💡 Business Tip - When to Quit (Issue #16)
💡 Business Tip - When to Quit (Issue #16)
How to know when it's time to give up
Shutting down my tech startup was one of the saddest moments of my life. We’d been trying to make it work for years, but the money was running out.
There were signs that it just wasn’t the right idea at the right time (timing does matter). Little did we know, audio experiences would explode in popularity years later (e.g., podcasts, Clubhouse).
We had some signals that it was time to give up:
Building a double-sided marketplace simultaneously is so hard (e.g., creators and listeners).
We weren’t getting traction with growth or engagement.
Too many people were too shy to share their voices.
Our silent partners were losing interest.
Our investors lost interest.
We were burning out.
Finally, my own life goals changed during those years.
I no longer wanted to live in Silicon Valley.
I wanted to spend more time with my family.
I didn't want to be stuck in an office.
I wanted the freedom to work remotely from anywhere.
I didn't want to end up getting stuck in another corporation — even one of my own creation.
I had new goals waiting for me, and new things I wanted to do. But I couldn’t pursue them because my startup was still limping along. It was sad, and the only thing keeping me going was the sunk cost fallacy (e.g., millions of dollars in investment and years of hard work).
How do you know when it’s time to quit working on an idea and move on? It is difficult. Very few business concepts take off immediately, like a rocket ship raining gold down into your bank account. 🚀 💰
Most ideas require some persistence, patience, testing, and tuning. Here are some things to consider.
Time
You shouldn’t give up on an idea you’ve only been testing for a few weeks or months. Even the most successful businesses sometimes took years before showing substantial growth and achieving profitability.
“While that may seem like a lost cause — not to mention the stress of sticking with a company that is losing money — it's not uncommon for a company to wait years before making money. For example, even Tupperware wasn't exactly an overnight success.”
— John Rampton
Resonance
If no one likes your idea, it probably isn’t working. If you keep trying to get people to engage and make a purchase, but it never works, that’s not a good sign.
However, if a few people seem to love your business concept, you’re probably on to something. Now you just need to find more of those kinds of people!
Heart
Is your heart still in it? Do you still love what you're creating and just have to see it through?
Or are you already frustrated and losing love for the project? It’s painful to keep working on something you no longer enjoy.
As you may have heard before, try to find something you love doing even if you're not getting paid. The money becomes a pleasant side effect of your efforts.
For example, writing feels that way to me. I love to write. I write even when no one else reads my words. I write even when I don’t make any money from what I publish.
Sunk Costs
Are you only continuing because you’ve already put so much time, energy, and money into the project? Is that all that keeps you going? The pain of admitting failure and loss?
That’s not a good enough reason to keep running with an idea. Throwing good money after bad isn’t smart. The same goes for your time and energy.
Gut Feel
Finally, our gut is pretty smart. What does it tell you after considering all the above factors?
Does your intuition tell you that you’re onto something and you just need more time? Or does that little voice inside your head tell you it’s over?
Move on to better ideas
Sometimes it’s just timing. Your idea might be fine, but the market isn’t ready for it yet.
Move on and create something that is the right solution for the right people right now. You can put your old idea on a shelf and return to it later when the timing is better. I know that it’s sometimes hard to give up on a dream. So, don’t. Give it time and come back to it later.
When you create multiple revenue streams from multiple business products and services, it’s a little easier to let one go. Keeping placing new bets, exploring, and experimenting with new ideas!
Hi, I’m Larry Cornett, a coach who can work with you 1-on-1 to design, launch, and optimize your business. You might also be interested in my “Employee to Solopreneur” workshop (coming soon). I currently live in Northern California near Lake Tahoe with my wife and a gigantic Great Dane while running my businesses 100% remotely. Hey, look! It’s my old tech startup’s app.
