Yes, startups are definitely like that. I was lucky to not work in those kinds of startups.
What happened all the time is that I would look at competition and be surprised by their success. Their product would be extremely bad compared to ours.
I would be surprised by the amount of missing features (that they still listed in their product sheets). They would close million dollar deals promising features that they barely or never delivered.
But checking out their team, they would all be very experienced salesmen.