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The Slow Death of a Startup Darling

Boom With A View by Erin Griffith: Social MediaBoom With A View by Erin Griffith: Social Media
Some startup "unicorns" are magical, and others are donkeys in party hats. Illustration by Aleksandar Savic

This essay originally appeared in Data Sheet, Fortune’s daily tech newsletter. Sign up here.

There are two reasons startups fail, according to Y Combinator founder Paul Graham. They run out of money, or the founders give up.

We know when the former happens because it’s usually sudden. The surprising demise of cleaning service startup Homejoy sent shock waves through the “on-demand” category of startups. Likewise for virtual assistant startup Zirtual, which ran out of money and shut down over a weekend.

But such overnight failures are rare. Instead, startups often die painful, drawn-out deaths, because Paul Graham’s second reason for failure—giving up—goes against the nature of most entrepreneurs. It takes a lot of grit and determination to start a company. Even the basics—raising capital, building a team, launching a product, and signing customers—require overcoming monumental odds. The “hero’s journey” mythology of famous, successful founders always describes the way they ignored everyone who said their idea would never work.

That explains why so many startup founders hang on to their dreams long after everyone else knows they’re doomed.

Exhibit A is Jawbone. The company has achieved many impressive feats in its 17 years of existence. It has raised hundreds of millions of dollars in funding, something very few companies do, and it created and launched a number of successful consumer products, including the Jambox wireless speaker, its namesake wireless Bluetooth headsets, and the Up fitness band. But in recent years the “can’t-miss” company has struggled with product delays; executive reshufflings; increased competition from Apple (AAPL) and Fitbit (FIT); costly lawsuits with its supplier, Flex (FLEX), and Fitbit; and a “down round” of funding that cut the company’s valuation in half. From the outside, it all adds up to an ugly picture.

Plenty of people close to founder and CEO Hosain Rahman have probably advised him to give up and make a graceful exit. Instead, his company continues to fight for its life. Over the weekend, Fortune’s Leena Rao reported that Jawbone is attempting to sell its wireless speaker business to focus on its fitness tracker business. At the same time, Business Insider reported that the company is apparently liquidating its inventory of Up fitness bands.

It’s yet another ominous sign for Jawbone’s survival. But it’s the sort of thing that shows Rahman’s determination: If Jawbone fails, it won’t be because he gave up.