How startups lose their edge
A firsthand account of how "playing not to lose" can accidentally kill your startup
The following was written by a member of the PostHog team about their time at a past startup. We’ve removed identifying details as it’s not meant to bash the company, but be a lesson.
In American football, there’s a strategy called “prevent defense” that teams use when they’re leading late in the game. The logic is sound: give up small gains but prevent big plays, run out the clock, and protect your lead. It’s conservative, it’s textbook, but it often backfires.
The problem isn’t the strategy itself. It’s that you stop doing the things that got you ahead in the first place. You’re no longer playing to win, you’re playing not to lose, and in sports, in startups, in anything competitive, that shift in mindset is how you hand the game to someone hungrier than you.
I know because I saw this happen. I was one of the first 30 employees at a now public tech company you’ve probably heard of. When I joined, it had something special: tight culture, developer-first mindset, and a product-led motion that got us to hundreds of millions of annual revenue before thinking about sales.
Importantly, the founding team kept an iron grip on who got hired, the bar was high, and everyone who made it through understood what it meant to be part of the culture. But you can’t scale to IPO with founders interviewing everyone. You have to let go.
Culture becomes a game of telephone. The message stays mostly the same, but with each repetition, it drifts just slightly. Over years, those slight drifts compound and alter the trajectory of the company into an outcome 5-10x lower than it could have been.
I don’t want this to happen to your startup, so here’s how to avoid it.
When priorities shift
The inflection point came when an IPO became a tangible reality. When there’s real life-changing money on the table for everyone involved, it becomes incredibly easy to make concessions. Suddenly “just this once” starts to sound reasonable.
The person who’s 90% culture fit but has IPO experience? Sure.
The strategy that’s proven but doesn’t quite align with our values? Let’s try it.
An idea that’s weird and fun, but a little out there? Better not to risk it.
Culture wasn’t the only thing that mattered anymore. Instead, we needed people who had “done this before,” experienced leaders who knew how to navigate public company requirements, quarterly earnings calls, and all the machinery that comes with being a real grown-up company.
The biggest example of this was hiring an entire sales team as a siloed function, separate from the product-led sales motion that got us to hundreds of millions in ARR (annual recurring revenue). We needed to grow faster, enterprise sales seemed like the obvious answer, and everyone does it eventually, right?
Prior to doing this, we had a technical team that was consultative-first, helped businesses leverage the products we built, and taught best practices. We were measured on net revenue retention and customer expansion.
That shifted. The technical folks took a back seat to the veteran enterprise sales people, who had no domain expertise or technical knowledge. We became a supporting function in service of sales. It sucked. I watched our existing team who got us so far relegated to supporting the traditional sales team.
I’m not against building out a sales team, the problem was how we did it. It was a completely separate motion divorced from what had actually worked, optimized for what public companies are supposed to do instead of what had made us successful. It was a cultural concession that completely changed the trajectory of the company.
The culture dilution problem
Although we were making a lot of cultural concessions, the company didn’t become a bad place to work. It kept doing good things up and through the IPO and beyond. The culture didn’t become toxic or negative. It just became boring. We stopped doing the wild, wacky, weird things that made us special in the first place.
Culture isn’t some abstract value statement printed on office walls (that’s gross and tacky). It’s every person, decision, priority, and judgment call about what matters. Dilution happens gradually and it’s almost invisible while it’s occurring.
When you’re 20 people, founders set the tone directly through every interaction.
When you’re 200, managers are making calls based on what they think the founders would want, filtered through their own experience and priorities.
When you’re 2,000, you have managers managing managers, and now you’re playing telephone across multiple layers where each person is adding their own interpretation of “what we value here.”
It’s not that people are bad at their jobs or don’t care. It’s that culture is transmitted through observation and osmosis, not through documentation.
Across enough managers and interpretations, the culture becomes distorted. The edges get sanded down, the things that made you special start to feel risky or off-brand. Suddenly, you’re optimizing for what feels safe rather than what actually works.
Playing not to lose
There’s a scarcity mindset that creeps in as you scale, often without anyone noticing it’s happening. You become afraid of:
Losing your culture, market position, and momentum
Making the wrong hire
Taking a bet that doesn’t pay off
Looking stupid to your board, investors, or the market
So you get conservative in ways that feel responsible but are actually corrosive.
You hire the “safe” candidate with the impressive resume instead of the weird brilliant one who might be special.
You pursue the “proven” strategy that worked for other companies instead of the unproven thing that might work for you.
You optimize for not-screwing-up instead of for winning, and the irony is that this is exactly how you screw up.
I watched this happen to our process for building products. At the start, we would say “we need to ship this feature,” have maybe one conversation, and get it done.
This evolved into a process of pitches, presentations, and approvals:
By the time you got to actually building something, the original insight that made the idea good had been committee’d into something safe and unremarkable.
The scarcity mindset is insidious because it masquerades as prudence, as grown-up decision-making, as the kind of thing serious companies with serious responsibilities should be doing. But it’s poison.
How to avoid this fate
The honest truth is I don’t have a perfect answer. Maybe it’s unsolvable as startups scale. Maybe every company that grows past a certain point loses some of what made it special.
But I think there are a few things that matter:
Keep taking big bets. The moment you stop doing things that could fail spectacularly is the moment you stop doing things that could succeed spectacularly. Keep betting on what got you there.
Resist the “experienced” hire. Of course, sometimes you need specific expertise. But the moment someone’s resume becomes more important than their culture fit, you’ve started conceding, and concessions compound.
Question the conventional wisdom. Everyone said we needed a traditional sales team. Everyone was wrong, or at least, the way we did it was wrong. When advice sounds logical but contradicts what’s been working, be very suspicious.
Understand the trickle-down effect. Every hire you make will hire people who are slightly different from what you meant. Every layer of management adds interpretation. This is hard to solve, but promoting from within can help.
Keep teams small and autonomous. With fewer management layers, more of the original DNA is preserved because there are fewer layers of interpretation between the founders and the people doing the work. You can “just do it” rather than running it up the chain.
This means your startup is likely going to be messier and more chaotic. It’s not going to be “proper” or “grown up,” but you need to live with it to become exceptional.
The real risk
For companies with some success and a good culture, the biggest risk isn’t that they’ll become a bad company or fail outright, it’s that they become a fine company that could have been exceptional. They sand down their edges in pursuit of respectability and become indistinguishable from everyone else.
This company is still around and doing good work, but there was a window, a critical 18 to 24 month period, where different decisions could have changed the trajectory entirely. Staying aggressive could have meant 5-10x the outcome. We chose prevent defense and got a respectable result instead of an exceptional one.
For companies in this window, the question is whether they’ll recognize when they start playing prevent defense, notice when the “experienced hire” starts to matter more than the culture fit, and catch themselves optimizing for safety instead of for winning.
Because in the end, prevent defense doesn’t actually prevent anything other than winning.
Written by an anonymous member of the PostHog team, who is also probably one of the only people at PostHog who knows what “prevent defense” is.
🦔💼 Hedgejobs
Want to help us make that 10x outcome a reality (or just learn who wrote this piece)? We’re hiring product engineers and more roles like:
so good, thanks for this post
There is so much value in this post, thank you