I recently received a phone call from an entrepreneur who was trying to decide whether or not to lay his startup to rest. It was a challenging yet therapeutic call for me. Having made the decision to close my first startup five months ago, I felt his pain. It also brought to surface my feelings of "what if" and the pain of turning away from a project that took so much of my heart, time, and money.
So the question is, when do you quit?
For me, deciding to close felt like an agonizing and long process, but in reality it happened in a matter of weeks. The economy was going south - just a couple of weeks after the 2008 banking crisis. I had a technology deal go south as well, and I was almost out of money. I had risked all that I was willing to risk in terms of time, money, and energy, and I was exhausted.
As we all know, the numbers and assumptions hold the answer. With the collapse of the technology deal and a cold investor climate, I knew that the end was near, as it would be at least six more months before the business was out of the red. In order to make the final decision, I brought in consultants to go over the big picture and numbers with me and to see if they saw something I didn't. Years ago, I heard that if more than three advisors tell you "stop" that you really should stop. I wanted plenty of confirmation, and I got it... even from supporters that had been following me for years.
Failure is a difficult thing that doesn't get any easier with age. I think it's important for entrepreneurs to know when to quit, and to stay very conscious of the fact that startups are high risk and that things can change quickly. It's important to control risk and to protect our stress levels as much as possible, so that we stay on top of the game. You also have to trust that you will continue your entrepreneurial spirit, if it's at the core of your being. You just need time to appreciate the lessons you learn and to save energy for the next one.