Halloween is here and the zombies are afoot! In fact, zombie companies are more common than you would ever imagine. Contrary to what you may believe, zombie companies aren’t just dead, non-producing leeches that suck the life out of their investors. They are very often simply challenged companies with a lot of potential. In fact, zombie companies usually have a compelling product and qualified team members.
So what makes them zombies? Zombie companies simply cannot grow without outside investment. They are probably missing some essential talent and are unable to hire without investment. It is very typical in this situation that the investor makes the decision not to supply additional funding, thus pulling the plug on the company. While technically still “living” while they are able to function, they are unable to grow – in the business world, this is the equivalent of the living dead
What are symptoms of a zombie company?Compelling product: Most of the time, zombie companies have a compelling product. It is what is keeping them alive! If not, they would most likely be a dead company.
Effective management team members: If the product is compelling, the team has to be somewhat effective. However, chances are the team is lacking in some way. Otherwise, they would have never become a zombie company in the first place.
Lack of momentum: If a company is lacking in momentum, chances are they are a zombie. Any signs of stagnation and you should consult with a zombie whisperer to prevent a disaster.
So now you know what a zombie company looks like, but what can be done to save these zombie companies? (Hint: it takes a little more than an injection of capital.) In our next blog, we will talk about the approaches we have taken to bring the dead back to life.
-Steve Hogan, Managing Partner, Tech-Rx