He answered with an odd proposal he has been turning over with friends.
"If your company has achieved its mission, should we help it pass?" Amin said.
Amin argues that we rarely ask the prior question of whether scaling every business is good. He asks whether we, as a society, should be incentivizing all businesses to scale. He points to the familiar neighborhood case, a donut shop or a restaurant that was excellent when it was small and gets worse as it grows.
He traces the thought in part to the history of the company itself. He dates the idea to groups formed in the 1500s, including the East India Company, that came together for a purpose, did the work, and then might disband.
His example is Microsoft. Amin recalls its early mission to "put a computer on every desk," a mission he says was achieved, and then watched the company adopt broader missions around devices and services. He is not criticizing the company, he says, but asking what should happen in that moment after the original purpose is served.
His term for an alternative is a death doula for companies. Just as a death doula helps a person leave life with care, he imagines a set of supports that would help a finished company wind down, spin out new ventures as its children, and let founders and employees grieve and move on. Without that help, he worries that companies kept running after their purpose is done "become zombies or become worse versions of their former selves," Amin said.
Amin notes there are about 1,500 private companies valued at more than one billion dollars, known as unicorns, and suggests some of them are already zombies. He admits the tension in his own position, because he says he wakes up thinking about how to make more of Clay. There is no support for companies to grieve and move on: "because no one talks about endings."
Questions people ask
What is a death doula for people?
A death doula is a nonmedical guide who helps a dying person and their family prepare, stay comfortable, and talk through what is happening. Unlike hospice nurses or doctors, doulas focus mainly on emotional, practical, and spiritual support before and after death.
What is a unicorn company?
A unicorn is a private startup valued at one billion dollars or more. The term became common in the 2010s to mark rarity, but there are now well over 1,000 worldwide. A zombie unicorn generally means one that cannot grow into its valuation but also does not shut down.
How does a company normally shut down?
In the United States, a company usually ends through dissolution, a sale, or bankruptcy, with assets sold and creditors paid under state and federal law. There is no standard process for honoring the work or helping employees transition emotionally. Amin is imagining a cultural and institutional addition, not a legal replacement.