Editor’s Note: This post was originally published on Seattle 2.0, and imported to GeekWire as part of our acquisition of Seattle 2.0 and its archival content. For more background, see this post.
By Alyssa Royse
All entrepreneurs are good at starting. Many are good at keeping going. Some can win big. But most of us struggle with stopping. Quitting. Throwing in the towel. Admitting that this one just isn’t going to work.
As I prepared to head to a JUST CAUSE board meeting and admit that I just wasn’t going to be able to make it work right now, I had to think about lots of things, including why I didn’t admit this earlier. And by admit it, I mean admit it to myself.
There are some obvious reasons:
1. I still know I’m right. Both the product and the model make sense. Given the right circumstances (like the ability to single-handedly change and emerging digital media market into a mature one that does what I want) it would be HUGE.
2. I’m willing to keep going. I’m not out of passion yet. I am out of money and energy, but I can get high on passion like no one you’ve ever known.
3. I felt guilty. I took people’s money, and I don’t take that lightly. These people believed in me, my vision, my skills, and I just can’t stand the idea of telling them that I lost their money. (And risk having them lose faith in me.)
I don’t think these are at all unusual. It is heart breaking to give up on a startup. It’s worse than ending a romance, (though may give a little more time for starting one, so that’s something.)
That said, when it’s time to give up, you owe it to yourself and your board and your team and your investors to do it. And be completely and totally honest about it. When we were preparing for this meeting, I told my board that I was sad, scared, disappointed, and embarrassed. I also told them that I still believed, and I didn’t want to kill JUST CAUSE because I still think there’s a place for it, someday.
When I got to the meeting, my board hugged me, and I shed a tear. They had ice cream there, and I was reminded how much these guys mean to me. And that hadn’t changed. We did talk about all the options, but ultimately agreed, it’s time to kill it. And here’s why:
1. The investors deserve a clean end. When they invested, they did so knowing that it was extremely likely they would lose their money. The vast majority of startups fail, this is not special. However, if they’re not going to make money, they deserve their tax write-off.
2. We are all, to some extent, liable for whatever expenses are incurred letting the thing limp along. When you are nothing more than a long overdue “accounts receivable” line on the balance sheets of your vendors, that’s bad for everyone.
3. No one enjoys having to answer the “how’s that startup going” question. Not them, not you. And when your board doesn’t have a good answer when their friends ask them, it builds ill will.
For all those reasons, we decided to officially shut down JUST CAUSE last week.
However, that may or may not be the end of the story. We very candidly discussed what we learned and did in the process of trying to make it work. Luckily, one of my board members / investors is in the ad industry and knows intimately how impossible the market is right now. So we took it apart and all still think, kind of, that there may, some day, be a way to make it work.
They also saw, very clearly, how much I had put into it. No one in that room could suggest that I didn’t try everything within my reach (and a lot well out of it) to get it going. As a result, they enthusiastically signed all the IP back over to me with a very encouraging nod to use it, however I want, to try and make this dream come true eventually.
So, when do you say “when?”
1. When you know that, with the tools at hand, you cannot get it done. You cannot count on raising more money, attracting new partners etc… If you can’t make it work, with what you have, it’s time to start thinking about calling it a day. (Kind of like any relationship, right? He’d be the perfect boyfriend if only he weren’t left-handed. But he is.)
2. When you start feeling “guilty” about asking people to work for less, or for free, and can see the stress of your passion impacting the lives of your team.
3. When you are facing financial liability for accrued expenses that someone – you and your board – is going to have to pay for. That’s like asking for another investment in something that you know is dying.
There are other factors. I was joking with someone on Saturday that it’s time to quit when you realize your second marriage – having lost your first one to the last startup – is on the rocks. When you’re a techie who’s afraid to check email. When you’re putting tequila in your morning latte. When the gym is where you hide because no one can reach you there.
We all fear failure. We’re entrepreneurs, we’re the MacGyver of the business world. Give me a contact, an hour and a mobile device and I’ll build you and industry. But here’s what I learned. Failing at a startup doesn’t define you. Most startups fail. An entrepreneur doesn’t quit. Sure, we all want to build the next Google, but realistically speaking, none of us are going to. It’s not about hitting it out of the park, or even about batting average. It’s that you keep playing the game, no matter what.
But hey, before we say good-bye, please do check out what I accomplished, because it was incredible.JUST CAUSE was the first all digital magazine with a huge national reach, and incredible editorial content that could have changed the world. I am enormously proud of it. The market just wasn’t ready.
Fortunately, I’m ready for the next one. I still have paper work to do to close up JUST CAUSE, but I’m so excited about the next one. Because I’m an entrepreneur, and I just can’t stop.
