For Starters #14: When Do We Stop?
Wherein a startup founder asks me, “how do I know if I should I throw in the towel?”
That’s me finishing the Twin Cities marathon in 2021. No, it wasn’t pretty. Not just at the finish. It started to get ugly at mile 7. Yes, twenty miles of disappointing running punctuated by bouts of frustrated walking.
The thing is, I didn’t need to do it.
I wasn’t going to win prize money. My livelihood wasn’t on the line. I could have simply walked off the course. People around me did (admittedly, until I saw them walk off, I didn’t even realize it was an option).
The same is true of going from zero to one with a new venture. We can stop at any time. It’s all optional. A single-person LLC or S-Corp can be readily dissolved and re-formed anew, which is as liberating as it is disappointing. Sure, wherever you stop, some clean-up and unwinding is still needed, less clean up earlier, more clean up later.
Last week, when a startup founder asked me how I determine it’s time to stop, I took a breath. If stopping is under consideration, it means a lot of things haven’t turned out as expected. It also likely means a time-bound minimum measure of success wasn’t declared from the start.
Few first-time or second-time founders (I didn’t do that with my first handful of ventures) are able to distance themselves from their obsession and enthusiasm long enough to declare these pragmatic minimum goals, though it’s a highly valuable exercise to focus development efforts while also creating a just enough accountability. Admittedly, I didn’t do that with my first handful of ventures.
But, what if we didn’t do that.
What’s the phrase:
“The best time to plant a tree was twenty years ago, the second best time is right now.”
There’s no time to start like the present.
This is where it gets less clear. We need to factor in your current appetite, current runway, and current customer pipeline. If all of those are strong - we’re probably not having this conversation. If they’re all low (or even just appetite), it’s probably time to stop. If pipeline is low - declare an experiment like we just talked about, e.g:
“For the next 6 weeks, I will pursue new customers commitments. If I’m unable to get 10 commitments by Feb 28, I will reassess this effort.”
Of course, you can pick whatever duration and volume you’d like - I call out six weeks and 10 customer commitments as hard minimums, and keep yourself accountable.
Six weeks is enough time to keep focus, to try a couple approaches, and to get early traction or not, after which you’re going to need a break anyway (37Signals structures all their work in six-week cycles - https://basecamp.com/shapeup/0.3-chapter-01#six-week-cycles). Ten customer commitments is the minimum for a product offering, any fewer and the business is more of a professional services or consulting firm - which is to say, yes, a minimum customer count for a professional services firm can be as low as 5 or 3. In either case, you’ll likely need to have a prospect list of at least 20-30 to land at 5-10, so the first exercise is to compile a sufficiently long prospect list (which again, few first-time founders do at the beginning).
In my marathon, when I realized at mile 7 it wasn’t going well, I stopped thinking about the 20 miles ahead of me and focused just on the next mile marker, the next water stop, the next block, and reassess.
It could be that you need to pivot your business - also a great time to declare a minimum level of success within a specific timeframe. There’s two ways I think about pivoting:
Different value proposition to the same customer segment
Same value proposition to a different customer segment
(a different value prop and a different customer segment is starting over - not a pivot)
These kinds of inflection points are great opportunities to increase your deliberateness, discipline, and ensure your identity isn’t enmeshed with this struggling venture.
As we discussed in For Starters #1 - The End is Inevitable everything has a natural lifespan. There’s no shame in stopping, in stepping away, especially if it helps you get to a better thing faster.
If you’d like some help determining what the next move is for your nascent business - just reply to this email and we’ll get a time on the calendar.