Making sacrifices is a prerequisite for a successful launch. However, it is important that you do not do this … [+]
One of the greatest discoveries in early human history, arguably just as important as the taming of fire or the invention of the first tools, was the discovery that one could negotiate with reality: one could now sacrifice something valuable in order to gain something get even better in the future.
Instead of eating the seeds you have now, you can plant them, water them, and reap a bountiful harvest in a season or two. In other words, if you can stand getting hungry now, you may never need to be hungry again.
This is not much different from the fundamental promise of entrepreneurship, especially in the field of startups. Live on ramen now and you may only eat rib eye in the future. Work eighty hours a week now and you may not have to work at all in the future.
Mastering delayed gratification is admirable, but this mindset, while correct, combined with the risk posed by startups, can lead to a trap. The 80-hour work week and the ramen lifestyle are unfortunately no guarantee of future success. And unsurprisingly, being stuck in this lifestyle all the time is a very bad idea. Business is not a good reason to be martyred.
Too many startups don’t fail, they enter what startup circles call “the land of the living dead”. The startup is not successful enough to support a normal lifestyle for its founders, but at the same time shows signs of life that convince the founders to keep grinding.
If you find yourself in such a situation, should you hold on or give up on your idea?
This is one of the toughest questions for an entrepreneur. If you stop too early, you may not find a happy break around the corner. Exiting too late means too much time and effort has been wasted.
There are very, very few people who have succeeded with their first idea. And in order to develop your next startup idea, you need to be comfortable giving up on your last one. The faster you can test ideas empirically, the greater your chances of success.
There are two tools you can use to measure the success of your idea and see when it’s time to give up or not:
The first is a key performance indicator (KPI). Typically, this is a usage metric that indicates that people are getting real value from your product – a leading indicator of how the product market is adjusting. Can you attract new users and do these users actively use your product or service? If you focus almost entirely on these KPIs, you can be sure that you are not wasting your time in the early start-up stages.
The second is a deadline for validating the idea. Give yourself enough time to empirically test your startup idea correctly and, after the time has elapsed, evaluate where you stand in relation to your KPI.
If the results are good – great, keep working on the idea.
If you are not getting anywhere near your expectations (i.e. you are not getting any traction at all) the very likely the market just doesn’t want what you are building. It’s time to give up on your idea and try something new.
If you have fallen short of your expectations and have found some traction at the same time, you are in dangerous territory. It is here that it becomes possible to get stuck in the land of the living dead, and this is fate that you want to avoid at all costs. So you have to be crucial. Get feedback from your customers, repeat your idea (or rotate it if necessary) and set a new validation deadline by which you will hopefully get better results. If the changes don’t lead to significant improvements, it’s time to move on.
In conclusion, remember that making sacrifices is usually a requirement for success in the early start-up stages. You have to work hard, you have to do various things outside of your comfort zone, and you probably have to do it with no immediate reward. However, it’s important to make sure you’re not making sacrifices for a lost cause. Validate your ideas quickly and kill the unsuccessful ones crucially to free up resources for new, better ideas.