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Between the first investment and product-market fit lies the most dangerous stretch of a startup’s journey, often called the Death Valley.
It’s the phase where optimism meets operating reality: revenue is thin, funding is running out, and everything depends on how well founders can identify and manage risk faster than it grows.
Most founders only perform a post-mortem once things have already gone wrong. But what if you could do it before it happens?
That’s the idea behind a Pre-Mortem, a proactive exercise that helps you imagine how your startup could fail, so you can address those risks before they become real.
A pre-mortem isn’t about pessimism, it’s about clarity. By exploring how your company might fail, you can design countermeasures and build a roadmap for resilience.
Think of it as early-stage risk management for people, not just spreadsheets.
Here’s how to run one effectively:
1. Assemble your core team → Include co-founders, advisors, and one external voice (mentor, investor, or peer).
2. Imagine your startup failed 12 months from now → Be specific: “We ran out of cash,” “Our market shifted,” “We lost our technical lead.”
3. List every possible cause → No filter, aim for 15–20 reasons. Strategic, operational, even personal.
4. Rank by probability and impact → Which ones are both likely and severe?
5. Design countermeasures → For each top risk, define one concrete step. For example:
• Risk: Customer acquisition cost too high. → Countermeasure: Test three new channels before the next funding round.
• Risk: Dependence on one founder. → Countermeasure: Document key processes and cross-train early.
6. Revisit quarterly → Your risk profile changes as your company grows, make it part of your operating rhythm.
After working with hundreds of founders, six recurring risk areas appear again and again:
Mapping these six dimensions helps you turn risk into a dashboard, not a guessing game.
Managing risk isn’t about avoiding it, it’s about understanding it. Warren Buffett didn’t become the world’s most successful investor by playing it safe; he mastered the art of pricing and managing risk better than anyone else.
Startups can do the same.
With the right data, consistent review habits, and a willingness to look ahead, founders can make risk a measurable variable, not a mystery.
Every founder faces a moment when the numbers look thin, morale dips, and uncertainty peaks. That’s your Death Valley.
The startups that survive aren’t necessarily the luckiest, they’re the ones that saw the dangers coming and prepared accordingly.
So before you cross that valley, take an hour this week to run your Pre-Mortem.
Future-you (and your investors) will thank you.
With the code LAZOSTARTUPS, you get 3 months to try the platform for free
Author: Juan Damia - CEO and Founder Rocketbeet.com
Juan, Endeavor Entrepreneur since 2010 and Emerging Entrepreneur of the Year, founded Intellignos, where he led data consulting and algorithm development.He’s also author of Meta Analytics and host of the Born2Unicorn podcast, with over 200,000 views.
