Startups Stack Exchange Archive

When is the right time to kill an idea?

Early stage of a startup is all about validating your idea, but even so it takes about 3 years for a startup to really hit hyper growth. It takes really long time for your startup to really mean something, on the other hand you need to ditch your idea as soon as possible if you realise it isn’t going anywhere.

So, when is the right time to kill an idea?

Answer 1821

It depends.

I’m starting to think it might be time for me to get a tattoo of that sentence, I say it so much.

Giving up an idea is sad, and it’s awful, and you feel cheated, and it’s just not a good experience, but you’re definitely right: it’s important, when the “time is right” (whatever that means), to move on from one business in search of something else. Some awesome ideas just don’t get enough traction to happen when they need to.

That part’s pretty universal, but defining the “right time” is really where it starts to depend on pretty well every variable you can imagine.

#Funding

The most obvious answer to me is in funding. If your business is costing you $500 a month and you’re making $200, you’d better be sure you can afford to keep going. “Afford” is a word worthy of a post in and of itself, and I’ll leave that up to you, but ultimately, a lot of businesses (and particularly startups) crumble after going bankrupt. That’s just the way of the world. You can fight to get more funding from outside investors, but then it’s just up to them whether your business will go on or not.

#Morale

This one’s tougher to quantify. Morale is something that, for how much we hear about it, a lot of businesses just don’t gather well, but in my humble opinion, I’d say it’s among the most important assets to any kind of business. There are definitely different types of morale–you can have people who are pumped to work because you give awesome benefits and great hours, or you can have people who are pumped to work at all hours for little pay because they see you going somewhere big and they want to be on board–but whatever type you have, you should strive to maintain it.

But at one point or another, employees, whatever the circumstances, will start to question whether their work is actually mattering. Some may not care, but those aren’t the kinds of people who make awesome businesses flourish. When morale drops beyond a certain point and people dread working, they’re going to stop building great products. If your business isn’t doing well and your morale falls down, your business is probably going to get worse. The obvious solution is to find new people, but that can be a challenge when a business is doing poorly.

#Customer Base

This one’s another pretty clear one to theorize, but it’s hard to find the right constants: if you don’t have enough growth to foresee success and you’ve been at it for a while, it’s time to stop. Now, “enough growth” and “success” are each super frustrating to define. “Success” clearly differs from business type to business type (a restaurant has different standards for success than, say, a company like Twitter) and even person to person.

Enough growth is a bit more difficult. I don’t think there’s a magical formula to finding a number for “enough growth.” Just think about what you need out of it. It’s mechanical and boring, but what do you need to count as successful, when do you need to see that success, and how long will your current rate of growth take to get you there.

If you’re devoting twenty hour work days and gaining one customer a week, with your rent starting to pile up, your current growth probably isn’t going to pay off everything in the business before you end up on the street. That might be a good time to give up, and yes, I said “might.” This is subjective and up to each business owner.

#Other opportunities

This is probably the most fundamental of all. If you have job offers coming in every day for awesome jobs at awesome companies, and yours isn’t growing, it might be time to put it on the backburner. Similarly, if this is really all you have, it might be worth investing a bit more time in it.

#Conclusion

I wish there was a two-sentence answer that every business could use to evaluate these sorts of questions, but I just don’t think there is one. Every business is different, and the decision of when to close down can vary dramatically between them.

It’s worth noting that there are types of businesses where you can slow efforts and do things in the background, and that’s not always a bad option. Everyone wants to do their idea full-time, but sometimes that’s just not possible. If your business is slowly growing and you can find a job with a good moonlighting contract, that can be a great plan. On the other hand, there are types and stages of businesses where that just doesn’t, unfortunately, work. In that case, you can look into finding someone to take some equity to sell or run things, which can be the lesser of two evils when compared to permanently closing.

Not really relevant, but still a great blog post that I thought about a lot when writing this: Joel on Software’s Strategy Letter I: Ben and Jerry’s vs. Amazon.

Answer 2922

It really depends on a lot of factors.

In short: If you know the audience is there, and there is a need for your product, and you have a sound business model, the question shouldn’t be “when do you kill an idea” but “what part of our business model is not profitable”.

Have You Identified Your Target Audience?

Are you trying to sell a product to a group of people who don’t exist? Is there an existing market for the type of product you’re selling? Is there a need for the type of product you’re trying to sell?

You need to identify these things immediately. What may sound like a great product idea to you might just not have a market of people who really need the product.

