Startups were set to face a great reckoning in 2016. Yet the crash hasn't happened, and many startups have adjusted by containing costs and narrowing their focus.
Sean Behr, the chief executive of the parking service Zirx, epitomizes the change. The company, named after the Ukrainian word for star, was in the “on-demand” space, providing valet parking with the touch of a smartphone button... But each customer was so expensive to acquire and serve that Zirx lost money and consumers in all six cities where it operated. By late last year, Zirx, a San Francisco start-up that had raised $36 million, had only about a year’s worth of cash left. So in January, Mr. Behr... told customers Zirx was shutting down its on-demand businesses where valets would park cars for any customer who asked and would instead focus on more lucrative corporate clients.