I’m one of the lucky few entrepreneurs whose ideas have manifested in successful startup businesses. But I’ve still had to consider when to give up on what once seemed to be a good idea. Four factors have guided my thinking:
Financial Shortfall. Nothing will kill an idea quicker than financial problems. Cash shortages, excessive burn rates, failure to monetize, or the inability to attract investors – these are good signs that your idea lacks the financial muscle to become a viable operation. Remember, an idea is only a concept. There is a key difference between what sounds good in theory and what will actually make good in practice. The market might not be ready, and your idea too smart, to find the necessary alignment between the two. Indeed, many great ideas are too far ahead of their time to be successful. Remember the dot-com bubble that burst in spectacular fashion at the turn of the century? How many of those deceased firms were based on ideas that later turned out to be viable once the market caught up? The social media market might be dramatically different today if some of the original ideas for this industry actually were able to attract market attention in the 1990s rather than a decade later.
The Rudderless Ship. Your idea might be on death’s door if you find yourself aimlessly wandering in a sea of ambiguity rather than making forward progress. This relates to more than financing. The inability to develop a coherent business plan means that your idea might be too vague for its own good. The failure to communicate your idea in a way that makes sense to others is another sign that it might be time to pull the plug. One of my friends had a great idea, perfect in theory, that went through several permutations over the course of a year. All of these versions would have resulted in much different types of businesses. He finally concluded that the nature of the idea was too broad to be practical. After wandering the sea of ambiguity for a year, he abandoned ship.
The Unhappy Heart. Have you lost that loving feeling? Your relationship with your idea might go through the same inexorable decline as your last failed relationship. Perhaps your idea no longer stirs your loins, so to speak. If so, it might be time to address the fact that both of you have just grown too far apart to justify staying together any longer. Don’t hold on to the memory of what was once a good idea merely because of sentiment. One of my mentors told me that the best ideas never lose their appeal, even if they might not always enjoy market success. If our idea seems more like a ball and chain and less like an object of affection, it’s time to end what was once a great thing.
The Elusive Market. Markets always change, and our ideas might only have a brief window of opportunity to gain traction. Market conditions are like the natural environment, presenting constant competitive pressure that demands adaptation to survive. Consequently, ideas for start-ups operate according to the same principle as natural selection. Our ideas might become extinct as a result of the ever-changing market. Our ideas do not exist in a bubble. They only matter in relation to market conditions. If your evaluation of the market no longer supports your idea, you’re holding on to false hope.
Ideas are like children. They have been nurtured from birth to maturity. It’s normal for us not to want to let them go. But just like children, ideas must also be set free to survive on their own. I don’t want my ideas to be like the stereotypical Millennial – living at home past the age of qualifying as a dependent. I know my ideas must be let go when they are wandering aimlessly, showing no ability to earn income and wearing my heartstrings thin. It might be hard to say goodbye, but the sooner I do the sooner I can welcome the next child into the fold.