From an outsider's perspective, especially as a customer or prospect, what's the biggest red flag that a startup is in trouble/about to fail?

Market differentiation and customer experience. If you don’t make things easy for a customer, and you can’t easily distinguish your USP, then you’re likely being mismanaged to failure.

Look at the thousands of generative AI startups which have been appearing recently. There’s a massive overlap with similar technology, however a lot of these companies are offering 12-month subscriptions to be paid upfront.

Are they going to deliver innovation and a positive customer experience, or are they just looking to generate revenue and walk away?

Skipping the customer's interviews and not testing the product market fit. You are at risk of building something nobody wants. 

From a customer's perspective: lack of responsiveness and poor customer service. 
Also, no interest in customer feedback to improve the product/service. 

No or little sales. You have to sell something and generate some revenue to support what you are trying to accomplish.

In the end one needs a saleable product, initially this usually is just the vision for the product. If there are no early adopters/early customers or those are backing out quickly, that is a red flag.

I was lucky to be part of a few successful startups and they all had in common:  a) The product would be something useful and ultimately became great b) The team was talented and had fun, was motivated c) The leadership was talented and had excellent contacts (to get early adopter buyers). d) Even the early adopter customers were happy and highly supportive, championing and advocating.