I begin by posing the simple question to Jeff: Why do initially “successful” businesses go sour? Jeff talks about how optimistic we can be as entrepreneurs, and how sometimes this is trouble in terms of staying in touch with reality.

Sometimes business startups ramp up fixed expenses based on a quick “vertical” growth phase after they launch. Then, as growth slows, the fixed expenses the business owners had put in place to keep up with “expected” demand end up shackling them into financial distress.