5 reasons to persevere through start-up obstacles

They said it was going to be hard. But you had no idea it would be this hard. Exhaustion, a poor diet, a parade of ‘no’s and disappointments. Plus mentors and advisers, including me, listing reasons to pack it in. It isn't easy to maintain your enthusiasm and energy in the face of all that.

So when should you not shutter your start-up?

The only thing I hate to see more than good people burning cycles on lost causes is to see good people giving up too early on good ideas when in reality the opportunity was far more promising than they could see from their trendy co-located office loft.

Persevere

So when are the discouraging obstacles not an apocalyptic sign, but simply short-term hurdles, perhaps requiring just a bit more effort and diligence? Here are just a few clues that it’s time to stick it out and renew the energy and resources to continue:

1.      Required capital was initially under-estimated (this is common) but doors are still open to you for additional resources, even if from friends and family.  You may be reticent to ask again, and that's a fair concern... and indicative that you are being wise with investors' trust and money. Still, it is your responsibility to manage your enterprise wisely and to sell your vision. But never confuse your very real fiscal responsibility with imagined guilt of the risk both you and investors are taking together.

2.      You’ve not yet introduced your MVP (minimally viable product)... but it is because you’ve made a valid pivot from the original plan. If the delay from these pivots are based on honest and useful customer feedback, the delays are valid and a good reason for asking for more runway. 

3.      Your reasons for delays and obstacles are not excuses. There’s a difference between a problem you cannot control and therefore must accept and overcome, versus a crisis you created or could have changed but chose to ignore.

4.      The market gap that your product/service is intended to fill is still not being adequately filled by established competitors. As long as it will fill a genuine need in the market (presuming you’ve done that diligence) then there is still an opportunity to be exploited.

5.      You can identify all the voices telling you that you cannot do it - because they all sound remarkably like you. They are all inside your own head. Take a step back and look at yourself in the third person. Is the negativity you are hearing from yourself the same you’d tell someone in your identical position? Or would you be kinder, more encouraging while still realistic? 

Like my earlier post giving you good reasons to shut the doors, there are no hard and fast rules, and of course, any one of these are not a guarantee of a successful start-up deserving your continued effort. But just as it is unwise to continue to pursue a start-up out of obligation, it is unwise to make a permanent decision about shuttering it without taking a moment to review the real reasons for your current discouragement.

Few if any start-up situations ever meet ideal expectations. But with a deep breath and a little introspection, you might find that the reality of the situation is far from desperate. 

5 reasons to shutter your start-up.

There's no lack of enthusiastic blogs, posters, and gurus out there encouraging you to follow your dreams and strike out on your own. So I am aware that my contrarian posts can be a real downer, as I’ve written several posts that discourage potential start-ups from, well, starting up, including the fallacy of expecting a ‘better’ product to succeed, or the idea that you should chase your dreams.

But there are great ideas that deserve your attention and enthusiasm. Yet once you’ve already sunk your heart and soul and 401K into your business, when is negative thinking just ‘nattering nabobs of negativity’, and when does it become a warning that something is wrong and you need to get out? After all, the sage tells us that ‘everything is temporary given enough time’, and we all know that even expected obstacles cost more and take longer to overcome than ever often predicted.

So when is enough enough? There are a few clues that it’s time to recognize that it’s time to close the doors:

1. You, yourself, are exhausted and cannot continue to infuse your discouraged team with requisite energy to soldier on through the current circumstances.
2. Resources are spent. This seems obvious, but resources are never really ‘gone’, just harder to raise - but if you are spending more time raising funds instead of selling an MVP (minimally viable product), you are on a slippery slope.
3. You’ve made little progress in overcoming objections from potential users either in fact or positioning.
4. You’ve missed initial, and extended, deadlines and milestones.
5. The market gap that the product/service needed to have filled is beginning to be adequately filled by established competitors.

There are no hard and fast rules, and any one of these are not indicative of a start-up needing to be shuttered. But any two or more create an uphill battle that takes the joy, enthusiasm, and health and finances of founders down with it.

Unless your start-up is a cruise line, there’s no glory in going down with the ship. 

80/20, myths, and choice

We often think of myths as ancient Greek folktales of Gods and warriors, or in a business seetting, platitudes like 'the customer is always right' (they aren't) and 'the check is in the mail (it isn't).

I built a personal philosophy in my early days using Pareto's Principle, otherwise known as 'the 80/20 rule', believing that it had a place in every fabric of the universe and would, one day, be a key part of the 'meaning of it all'.

Today however, that which was once seen and known is more and more a myth... technology has unwound Pareto, that which I once thought was the very fabric of being.

20% of buyers produce 80% of the profits
20% of staff produce 80% of the results
..and so forth.

Not so fast.

As much as the 80/20 rule has become a standard researchers at the MIT suggest that technology has diminished its influence. The book The Long Tail: Why the Future of Business is Selling Less of More by Chris Anderson suggests this as well. In fact, the book can be found on Amazon.com, where lesser-known titles are now producing 40% of Amazon.com’s revenue.

The long tail at Amazon has been described thusly: “Amazon sold more books today that didn’t sell at all yesterday than Amazon sold today of all the books that did sell yesterday.”

Read that twice. (The long tail refers to the infinite outlier in a standard bell curve.)

In a new MIT report, “Goodbye Pareto Principle, Hello Long Tail: The Effect of Search Costs on the Concentration of Product Sales”, researchers discovered that when comparing catalog to online sales in womens clothing, the 80/20 was only applying to mail order catalog sales. The 80/20 was moot online.

Of course, Pareto still has influence in the natural world: 20% of the trees will still grow 80% of the apples, and you'll still spend 80% of your time with 20% of your friends, but when it comes to the Laws of Choice, it’s changing the way we do business.