What do you do when your “baby,” the business idea that you know is brilliant, that you are convinced has the potential to become a money-making enterprise, hits a wall and fails to thrive? You’ve invested so much faith and focus, energy and expertise, countless hours and all your savings into incubating what looked like a very promising business concept.
You wrote the pitch deck in your head, brainstormed your ideal recruits for the management team and fantasized about hosting the launch party but now doubt is creeping in. The baby appears to need life-support. The song says, “You’ve got to know when to hold and know when to fold,” but how do you know? Weighing when to give up and when to continue past current hurdles is a decision that all startup founders face at some point in their journey.
Some setbacks are fixable, but others may be beyond your control. Business experts have identified key indicators to help you assess your circumstances:
- Has it become apparent that there is insufficient customer demand for your product or service?
- Are competitors preventing your product or service from gaining traction?
- Are you running out of money to finance the venture?
- Is there conflict within the management team that is causing serious disagreements?
- Do you feel like you’re in over your head?
- Have you lost your passion for launching the company?
What do experts say about when to give up?
Startup advisors at MassChallenge, the Boston-based not-for-profit global business accelerator, recommend that entrepreneurs in their program begin the business development process by focusing on the problem that their customers want to solve, or benefit they want to obtain, rather than starting with the product or service the company expects to offer. Once research has confirmed the size of the market and revealed a demographic picture of target customers, potential solutions are beta tested and the best option is brought to market.
Senior Marketing Director Hannah Perry said this approach has contributed to an enviable success rate for MassChallenge supported ventures. The first group of startups came on board in 2010 and 80 percent of the 1,500 early stage ventures that have been selected to participate remain active. As of 2017, the companies have generated $2 billion in revenues. In the 2018 group, 51 percent of startups have a woman founder.
Many times, success or failure is determined by how long one stays in the game. Other times there is no viable recipe for success and the best action is to fold your tent. MassChallenge advisors recommend that participants learn how to “fail fast,” because experience is the best teacher and lessons learned can be applied to your startup 2.0.
It’s said that winners never quit and quitters never win, but I suggest that you flip the script on that piece of conventional wisdom. When you read the biographies of extraordinarily successful entrepreneurs such as Caterina Fake, you’ll learn that she and her cofounder abandoned a game they were trying to develop, but its photo-sharing component was used to invent Flickr. Cisco Systems cofounder Sandra Lerner was ousted from her company in 1990 but in 1996, she cofounded the cosmetics game-changer Urban Decay.
Winners quit all the time. They quit what they should quit. When it’s time to quit.
Thanks for reading,
Kim
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