In a young company, things can go terribly wrong all the time. Staying on course in the face of even greatest setbacks is an important character trait for a young company and its leadership. It verges between stubbornness, arrogance or loss of sense of reality and it must. When you work toward a future statement the wind blows straight in your face. In fact, if it didn’t I would be surprised. This article is not to dispute the fact that you need to stay course, have the backbone to withstand heavy resistance. Enough has been written about that and it should be clear by now to everyone who gets into start up ventures. This article is to help you with the opposite issue: When do you call it a day?
Churchill famously said to
“Never, ever ever ever ever give up”
That is four times “ever”.
It is one essential feature of a founder to not give up despite dire setbacks. However, Churchill’s circumstances were so different and business is not world war that it does not apply to you. So how do you know when enough is enough? When is it time to cut your losses and go home?
I think the answer lies in one of the best ads I have ever seen:
Knowing the exit point is to identify what you would under normal circumstances not want to do, before you get to it. That is, thinking about the things and experiences you’d never 4x ever want to do or endure, writing them down and when you may get to that very point, you then know it’s time to pull the plug. These things and experiences represent the boiling water you’d not want to be in. They are your exit points.
Personally, I have come to state as clearly as I can, exactly what the exit point is before I am getting into something new. You can do that vice-versa and when you do not reach your desired future statement, call it a day. However, I prefer the former as it leaves no room for interpretation of what to endure and do along the way and what not.
Hang on, is defining exit points beforehand not already half way quitting?
No! Start ups are a whole different animal. It’s self protection. When you are in a young venture and the sea is getting rough your judgement will be clouded. You’ll not as easily leave your own work that you put so much effort into, your colleagues you fought the hard uphill battle with or the vision you so dearly want to be true. No matter how close to or even beyond a burn-out you are. You risk losing what is important to you such as friends, your partner, your money…your health. You risk loosing things you cannot easily recover. The trade off is just not balanced. If your exit point goes beyond loosing all this, then you’ll be safe to continue. But if it isn’t and I believe that is true for the majority of people, you’ll regret a lot and you’ll regret too late. So, no: It’s not half way quitting. To me it’s a necessary measure of protection. In fact: All else is hazardous and naive. On the contrary, it has even two upsides:
- With exit points in place you can without a doubt throw yourself into the venture. Your “seat belt” is on. You are good to go!
- You have a finite time here on earth. Even if loosing health, friends and family or your loved one does not matter to you, see it from this angle: You are loosing time! Burning time on a lost case is reducing your time stock for being a success on the next one.
I have been past my exit points multiple times and I am grateful for friends and family who warned me and stuck with me. I scratched loosing important things more than once for which I today define my exit points in advance.
HOW do you define these exit points?
Quantify as much as you can (see my article on measuring things that are hard to quantify) and leave little room to interpretation. Similar to the exercise “write a future statement“, write an antidote to it at which you’re going to exit.
Note: Make it exactly the scenario you’ll exit. Do not (!) make it a warning signal, but very specifically the exit scenario. The case in point when you instantly quit.
As an advice, I would share this with your boss(es) as you’re then upfront with the fact that your health, life knows its limits. That is not always obvious to all bosses or founders. This is not a must, but my personal advice.
Now, exercise a few exit points and quantify the “unquantifiable”:
Usually exit points are hard to nail down as they involve things that do not lend themselves to easily be measurable. The following is a list of examples to help you jump start your own one:
- looking into the mirror three times a month regretting having gotten up because of work
- going to bed with an angry feeling because of work more than twice a month
Work life balance:
- +55-hour weeks happen only 4 times a year
- I will always be able to understand every (that is 100%) of insider jokes of my circle of friends because I spent enough time with them.
Time & achievements:
- 24 months after launch…
- 2 years from today…
- Revenue has to be in excess of 10m EUR after 24 months
- I want to sell the company within 36 months after launch
- Every three months I want to be able to explain three exciting things about my work which I learned there to my family, friends. They decide if it is exciting.
- I want to manage 8 people
Continue the list onward on your own.
Save this list, print it out and keep it on your desk visible to you. Look at it monthly or per quarter. You will be surprised how fast you can be in boiling water.
Keep that list right next to your future statement (see my article on Future Statement).