No need to add identifiable details, but what sorts of things were part of "we hit a snag and things started going south."
I can imagine someone checking out in the ways you describe, but only in the face of mind-melting obstacles, the kind that cause people to lose all hope and throw in the towel once spotted.
A lot of it was just execution problems. But I think it summarizes into a perfect storm of moving the development team to a new product and putting the existing money maker on bug fix only, two rounds of dedicated sales staff that woefully underperformed (sometimes comically so looking back), and the landscape of paying customers going into insecure funding situations of their own.
On those points:
1- Moving the staff to another project was a tough call, but one I think I would have made in the CEO's position, it just was a gamble that didn't work out as well as we were hoping as it took new product iterations off the shelf for too long. But while the old product was keeping the lights on, its growth curve wasn't going to get us to where we needed to be.
2- I'm actually interested in HN's ideas on hiring good sales/marketing staff and how they should best be managed. Across half a dozen companies now I've failed to really find good competent sales people and any effective way of managing them without getting in their way. It's just a very hard position to hire for -- hiring engineering is a piece of cake in comparison. I think if I were CEO of a small startup, sales people would be hired on 90 day probationary periods. But I've heard counter arguments that sales folks in my vertical really require 6-9 months to build out their sales pipeline and start seeing results. However, some of the issues were stupid, like not answering phone calls or failing to handle simple contract negotiations without blowing the deal, or not wanting to manage contract staff to execute on part of the sale and simply moving on to other opportunities.
3- The customer situation was a surmountable obstacle I think by expanding the size of the sales net we were throwing out there. There were several related markets with better funding sources we could have gotten into that we didn't take seriously until it was too late. We also had some immediately good opportunities that got bungled because of #2 above and because the margins weren't as good as other opportunities that we chased instead and failed capitalize on anyways.
I can imagine someone checking out in the ways you describe, but only in the face of mind-melting obstacles, the kind that cause people to lose all hope and throw in the towel once spotted.