Failed to Quit

Failed to quit!

I wrote about grit and determination in an earlier post, but also wrote about quitting without losing your joy of life in another. While each point is quite reasonable, it may cursorily feel like contradiction.?

Aren’t grit, determination, resolve, digging in, all against quitting??

This is the “see saw” journey that every entrepreneur faces.

So the real question is – how do you know when you should dig in and when should you quit?

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Maybe you facing a temporary slump and maybe, success is just around the corner??

Or

Maybe you just wasting your time?

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I have faced this a thousand times; and entrepreneurs face this dilemma all the time too. It’s like two voices in our heads. Dig in.. Quit.. Dig in.. Quit..?

I have seen people quitting early, and people who dug in till they lost everything. Entrepreneurs are driven, they don’t like to quit, so I have seen the latter happen often – where they should have quit but they don’t. We also associate heroism with the latter behavior. But I think that every successful entrepreneur has quit on something before. It’s about being practical. So quitting isn’t negative in my book.?

The question is about the timing. When?

Here’s my experience. Before we delve into how to figure out the right time to quit, let’s visit a few principles:

• Entrepreneurs have optimism bias. Otherwise, we wouldn’t have jumped to take the risks we’ve taken.
• This bias makes us under-estimate the chances of failure. If someone sees a 50% chance of something failing, us entrepreneurs see it as a 10% chance. That’s because we think that we can bend that probability through our agency. That is why economics considers “Enterprise” as one of the important factors of production. Entrepreneurs by nature work against odds.
• So we tend to operate in two modes - either our work is a “success” or “yet to be a success”. In reality, there are three states - “success”, “yet to be a success”, and “will not be a success”. But we have, what I call, an inherent “third state blindness.”
• We can’t help it. This blindness is what makes entrepreneurs take outsized chances too. We see more ways of things working than ways in which it won’t.?
• So we need to compensate ourselves against this blind spot to know when we are in the “not a success” zone.

Now that we have understood the psychology, here’s what I have used to make my quit decisions:

• We all run experiments to test whether our product has PMF (product-market-fit). This is a well understood concept. Design your features, create MVP, run it with early adopters, measure the results, improve, repeat. Simple!
• What we do is process the outcome as +1 (if it is working) or 0 (if it isn’t working). Actually, we really only know when something is working, we never know when it isn’t. The “not working” signal is noisy. We don’t know if it is “not working yet” or “will never work”.?
• We mistakenly think that we could tweak a few things and it will magically work. What we think of as “0” could be “-1” (will never work). But since we have this “third state blindness”, we mistake the “-1” as “0” and keep plowing ahead and make endless tweaks.
• So what we need to do is create a PMUF test: Product-Market-Unfit test. Please don’t google this – this is just an acronym I created. But walk with me here…
• Like the way we test a product for its “fit”, I also test for its “unfit”. By doing so, I am forcing myself to create the third state “-1”. And if my PMUF test results in “-1”, I know its smarter to quit.

Let’s look at some examples of what this “unfit” test looks like. These are just few examples to get you started but you can come up with your own.

• Anonymously pay someone to come up with 3 ways they’d disrupt your business.?
• Don’t show up to work for a week - do any of your customers miss you?
• Give your product free, or heavily discount for a month- see if people are lining up.
• Ask your mentors why you should continue. As a third party, if they don’t see a reason for you continue, they’ll help uncover the blindspot
• Attend an industry conference – don’t represent your company but pretend to be your own customer and see what other companies say about your product or your space.
• Write three articles or create videos recommending your competitive product or competitive space - did you get convinced by your own pitch?
• Here’s a fun one - host your company’s roast! Let your own employees come forward and speak about why it sucks!?

The idea here is to force yourself to face your own blindspots. If you still come out with conviction, move forward, else, move on! Gracefully quit. Release yourself. Recharge. And start fresh.

PS: I haven’t covered 2 other reasons why entrepreneurs fail to quit – a) Sunk cost fallacy and b) Ego/pride. This post has already gone long enough. We’ll cover that another day.