Last week the one and only Dr. Tony Bridger, one of the world’s leading spend gurus, said that the correct term for “walking dead companies” is Zombie companies, and I had to correct him.

Historically, a person was walking dead when they had received a mortal wound, infection, poison, or radiation dose and it was just a matter of time before they died. But they weren’t dead yet, and there was always a chance (albeit not a good one) they could survive if they got medical treatment fast enough to stem the bleeding and repair enough of the damage, fight the infection with a miracle drug, get injected with the anti-venom, or get quickly decontaminated and receive enough red blood cell transfusions to have a fighting chance (although, admittedly, not a very good one).

Similarly, a walking dead company is a company that is on the path to insolvency (or acquisition on someone else’s terms if it’s lucky) because of the situation it is in, which is usually because of critical mistakes that were made in the past and still being made today. If such a company suddenly stopped making all identifiable mistakes, found a way to stem the bleeding (of cash), and mitigate some of those past mistakes, there’s still a chance it could survive. It might not be the company it wanted to be, but if it made it to break even, maybe it could find a new direction and a new chance to be great down the road.

In comparison, a zombie company is one that is already dead, and has been dead for years, but refuses to die, usually because of the stubbornness of one or two founders/leaders who believe if they make it just one more year, even though they refuse to do anything different from what they have been doing for years, the company will magically take off. They maintain a heretical, fervent belief that it just needs “more time”, just like the Gen-AI zealots believe it just needs “more cores”, and the American voters think they have a real choice (when, in a two party system, they don’t … or at least won’t until the Super PACs, which give money to both parties to ensure that whomever wins will support their core agenda, are made illegal and eliminated).

You can tell these companies because, in our space,

• they have been around more than five years, and usually more than seven (before COVID and since the second last M&A frenzy in the late teens when money flowed freely)
• they have less than 10 (FT) employees if they are primarily a point/module-based solution, and less than 20 (FT) employees
• their customer count hasn’t increased significantly (i.e. has not increased by more than 10% to 20%) in at least 3 years, i.e. if they’ve managed to sign new customers, they’ve usually lost almost as many
• they don’t do any marketing whatsoever beyond email campaigns and more often than not the copyright on their website is a year (or more) out of date
• none of the major analyst firms or analysts have given them much attention in years

And, as any consultant, analyst, or partner who they attempted to engage or who tried to help them can tell you, the situation the company is in is unrecoverable or a non-starter.

(So while the doctor will be giving you

• a two-part series on what you can do to avoid the graveyard if you admit to some of the dumb company mistakes and
• an eight-part series on what you can do to avoid the graveyard if you are willing to admit you are making some of the dead company walking mistakes

he will not be doing any follow ups to this article.)

Why are they zombie companies? There are a lot of reasons the doctor can point to, and he’ll include a few examples in this article, but it all boils down to this:

1. most of these companies are owned by one to three founders/partners who control the company and
2. the refuse to admit that they need help, or if they admit they need help, they refuse to either do what is necessary, and often won’t even admit they need to do something different to get help

And since I know THE REVELATOR loves details, some examples include, but are definitely not limited to:

• their messaging will be awful and their marketing strategy non-existent, and even if multiple people outright tell them that, including analysts and (potential) partners who want to help them, the founder/partner will either insist it’s just fine or that they need to keep it in house
• they couldn’t sell a space heater to a freezing American stuck in Alaska, but won’t hire a full time sales person on salary because “a great salesperson should work only on commission and want to sell our product because it’s so great”, even though a sales person would need to sell a deal a month to make a decent salary on the commission on a 50K modular sale, and since it takes about a year to build a solid pipeline, that sales person is apparently supposed to starve for the first year (with zero stake in the company) … because of future potential
• they admit they need help tweaking the product to be more appealing to a wider audience, but won’t pay for consulting because the budget is too tight — unless the consultant works on “referrals” … but that’s presales, not product, and not what the consultant they need is going to be any good at, so they don’t get any help … ever!
• etc.

the doctor could go on, but he won’t, because there’s no point. At the end of the day, these zombie companies desperately need help, and even if they admit it in some capacity, they won’t get it because they don’t want “IP” to leave their “4 walls” (even though they have very little they need to protect as the core of most solutions that implement a core function is about 80% the same), or, usually don’t want to pay for it (because that would either require investment, a loan, and/or ownership dilution … and sales, which they are not getting and haven’t gotten in years, should pay for everything).

The founders/partners are the problem, they can’t be removed, and they’ll stubbornly keep sailing on the edge of the massive whirlpool that’s sure to swallow their ship to the bottom of the sea until they lose that one key customer (that accounts for a significant part of their revenues or referrals to replace the customers they keep losing) or one of the partners becomes unable to continue, at which time the helm will be unmanned and the whirlpool will win. It’s unfortunate for all involved, and it is even more unfortunate that, since they are private, you can’t do hostile takeovers of the ones with good tech that will soon be lost to time.

So that’s it. Zombie companies exist and they can’t be helped and you want to steer further from them then dead companies walking. At least in the case of a dead company walking, if that company admits it and charts a turn around course, it could end up being an okay bet, especially if they can reach profitability or are likely to get acquired intact by a new investor. But the only future for a zombie company, unable to acquire the brains it needs to survive, is to eventually shrivel up and fall apart and return to the dirt from which it came.