// STARTUP COMPARISON
Zenefits vs Scytl
Zenefits failed in 2017 due to Founder Chaos. Scytl failed in 2020 due to Ran Out of Money. Different causes, different sectors, different eras — but the same simulation outcome.
| METRIC | 🔥 Zenefits | 🔥 Scytl |
|---|---|---|
| Sector | SaaS | SaaS |
| Country | USA | Spain |
| Founded | 2012 | 2001 |
| Died | 2017 | 2020 |
| Raised | $584M | $100M |
| Peak | $4.5B valuation | Elections in 42+ countries |
| Primary Cause | Founder Chaos | Ran Out of Money |
// WHY EACH FAILED
🔥 Zenefits
Founder Chaos
Zenefits, an HR and benefits SaaS, raised $584M and reached $4.5B valuation. Regulatory investigations revealed Zenefits had been selling insurance through unlicensed brokers — a serious regulatory violation. Founder and CEO Parker Conrad resigned in February 2016. The company was fined $7M by California regulators. A later investigation found Conrad had also created software to help brokers fake insurance licensing course completion.
// LESSON
Move fast and break things does not apply to insurance licensing. Selling insurance through unlicensed brokers is illegal in every US state. The compliance cost of proper licensing is the cost of being in the business — not a bureaucratic obstacle to move around.
Move fast and break things does not apply to insurance licensing. Selling insurance through unlicensed brokers is illegal in every US state. The compliance cost of proper licensing is the cost of being in the business — not a bureaucratic obstacle to move around.
🔥 Scytl
Ran Out of Money
Scytl was the world's leading provider of election technology, having processed votes in over 42 countries. It raised $100M from Vulcan Capital and others. In 2020 COVID-19 caused the cancellation or postponement of hundreds of elections globally — Scytl's entire revenue base. Unable to survive the collapse, Scytl filed for insolvency in June 2020 and was acquired by Paragon Group.
// LESSON
Market leadership in an event-driven market is concentrated risk, not a moat. When the event cycle pauses globally, your entire revenue base pauses with it. Diversify revenue streams before a black swan can.
Market leadership in an event-driven market is concentrated risk, not a moat. When the event cycle pauses globally, your entire revenue base pauses with it. Diversify revenue streams before a black swan can.
// EXPLORE FURTHER