Knowing when to throw in the towel with your startup can be incredibly difficult.
When you’ve spent a lot of time developing your product it can be incredibly difficult to let go. I know. I’ve been there.
I spent over 4 months working on my first startup, Status Hive, before launching it to the world. I then spent months after that trying to market it and get some customers. But none ever bit and I eventually decided to drop the business almost a year after I started it.
In hindsight, it was obvious that I should’ve moved on from my startup well before I did. The warning signs were there, but I was so carried away by the excitement of starting a business and the desire to make it work that I completely missed them.
That’s why, now with a few more years of entrepreneurial experience, I’m writing this guide to help you work out if you need to move on from your business.
If you’re more of a watcher than a reader, check out this great video by Y-Combinator that gives you 5 more reasons to shutdown your business.
A Quick Note
Before we properly get started, I just wanted to remind you that, every entrepreneurial journey is unique. There is no one-size-fits-all answer as to whether you should shut down your business. What one person deems a success, someone else will deem a failure.
My aim with this article is to give you an insight into the general criteria that I look for when deciding whether I should give up on a startup. So remember to take each of these criteria with a pinch of salt when applying them to your own situation.
So without further ado, let’s explore the 7 reasons that you need to move on from your startup.
When Should You Move On From Your Business?
Replicated Feature Set
If you’ve started building a business and realise that you’ve just replicated another business’ functionality, it might be time to reconsider.
From my experience, all businesses need a unique selling point (USP), and that can’t just be price.
I made that exact mistake with my first startup, Status Hive, as well as not validating it before building. After building and launching my product, I was met with consistent feedback that my product was just a more expensive version of other products with less functionality.
There wasn’t really a way to get around that feedback. Not only would I have to massively improve the feature set of my product, but I’d also have to find a way to distinguish my product from the competition. Especially in the uptime monitoring market, where customers need to really trust your business before they buy, I’d need some really fancy features to get any customer.
So learn from my mistake here. It’s incredibly important to make sure you can distinguish yourself from the competition in as many ways as possible before you start working on your business. If you can’t think of a way to do that, it might be time to move on to another startup idea.
Flat Profits For A Year
If you find that your profits have flatlined or, even worse, are decreasing consistently over the span of a year, it may be an indication that your current strategies and business model are not generating the desired results.
This doesn’t necessarily mean that you need to give up on your business yet though! If you’re willing to find out from your customers why they’re not buying from your business anymore and fix their feedback, you can turn this around.
If you’re looking for more information on how to do this, check out our complete guide to the customer feedback loop here.
A Core Platform Replicates Your Features
If you’ve built your business on a platform that begins incorporating your product’s features into its core offering, it’s a significant challenge to recover from.
This situation is hard to remedy. Even if you double down on your business with extra features, there’s no guarantee.
Long-Term Lack of Motivation
While the other 2 points have focussed on issues to do with your business, this one is more personal. If you’re finding yourself consistently lacking the drive and passion that once fueled your entrepreneurial journey, it may be a sign that it’s time to consider moving on from your business.
Before seriously considering selling your business, I’d always recommend that you take a few weeks off from your business completely to check if your burnout is just temporary. Just make sure that your customers can survive without you, by getting someone else to take on your work while you’re gone.
If after a bit of time off, you’re still struggling for motivation, have a look at various startup marketplaces to sell your business.
You Receive a Great Offer
In contrast to the last point, it may be that you’re absolutely loving your startup, but you receive an acquisition offer that you just can’t refuse. Such an offer is a testament to the value and potential of your business, and it presents an opportunity to reap the rewards of your hard work.
When a significant acquisition offer comes your way, you need to seriously consider whether it aligns with your personal and professional goals. If the offer provides a compelling financial return and the opportunity to transition into a new phase of your entrepreneurship journey, it may be a clear sign that it’s time to move on from your startup.
What To Do After You Move On From Your Startup
No matter why you decide to move on from your startup, it can be challenging to pick yourself up. Whenever I’ve left a business, I’ve always found that it’s crucial to recognize that it doesn’t mark the end of your journey – it’s just a step towards your future.
Here are a few steps that I’ve found to help when moving on to a new project:
- Reflect and analyze: Take time to analyze what went well and what the challenges were from your last business
- Seek feedback: Seek feedback from fellow entrepreneurs, mentors, or industry experts who can offer fresh perspectives on your last business
- Expand your network: Attending networking events, meetups, and conferences can help you connect with other entrepreneurs and gain new ideas for your next business
- Begin anew: Utilize the knowledge and skills gained from your last business to help you on your new venture
Now that you know how to identify if it’s time to leave your business, have a look at our guide to validating your SaaS idea and the top 5 alternative marketing strategies for your startup.