How Startups Are Coping with the Pace of Rapid Iteration

Something truly shocking rocked the startup world recently: the chairman of Cubo AI, a well-known baby-monitor startup, killed the company's CTO on the spot after an exit negotiation went sour. When I saw the news, it felt like a plot even a TV drama wouldn't dare write — yet it happened in real life. Because the company left an enormous trail of material online — internal meeting notes, and a ten-thousand-word resignation letter the CTO had written before he was tragically killed, laid out in exhaustive detail — the news coverage ended up being extraordinarily thorough too.

Necessary Understanding》

A Different Era: Faster Fundraising, Faster Technology Cycles

I didn't know either of the people involved personally, but because of the startup's profile, many investors I know and quite a few Facebook friends of mine knew both the individuals and the company — everyone was stunned.

Plenty of people have already written about the criminal case itself, so I'd rather dig into something more concrete: why startup chairmen and CTOs so often end up in conflict, the different pressures I've seen software startups versus hardware startups face, and how to avoid this kind of tragedy.

The key difference between startups today and those of the past is that you can no longer sit on a single technology or trade secret for five or even ten years while you slowly grow. That creates a new kind of bind: you can't rely on retained earnings to gradually fund expansion — you have to raise capital and scale up relatively fast.

I've met more than a few chairmen of "hidden champion" companies — typically 30 or 40 years older than me — who founded their businesses in the 1990s or earlier, building up both technology and capital entirely on their own. That climb could take 10 or 15 years, and the whole enterprise stayed family-owned or privately held throughout. The upside of that kind of long-termism is that if you survive it, the company remains yours, your customer relationships are genuinely long-term, and no outside investors are second-guessing your every move.

But if you try running a startup that way today, odds are you'll just quietly vanish from the market. Without the ability to scale up quickly, you can't attract talent, and you'll likely miss out on every cutting-edge technology out there — nobody's expertise covers everything. Yet you have to raise money before you're even profitable, and that's genuinely stressful for a chairman. All the pressure flows from one question: why would an investor buy your stock instead of TSMC's? There has to be some story of growth compelling enough to persuade them — which means shipping better, newer features to sell more product.

As for the pressure facing this company's CTO — and every tech company's CTO, really — it comes down to a basic engineering truth: good work takes time, and rushed work is shoddy work. But once hardware has already shipped, the software behind it, rushed out the door to hit a deadline, often isn't good enough, and that piles up as so-called technical debt to be repaid later. Meanwhile the chairman is under pressure to hit the board's targets, which means better, newer features — from the chairman's and CEO's vantage point, fixing existing problems is naturally secondary to shipping the better, newer features that will sell more units. That's exactly where the conflict between production and operations comes to a head.

Another difference — one that favors software companies and makes life harder for hardware companies — is that a software company can push a major update remotely. The most famous example is Twitter (X). Back in the day, Twitter broke down constantly for years on end, and users would just get used to seeing that famous "fail whale" with the bird. But users had no real recourse — the company practically stopped just short of officially announcing, "if you don't like it, don't use it."

But a hardware company can't get away with that. The chips and circuits are already built into the device — how do you change them? So relying entirely on firmware updates after a product has shipped probably can't fix everything. A baby monitor that can't get online is just a piece of scrap metal, and when something breaks, customers return it. On top of that, hardware startups actually carry inventory — pure software companies don't — which adds a whole extra layer of inventory and channel management to operations. That's its own body of specialized expertise, and its own cost line item, which is why no matter how much money you raise, it never quite feels like enough.

There's another difference too: software is relatively hard to sell, while hardware is relatively easy to sell. Buying a machine and using it at home is a clear, well-understood behavior, but software isn't something the average person naturally pays for in the same way. So while software startups skip the inventory headache, they run into extra sales difficulty on the operations side instead. Put simply: whether you're running a software startup or a hardware one, it's tough going either way.

Necessary Adjustment》

Software and Hardware Startups Alike Must Learn to Live with the Pressure

With so many pain points at play, if you trace them all back to the root, there's really just one source of pressure: technology is now updating so fast that startups are under enormous strain. I think most products go through a maturation cycle, and being rough around the edges at the start is inevitable — the only real answer is to map out a plan and improve step by step. Panicking won't solve anything.

So it's essential to find healthy ways to manage your own stress. Most of the software-startup founders I know love traveling or gaming; I personally buy a lot of books to read, and when I'm reading, I really do feel the pressure drop away.

In the end, the key to running a startup is accepting from the outset that pressure is simply part of the deal. The valuation and market-cap logic behind software and hardware ventures is, for the most part, more favorable than opening a bubble tea shop or restaurant on your own street corner. And if you get to enjoy that better valuation, learning to live with the pressure that comes with it is simply unavoidable.