To Be or Not to Be… That is the question.
Startup Founders Living Inside the Onion.
Being a startup founder is like living inside an onion… no, not because you have bad breath, but because when you’re inside the onion, you don’t know if it has five layers or 500 away from daylight. Each layer of the onion is a challenge, and if you can get past this layer, you’ll see daylight. Except when you peel back that layer, you find another layer. When will you peel back the last layer? When will you get to daylight? Should you be or not be? That is the question.
It’s hard to give up on your baby… but founders… this isn’t your baby. Never give up on your baby, but when your startup is costing you your sanity, your health, your family, your friends… then the Universe is giving you a message about the 100 layers behind that next layer. The Universe is telling you to look up “The Sunk Cost Fallacy.”
Many psychologists and economists have delved into the dangers of the sunk cost fallacy, one of the most notable being Daniel Kahneman, who remarked:
“The sunk-cost fallacy keeps people for too long in poor jobs, unhappy marriages, and unpromising research projects.”
—- Nobel Prize-winning psychologist, Daniel Kahneman
Being a startup founder is hard. It’s even harder when your startup is failing. You’ve invested so much time, money, and energy into your company, and it’s difficult to let go. But sometimes, the best thing you can do for your company is to quit.
The sunk cost fallacy is a cognitive bias that can make it difficult for founders to quit their failing startups. This fallacy is the idea that we should continue to invest in something that is not working just because we have already invested a lot of time, money, or effort into it.
In the context of a startup, the sunk cost fallacy can lead founders to continue investing in their company, even when it is clear that the company is not going to succeed. This can be a costly mistake, both financially and emotionally.
If you are a startup founder who is struggling to decide whether to quit, here are a few things to consider:
- Sunk Cash – How much money have you invested in your company? If you have invested a lot of money, it can be difficult to let go. But it’s important to remember that the money you have already invested is gone. It’s not coming back, no matter what you do.
- Sunk Time – How much time have you invested in your company? Have you spent years working on your startup? It can be hard to walk away from something you have put so much time into. But it’s important to remember that your time is valuable. You could be spending your time on something that is more likely to succeed.
- Sunk Energy – How much of your energy have you invested in your company? Have you sacrificed your health, your relationships, and your sanity for your startup? It’s important to take care of yourself. If your startup is taking a toll on your physical and mental health, it’s time to quit.
If you’ve considered all of these factors and you still think your startup has a chance of succeeding… seek advice before you go on to fight.
Have you ever met a parent who has an ugly baby? Your startup ain’t your baby, and while you may be viewing your startup through rose-colored glasses, an unbiased well informed, experienced third party may be a better judge of beauty.
But if you’ve reached the point where you know your startup is not going to succeed, then it’s time to quit. It’s not easy, but it’s the best thing you can do for yourself and for your company.
Here are some tips for quitting your failing startup:
- Talk to your team. Let your team know that you are considering quitting the company. This will give them time to prepare for the transition.
- Start planning your exit. Once you have decided to quit, start planning your exit. This includes figuring out how you will wind down the company, pay your employees, and return any investor money.
- Take care of yourself. Quitting your startup can be a traumatic experience. Be sure to take care of yourself physically and emotionally.
- Learn from your experience. Quitting your startup is not a failure. It’s an opportunity to learn and grow. Use your experience to start a new company or to take a job at a successful startup.
Quitting a failing startup is never easy. But it can be the best decision you ever make. By following these tips, you can make the transition as smooth as possible and set yourself up for success in the future.