Most startups fail. In fact, 90% of new businesses fail. In his Monktoberfest 2013 talk, Zack Urlocker cites research that shows 74% of the startups that fail, fail because they attempt to scale too soon. In other words, these startups believed they were gaining traction and began to invest heavily to capitalize on that traction.
The problem is that the startups that fail are either too soon or were wrong about the traction. Either way, the result is that these startups spent more money than they had, did not earn the revenues necessary to support the spending, and they failed. It turns out, the process of scaling a business takes longer than most people think.