Most Startups Fail. These Founders Thought Making an Impact Was Worth the Risk.

When Dianna Liu ’18 left her engineering job at ExxonMobil to start her company ARIX Technologies, she knew the move would be “either the stupidest or the smartest decision of my life.”

Liu had occupied a variety of roles at the company since joining just out of college, but she couldn’t put aside her idea for addressing pipe corrosion, a major problem in the oil and gas industry. When the pipes that carry petroleum products break down, the risks are significant. A leak can lead to environmental degradation, human health impacts, fires, and even explosions. At the same time, pipe inspection is a difficult and dangerous task: in refineries, for example, workers manually inspect pipes while hanging at great heights from expensive temporary scaffolds built solely for that purpose.

“It was a problem that was not just an Exxon problem, but prevalent in the industry, and we were all hoping that someone else would make a solution for us,” Liu recalls.

To Liu, the answer seemed obvious: automate the inspection process by creating a device that could detect early signs of corrosion. “This is just a robot that could be built,” she remembers thinking, as she started to realize that she could be the “someone” her field needed. “Why isn’t anyone doing it?”

Over the years she spent building that robot and bringing it to market, Liu discovered some of the reasons why no one else was doing it.

In an era that has seen scrappy enterprises grow into powerful companies that shape how we live and work, the word “startup” has become synonymous with glamour, innovation, and pluck. Yet launching a venture, especially an impact-oriented one, is no certain path. Most startups fail, and those that succeed require high-risk investments at the beginning and take years to become profitable. For Liu and other Yale SOM alumni who founded startups as students, the hunger to address an unmet need—and a driving sense of “why not me?”—were essential in bringing their ideas from aspiration to marketable product.

“My most genuine desire is to solve problems,” says Ariana Day Yuen ’19, founder and CEO of the regenerative ingredient-sourcing company Forested. “I’m trying to solve the problem of deforestation and nature degradation in a way that makes sense for global markets and indigenous land stewards alike.”

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Nick Callegari ’25 spent most of his life building up to his own “why not me” moment. His father has worked in construction for 35 years, and many of his aunts and uncles are in related trades such as plumbing, roofing, electricity, or landscaping. He observed that their methods and materials changed little over the course of his lifetime. Even as technologies like 3D printing revolutionized manufacturing, he says, they struggled to take hold in the construction industry: most existing printers that can be used for building cost millions of dollars and are likely to produce aesthetically unappealing results.

In 2024, Callegari founded his company Verustruct, which is developing a 3D printer that can produce walls with embedded mechanical, electrical, and plumbing systems. Dispensing with the cumbersome gantry framing structure that limits the size of many construction projects, Verustruct’s printer extrudes layers of wall that support the machine as it works, allowing for larger-scale projects at lower costs. The goal is to make the construction of new housing cheaper and more sustainable—urgent needs in a country where nearly half of renters and a quarter of homeowners spend more than 30% of their incomes on housing.

Before Callegari could build momentum around Verustruct, which recently raised over $2 million in a pre-seed funding round, he had to learn from a few mistakes. For his undergraduate thesis project at Princeton, he conceived of his first venture, a technology aimed at making mass transit more energy efficient. He continued to refine the idea as a master’s of engineering student at the University of California, Berkeley, but could not get it off the ground. “It ended up not working out because the unit economics didn’t make any sense,” he says.

An important lesson from that fledgling company was the need to develop himself as a founder. “I got feedback that investors wanted to see more industry experience for them to feel comfortable with me leading a hardware-based deep tech startup,” Callegari says. With that advice in mind, he spent the next two years at SpaceX, working on the tools and systems used in the first commercial spacewalk.

By the end of that project, Callegari was itching to get back to his passions: “helping people and making a difference.” He came to SOM fully focused on making the leap into entrepreneurship.

Participating in the Tsai Center for Innovative Thinking at Yale’s Climate Innovation Intensive got him thinking about novel construction methods and planted the first seeds of what would become Verustruct. He also took advantage of the broader Yale University ecosystem, participating in the Yale Urban Design Workshop’s Housing Connecticut Clinic, which offered exposure to “not only the financial side, but also the architecture side and the legal side of big development projects.” Those experiences taught him that focusing on wall construction would be technically feasible and economically viable, and he founded Verustruct in April 2024.

