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Why 74% of High-Growth Startups Fail: ‘Hiring Fast without Structure’

Business Productivity 1,280
Why 74% of High-Growth Startups Fail: ‘Hiring Fast without Structure’
Article by Kia JohnsonKia Johnson
5 min read
Published: May 16, 2025

Innovation & Hiring Key Findings

  • 74% percent of high-growth startups fail by scaling too soon. Overhiring and weak operational systems are the top causes.
  • Growth experts, Julia Arpag and Carlo Rivis agree, telling DesignRush that sustainable growth depends on hiring for ROI, building structured teams, and aligning execution with long-term goals.
  • Execution is where most growth strategies fall apart. Vision alone doesn’t scale. Strong systems do.

Seventy-four percent of high-growth startups fail because they scale too soon, according to research from Startup Genome.

The biggest culprits? Hiring too fast, layering on headcount without structure, and chasing growth before the business is ready to carry it.

In Episode No. 89 of the DesignRush Podcast, we speak with Julia Arpag, CEO of Aligned Recruitment, and Carlo Rivis, global innovation strategist at LvlUp Ventures.

They break down the most common breakdowns in the scale-up stage — and what it takes to grow with clarity and control.

Both bring deep, hands-on experience to the table.

Julia built a profitable recruitment firm from the ground up, placing senior talent inside fast-moving SaaS startups. Carlo has spent two decades helping venture-backed teams and Fortune 500s turn ideas into execution and avoid the missteps that stall momentum.

“Hiring fast without thinking about structure or ROI is where most startups go wrong,” Julia says. “It’s not about more people — it’s about the right people, at the right time, for the right reasons."

Whether you're refining your hiring strategy or restructuring for scale, Carlo and Julia share practical frameworks to help you lead with clarity in 2025.

Listen to the full episode now on Spotify, Apple, or YouTube.

Episode Chapter Summary

  • 07:31 - What It Takes to Scale Smart in 2025
  • 17.31 - Why Junior Roles Are Fading Fast
  • 26:01 - Red Flags in Growth & Hiring Strategy
  • 32:01 - Smart Hiring for Evolving Products
  • 43:01 - Signs a Business is Built to Scale

5 Principles for Smarter Scaling

Based on insights from Julia Arpag and Carlo Rivis, these five principles show what separates companies that scale from those that stall.

The Execution Gap

In high-growth environments, companies often chase scale by hiring fast, without first building the systems to deliver at scale. That’s when innovation turns into noise.

Strategy alone isn't enough if leadership lacks the structure to support it.

“You must be able to think in advance and say, what I will become in the next five years is probably not possible to predict right now. So you have to build it step by step, year after year, and be ready to do that,” Carlo says.

It’s not enough to imagine what’s next. Leaders must create the operational discipline to get there, one step at a time.

In 2025, companies that win won’t be the ones with the most visionary pitch decks, they’ll be the ones who can turn uncertainty into structured progress.

Hire for Alignment

Julia doesn’t mince words: companies that hire without aligning on values are setting themselves up for churn.

“You should always be hiring with an eye for ROI. That should be why you make every hiring decision you make.”

In an environment where AI is eliminating routine roles and capital efficiency matters more than ever, hiring must serve long-term outcomes, not short-term headcount optics.

Julia focuses exclusively on senior roles that drive growth — not volume. The logic is simple. Smart hiring is less about resumes and more about strategic fit.

“We only focus on those strategic high-level positions because we know that’s where the growth is and we know that’s where these hires will actually really drive growth for our clients.”

The takeaway for execs?

Stop hiring for capacity. Start hiring for capability — and alignment.

Scale Smarter With AI

AI is no longer just a productivity lever. It’s changing how leaders think about team structure, hiring, and scale. Julia sees it reshaping the early hiring funnel, especially in high-growth tech environments.

“Do we need to hire headcount for this role or can this be done with one of the AI tools on the market?" she says.

Instead of defaulting to more hires, she advises leaders to audit current capabilities and explore whether AI tools can solve business problems before opening roles.

"Instead of just blindly hiring and then again having to lay off months later, let's look at our current team.

Let's look at our current capabilities and let's look at what AI tools we have on the market that could solve these business problems right now so that you can have a more successful hire."

Carlo warns that companies slow to adopt AI aren’t just behind. They’re already losing relevance.

"Who is not innovating and adopting AI today, is already late."

He points to a growing innovation gap, accelerated by the speed of AI, and stresses that hesitation is no longer neutral; it’s a risk.

Carlo emphasizes the organizational complexity required to integrate AI at scale, and the hidden cost of delay.

"Adapting AI takes time for large organizations. The infrastructures, the people, the culture.

So it's not something that can happen overnight. If you didn't start already, you are probably already failing, and you don't know it."

His message to executives is clear: implementation takes time, and the window for proactive leadership is closing.

Resilience Is the Advantage

Julia pulls back the curtain on what it really takes to lead a business through uncertainty:

"Even with those inbound opportunities, even with the reputation that I've built for myself in this industry, it's not easy.

There are always ebbs and flows. The market is always crazy in one way, or form."

She credits mindset, not just operations, as the engine behind long-term endurance.

“My mindset is what really has dictated my ability to continue to persevere and not be in that 80% of founders whose businesses fail within the first year.”

In a landscape full of noise and speed, clarity of purpose becomes a leadership advantage. Grit isn’t a personality trait — it’s a practice.

designrush

Who Are Julia Arpag and Carlo Rivis

Julia Arpag is the founder and CEO of Aligned Recruitment, a values-driven executive search firm specializing in senior talent for high-growth tech companies. With international experience across the U.S., Canada, APAC, LATAM, and the UK, Julia has built a reputation for delivering strategic hires that drive ROI.

Carlo Rivis is the CEO of Innovation Discovery, a global consulting firm that helps organizations identify, validate, and scale breakthrough ideas into market-ready solutions. With over 20 years of experience across startups, venture studios, and Fortune 500 companies, Carlo specializes in bridging the gap between R&D and execution.

Respect Fuels Retention

In a volatile economy, ambition alone won’t drive results. Without operational alignment, even the best ideas stall.

Carlo and Julia deliver a clear message to leadership teams. Growth without systems, values, and strategic clarity is a risk, not an asset.

Start by training the people you already have. Build lean teams. And stop mistaking speed for strategy.

"If you treat people with respect to their roles, they probably will give you back much more to the organization," Carlos says.

The companies that endure in 2025 won’t be the loudest. They will be the most deliberate.

🎧 Listen to the full episode now on Spotify, Apple, or YouTube.

Tags:
aligned recruitment carlo rivis designrush podcast innovation discovery julia arpag 
Kia Johnson
Kia Johnson
DesignRush Podcast Host
Kia Johnson is a DesignRush Podcast host who brings over a decade of expertise in television and radio presenting to the forefront of marketing discussions. Based in Cape Town, South Africa, Kia anchored the popular SABC TV show 50/50 and has served as a Communications Advisor and Multimedia Creative. She has also presented engaging programs at Niche Digital and Audio Productions. At DesignRush, Kia remains dedicated to empowering our B2B audience and fostering meaningful conversations through our weekly podcast show.
Follow on: LinkedIn Send email: kia@designrush.com
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