Entrepreneur Beginners Guide
“Move on Fast from a Bad Business Idea”
Nothing is more dangerous than an idea when it is the only one you have.
—Emile Chartier, French philosopher, journalist
“My company is headed for sure failure, and I think the best thing to do is to shut it down before things get worse.” How many times have you heard such a candid assessment of a business by its founder? If you are like the, it’s probably not often. During my twelve years of being in business and in associated professional circles, I can count on one hand the number of times an entrepreneur has told me that a company is doing poorly or is destined to crash and burn.
Why is that? Entrepreneurs are naturally tenacious, and expectedly so. They never give up; they stick with an idea until the death. We have all heard a miracle story or two that involves a founder who overcame great odds. Pandora, a company that Tim Westergren founded and that took ten years to turn a profit, comes to mind. It’s quite an inspiring story of patience and persistence, but far from the norm.
Rarely is the negative side of entrepreneurial tenacity discussed, but I have witnessed so many entrepreneurs hold on to a bad idea far too long. They refuse to acknowledge that things are going south or have no promise, and they go down with the sinking ship. For instance, a good friend of mine finally threw in the towel on his men’s marriage magazine. He stuck with it for almost an entire decade. I commend his determination, but I am happy he has moved on. It was like he kept trying to make a bad marriage work (pun intended). A smart guy, he would have been better off devoting his time to other ideas.
This problem is common among novice entrepreneurs. They tend to think that the idea they have is the only good one they’ve got, demanding an all-or-nothing response with no retreat possible.
However, serial entrepreneurs and those who have built massive amounts of wealth in business rarely make this mistake. Through their experience, they have learned how to determine whether to stay with an idea and for how long. Their previous success enables them to admit their failures freely and move on to the next opportunity.
Regardless of your business experience, you want to avoid the untamed-tenacity syndrome. Unfortunately, no definitive list of signs lets you know if you should abandon your idea. One reason is that signs can be specific to an industry.
For example, I would have told my friend with the magazine to listen closely to Marc Andreessen, cofounder of Netscape and venture capitalist, in a recent television interview. I paraphrase: “Publications should cut their losses by shutting down their presses and moving to the digital realm. Print is dead. Advertising dollars in print are drying up for that medium. Therefore, now is not the ideal time to start a print publication.” Your circumstance may be different. Perhaps your breakeven point is too far down the road based on industry metrics, or your market is too small to be profitable. As alluded to in the magazine scenario, you must find the oracles and special metrics in your industry to make sure you are on track.
Reiterating Chartier’s statement at the beginning of this section, an entrepreneur with a single idea can be catastrophic. Don’t let a bad idea derail your plans for greatness. If it isn’t working, move on or adjust quickly.