In the few months since graduating from SOM, Callegari has focused on pursuing research and development and securing pre-seed investment. As complicated as the technical aspect of his venture is, finding investors for a hardware-focused company might be even harder: by contrast to more ubiquitous software-focused startups, hardware companies need access to space and specialized equipment. When Verustruct was in its earliest stages, Callegari solved that problem by pleading his case to ClimateHaven, a New Haven incubator space: “I said, ‘Look, if you give me the summer to work on this in this space, I’ll show you guys what I’m capable of.’” He was there every day, all summer long, and ended up winning what he calls a “golden ticket”—a year of free space and support from ClimateHaven.

The search for investors only became more complicated outside SOM. Many investors passed on Verustruct because of the necessity for large upfront expenditures and the not-insignificant potential for failure. “It’s very much an extra challenge,” Callegari says. At first, he talked to all kinds of potential investors, but he gradually realized it was more effective to narrow his focus. “You have to find investors that understand hardware. That took me a little bit to figure out and learn.”

Still, Callegari’s persistence is paying off. Verustruct has produced full-scale prototypes and will conduct its first wall layer print tests in December. Callegari hopes to be able to print entire homes within five years. The longer he works on the company, the more potential Callegari sees for Verustruct’s technology. “When you see a Verustructure,” he says, “you’ll know it’s high quality and it’s something safe, sustainable, and people feel dignified living within.”

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Yuen’s company, Forested, was born out of what she thought would be a five-month volunteer consulting position focused on building agriculture supply chains in rural Ethiopia. That volunteer role expanded into a nearly three-year stint that ended when she enrolled at SOM. Her projects involved connecting small farmers to large corporations like Nespresso, as well as promoting regenerative farming and forest conservation. Gradually, Yuen began to see how those two goals—helping small farmers and protecting ecosystems—could come together in one venture. If she could make forest-based ingredients profitable for farmers, she could incentivize preservation and deter logging.

Her company started out as a direct-to-consumer brand selling Ethiopian honey. In many ways, the model worked well. Forested got press attention for partnering with celebrity chefs and Michelin-star restaurants, and “the gross margins were fine,” Yuen says. But she knew she wasn’t fulfilling her deepest aspirations. “If we’re trying to conserve half a billion hectares of land by 2050, moving small jars of honey and working with a few dozen farmers—that’s never going to change the world.”

Guarding against complacency was something she learned at SOM. “One kind of overarching lesson I learned from all of my classes, especially looking at different case studies, is that you need to keep innovating,” she says. Learning about challenges faced by companies big and small helped her see that “the only constant we have is change.”

To scale Forested’s impact, Yuen realized she would need an entirely different business model. Instead of working only with honey, she wanted to branch out to a range of forest-based ingredients, such as carrier and essential oils, spices, and shea butter. The company could train farmers in sustainable practices such as intercropping, promoting organic soil inputs, upcycling agri-byproducts for biochar production and utilization, and practicing reforestation. These techniques would allow farms to actually reduce carbon dioxide in the atmosphere, so “we’re able to calculate and attribute carbon reduction units with the product,” Yuen explains.

Other businesses and retailers could then buy these ingredients from Forested as part of their carbon-insetting initiatives—efforts that companies make to reduce greenhouse gas emissions within their own supply chains. Doing so would allow them “to reach their net-zero goals through something they need to do anyway, which is source raw materials.”

Not everyone believed the transition away from a direct-to-consumer model was a wise idea. “I spoke to investors who were like, ‘We understand the Ethiopian honey manufacturing and trading business,’” Yuen says. By contrast, her vision—to sell ingredients and verify their carbon insetting value within a single company—was new, so investors had a hard time believing she would find a market. Rather than pivoting, these investors encouraged her to “focus, focus, focus” on her original concept.

“I think that’s always a tension point between entrepreneurs and investors,” Yuen says. “Investors advise you to focus. But given how dynamic and changing our world is, the reason why any of us are here today is through a Plan C or D we made years ago.” Ultimately, Yuen stuck to her guns: “I didn’t listen, and they didn’t invest.”

Instead, after a friends-and-family investment round, Forested was able to open a factory and become a wholesale business. Yuen also shifted away from selling to food companies and began serving mostly beauty companies, such as Lush Cosmetics. Thanks to that shift, the company was able to expand exponentially, working with over 1,000 farmers instead of 100. “We were protecting a couple hundred hectares of land then, and we’re now working with farmers who are protecting over 50,000 hectares of land,” Yuen says. “That scale was really what we were going for.”

