Thursday, June 19, 2014

Entrepreneur's key lesson: learn when to "rip off the Band-Aid" and give up

From, "My Biggest Failure? Failing to Recognize Failure," by Robert J. Moore in the New York Times You're the Boss blog:

In pursuit of big dreams, entrepreneurs miss nights out with friends, days on the beach, and even moments with family.

These sacrifices can create strong emotional ties between founders and their visions, making it difficult to let go. The hard truth is that emotional investment in a business is a sunk cost. It cannot be recovered, and using its existence to justify future investments of time is economically irrational. But try telling that to a passionate founder.

I fell victim to that fallacy soon after SmartRaise was started. The data showed that some of my assumptions had been wrong, and the economics of the business simply would not work. Despite my data-driven DNA, however, I hung on for dear life. After all that work, giving up couldn’t possibly be the best move, could it?

I spent weeks waiting for the data to turn in my favor, programming new features and trying out new marketing tactics. I “pivoted” a few times, but these weren’t true pivots, just small tweaks to the already disproved business model. My emotional immaturity trumped my economic logic, dooming SmartRaise to a slower, more painful death than it deserved.

Today, failure comes much more naturally because I concentrate my emotions on the bigger picture. Failures are educational and contribute to a (far away) life goal of becoming a great entrepreneur. This makes it a bit easier to rip off the Band-Aid when necessary.

If you are spending countless hours on a new project, friends and family will naturally ask you about it. After that, every time you see them they will want an update on how it is going. And who can blame them? Entrepreneurship can be exciting.

This pattern, however, can put you in an uncomfortable spot if you end up walking away from an idea. When I shut down SmartRaise, I dreaded seeing all those inquisitive friends — how would I explain that the site was no more?

What I quickly learned, though, was that no one cared nearly as much as I did. I came to realize that all those people asking for updates were not interested in how SmartRaise was doing — they were interested in how I was doing. I was touched, and they were immediately supportive of my new direction.

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