When to kill a startup?
I've been working on a side project for several months, and it's doing ok. I've done a lot of testing and talking to customers, and I'm very confident that this could be a viable small business within a year. Probably 2 or 3 employees, and a reasonable profit each month. My question is whether something that is only going to be moderately successful should be killed, or whether you should follow through with something like that. The reason I ask is because I've started a number of projects like this, they all get to this same point where it looks like they'll be a reasonable small business, and then I kill them every time and move on to the next project. Am I making a mistake by killing them?
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Anytime you want ;) – Ph D 13 years ago
5 Answers
If you have built and not killed, say 10, projects like this- wouldn't you have either 10 small businesses, or one large one that in total employed 20 - 30 people and were pulling in lots of money per month? Why is everyone obsessed with creating only giant businesses?
There is much less risk in creating 10 small companies than in creating one big one. (Plus much of the business aspect of each small firm can be copied from the last.) And there is much less risk that something unforeseen will kill all 10 small businesses rather than kill one big one.
The idea that you need to search until you come up with one killer idea, so that you can sell the whole thing off and retire, is equivalent to a 6 year old assuming he is going to be a star in the NBA. It's unrealistic at best, and self defeating.
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Thanks for the answer Gary. I actually much prefer the idea of running a company with 10 small businesses rather than one giant business, but the reason why I'm debating whether or not to pull the plug on this one is because the time commitment it involves would make it very difficult to build the other 9 small businesses. – Nick Budden 13 years ago
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you can probably kill those that require more time and continue with the less time consuming one. – Rashid 13 years ago
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So if you continue with this one you would have 1 small business. If you kill every business you start you will end up with...zero small businesses! Is this time commitment going to be perpetual? Can you get it to a point where you can hire someone else to continue to run it, and start work on your next idea? – Dj Clayworth 13 years ago
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I think its worth reading up Rob Wallings - "Start Small, stay small" blog for some inspiration. He talkings about running small, highly profitable ($ p/h) micro businesses. (like 4 hour work week but more actionable and less self promoting) http://www.softwarebyrob.com/ – Ryan 13 years ago
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I've got a copy of Rob's book but I've never read it, I'll have a look into it. – Nick Budden 13 years ago
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I wish I could upvote this answer more than once! – Umassthrower 13 years ago
Remember from school: Creator, Innovator, Implementer, Maintainer
Sounds like you are Creator, Innovator, and get into Implementer when you're losing steam. We all have areas we prefer. Do you know someone who is strong on Implement and Maintain, who would like to partner with you on this one product? It might be that your strength is to create and then line up the next phase, with you as advisor and developer and someone else as marketing and selling. You might not know anyone; however, I agree with Gary that you're not getting traction. This doesn't mean the person(s) you pair up with are involved in the next product. In a sense, it's as though you have multiple clients. The client is your product and the team you put together for that product. For me, running simultaneous gigs is simpler if I think of them as clients rather than jobs or companies.
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This is a good point, and I do know someone. I'll approach him to see what he thinks. – Nick Budden 13 years ago
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Let's say your friend's name is Paul. The two of you can work on a business plan/marketing plan for the product. Paul begins to bring in potential customers. You and he meet to discuss how you will support and innovate the product and how he will bring the product to market. He keeps you in the loop regarding customers, you get great UID and features feedback. You keep him in the loop regarding upcoming features, which he conveys to customers. If you consider Paul and the team he may build as the client and customers, you will have time to build this product out and begin sketching the next. – Kelly Cooper 13 years ago
To me this heavily depends on how much dollars per hour this company creates.
If you bring down the weekly workload to four hours through automation / delegation and make $3000 per month from it, would you really want to kill something that puts ~$170 per working hour into your pockets?
From your question I also get the feeling that you never actually succeeded in running a startup, because you killed them all before they took off - is that right?
If so, how do you know that they had taken off? I mean: it was all in your mind.
So go ahead and try it, you'll come out a lot wiser on the other side.
EDIT to answer Nick's comment:
Start the journey with the end in sight. Give yourself a reasonable time frame - e.g. six months - during which you will commit yourself full time to this (ad)venture. Focus on automating tasks through VAs or your future employees, so that you can practically exit (work less than X hours per week) the company.
Then you have enough time to put into the next business.
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I'll try to break down the number of hours to get a better idea. I had gotten startups profitable before and sort of lifestyle business level, but not past that. – Nick Budden 13 years ago
Why KILL it?
If I was in your shoes I would do one of:
1) Streamline it so it takes up much less of my time (even if that reduces how much I earn from it), so as to free up time for my next start up project.
2) Sell it!
There is no "when".
Everyone has different motivations and goals in their life projects. However I think most people would tell you that if you managed to get to the point where the idea looks even remotely viable you would be somewhat crazy to kill it off after sinking so much time and energy into it.
IMO, your most rational course of action would be to continue to build this business and then look to sell it off once there was a predictable cash flow going on. Use the money from the sale to build the next idea...