Her choice came with certain downsides. “We’ve had to be so disciplined about how we use cash,” she says, from purchasing refurbished electronics to keeping her team lean. But remaining largely self-funded allowed Yuen to follow her own intuition about where the company should go.

“As a founder, you are the one who has the vision,” she says. “If you have investors or a lot of board members, it’s imperative you’re anchored in your conviction. Otherwise, it’s a painful, uphill battle convincing a whole coalition that you need to change gears. We’ve had the luxury of not having that battle, especially in the earliest, most formative stages of the business.”

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Like Yuen and Callegari, Liu came to SOM with robust technical skills and experience. By the time she began her MBA, she had already sketched out the design for a pipe-crawling robot. But she knew the idea was not enough. She also needed to learn about running a business: how to secure investors, recruit employees, and even incorporate a company.

She found help in SOM entrepreneurship classes taught by Kyle Jensen, Jennifer McFadden, and A.J. Wasserstein. Even outside of the lecture hall, all three were happy to work with her one-on-one and talk through “all those little things you face and it’s not worth interrupting a class to ask,” Liu says. Her classmates proved to be a valuable resource too, offering insights drawn from their own backgrounds and careers. In fact, one of Liu’s learning team members later became an ARIX investor.

After graduating, Liu set to work making her vision for the company a reality. It didn’t take much money or time to develop a working prototype: “Luckily,” she says, “mechanical engineers just like tinkering with things.” She also received encouraging early signs, like an out-of-the-blue email from the venture division of Stanley Black & Decker on behalf of their oil and gas company; within a month of contacting her, the company decided to invest in ARIX. Today, the highly evolved successor to that first model can crawl along lengths of pipe detecting weak spots beneath layers of insulation, while ARIX’s custom-built software produces detailed pipe health reports for customers.

Running the company, though, proved to be a far more daunting challenge. Several years into running ARIX, Liu came to an important realization: “I really don’t thrive in leading teams. I like building the systems and coming up with the ideas and talking to the customers and all of that, but once the company reaches a certain stage,” she says with a laugh, “managerial difficulties can become all-consuming.”

In January, ARIX hired a new CEO, and Liu took the role of president—a change she had wanted to make for years. “Often, I’ve heard, founders have the opposite problem,” she says, noting that many boards find themselves nudging a stubborn executive to step aside. “Realizing it’s OK to tell my board, ‘Let’s hire a CEO who can take it to the next level’—I wish I’d done that several years ago.”

Still, she’s proud that she was able to help ARIX reach its current level of success. At times, she’s had to ignore outside voices, which are often well-intentioned but may not be best-positioned to help. “Trust your gut,” she says, is advice she often gives to other founders: “I think a lot of entrepreneurs become entrepreneurs because they see a problem that no one else has seen, so stay true to that.”

From securing funding, to finding the right business model, to the day-to-day work of leading a company, the challenges of founding a startup are manifold. “I do really think that half of entrepreneurship is trying to figure out how to stay alive at all costs,” Yuen says. “There are a lot of externalities that are out of your control—for example, the fundraising market has been terrible for the last three years. That’s out of your control.”

But all three founders believe there are good reasons to stay in the fight. No matter what the future holds for Verustruct, Callegari feels sure he has found his path. “I do think there’s a certain type of person that thrives in the startup environment,” he says—someone who can balance competing demands, build the right team, and work flexibly and collaboratively. “If this doesn’t end up working out,” he says, “I’ll work on something where I can continue sharpening those skills and making an impact.”

Yuen relies on her vision—“abundant diverse ecosystems [that] make nature a lucrative investment for everyone,” she says. “I don’t think I’ll stop until I feel like we’ve really cracked it.”

Liu tries to keep the stresses of entrepreneurship in perspective. She knows that stress is an inevitable component of any workplace, and she’d rather experience it while working toward a goal that genuinely inspires her. Plus, the tinkerer in her believes there could be new ventures in her future.

“I have a ton of other things I want to make,” she says.

Nick Callegari is a recipient of the Selby Family Entrepreneurship Innovation Award at Yale SOM (summer 2024) and the Boms, Tal, Vlock Entrepreneurial Award (summer 2025). Ariana Day Yuen is a recipient of the Henry F. McCance Entrepreneurial Award at Yale SOM (summers 2018 and 2019). Dianna Liu is a recipient of the Henry F. McCance Entrepreneurial Award at Yale SOM (summers 2017 and 2018).