I worked in a place that died this way, and know of another place that also died this way.

The place where I worked: the owner of the company was Bipolar (in the literal sense), and depending on what phase he was, he wanted different features, so every time he "switched", he changed all features, often going back and forth between two feature sets, after a while he got mad the apps were all late and not finished and fired everything and focused on his other business that was more successful.

Place I had a friend that worked there: Experienced (but small) movie studio decided to make games... My friend after a while started to complain of features changing non-stop, I made aquantance to a lot of other employees for various reasons and gathering up all their stories one thing was very clear: the owner new wife often hanged around in the office, and went around demanding new features, whenever employees resisted, she called her husband (the real owner), that then proceeded to agree to whatever she asked... Until they married the project was going well, as soon they married it tanked.