If this is the case, it’s probably a good idea to either kill the project or do more research to find out how you can “redesign” your product to reach the correct market of buyers.

Do You Have A Sound Business Model?

In short: Are you able to turn $1 into $2? Do you know how much each visitor to your business is worth to you? It’s important to know the answer to this question.

Here is a great article on the subject: http://www.capturecommerce.com/blog/conversion-rate-optimization/much-money-web-visitor-worth/

If you have identified there is a target audience, and you have a sound business model, the next step is to find out what part of your business model is not profitable.

Simple changes can make a huge difference.

For example: Let’s say you’re selling a piece of software. Do you have a free trial? Do you have a freeware version? Having a trial or freeware version can get your software into the hands of more potential buyers.

My Suggestions

Since I don’t know the answers to the above questions, it’s hard to give more detailed advice. I would suggest you start building an email list of potential customers and current customers. Start surveying them, ask them how you could better your product.

There’s a good chance you will find the answer to why your product or service isn’t going in the direction it should.

I hope this information was helpful to you and I apologize if I went in the wrong direction. Your question was very basic and I could only give advice based on my assumptions.

Answer 2974

I have done enough startups where I will never go through another startup where it takes me years to get traction…it is just too painful.

Set Goals

Set goals for your startup. Set goals for each week/month. Goals don’t always have to be money goals, but can be obtaining a certain number of email list signups, etc..
Recognize Missed Goals / Make Changes =========== Every time you miss a goal, stop and evaluate what went wrong. Make changes and try to obtain that goal again or set a different goal (and I don’t mean just lowering the bar). A missed goal might be a red-flag to let you know you need to go in a different direction, so change the goal to reflect that new direction if needed. Quit =========== There is no set number of missed goals that automatically mean its time to quit. However, the continuous missed goals should be the queue that it is time to exit. Most entrepreneurs fail to recognize that their startup is a flop because they don’t set goals, which makes it difficult to accurately evaluate their progress. Set goals, evaluate your missed goals and recognize when its impossible to hit your future goals. Good Luck!

Answer 7888

I recently listened to a podcast episode of Startups for the Rest of Us in which the hosts discussed exactly that question from an angle of bootstrapped, self-funded startups.

Here is the episode: 13 Signs You Should Kill an Idea You’re Validating.

13 signs to kill an idea

I basically copied these from the shownotes and added some additional explanation by myself. Here are the 13 signs to kill an idea brought up by Rob Walling and Mike Taber:

  1. you’re avoiding talking to prospective customers. That is: how would you be able to solve someone’s problem when you’re not knowing which problems they have. Talking to prospective customers is essential.
  2. you’re having a difficult time finding people in your target market to talk to. That’s means you’re having difficulties to reach your target market in an efficient manner.
  3. it’s difficult to describe the idea or the value proposition.
  4. you’re having a difficult time identifying a specific group of people who will use it. That means you’re not able to pinpoint who’s problems you’re gonna solve with your idea.
  5. general disqualifiers about several factors that make an idea very hard to bootstrap: e.g. they discussed two-sided market ideas, social platforms, ideas that won’t charge its direct users (a.k.a ad models). These are usually ideas you’ll need funding to realize.
  6. you’re having a difficult time identifying a common problem among people you’ve spoken to.
  7. is that people say that it’s interesting, but nobody’s actually willing to pay for it. This can be validated by credit-card upfront testing. You’re not really charging them, but when they’re willing to put in their credit card info there is a high chance that they’ll gonna pay you for the service you’re offering.
  8. you’re interested in it just for the money, and you can’t see yourself working on it for an extended period of time. Also Patrick McKenzie talked about that with respect to his Appointment Reminder product. McKenzie calls this the Peldi-Test (Peldi from Balsamiq) as well.
  9. you’ve spent more than a month doing customer development and still haven’t been able to answer some basic, objective questions about it. That means you can’t get a clear picture of your target audience.
  10. you can’t quantify how much the idea is worth. That means, you’re not able to get a grasp of how much to charge for it.
  11. you’re finding it hard to be objective. That means you’re suffering the shiny object syndrome.
  12. what people want is something that you can’t deliver. For example if people would pay for the idea but you can’t do it technically. They gave Justin Vincent as an example who had an idea but speech recognition APIs he tested weren’t able to do the job.
  13. you’re not learning anything new. That means you’ve already talked to a lot of prospective customers and these conversations don’t tell you anything new. Then it’s time to make a decision to either ditch or continue with the idea.

All content is licensed under CC BY-SA 3.0.