Know When To Fold Them, Know When To Give Up
On the start up front, one of the hardest things to determine is when it’s time to fold ’em. In 2000, a partner and I started a new question and answering service startup called AdviceTrader. Actually, we first called it SwapSmarts, but I was a little too difficult for people to understand and eventually morphed to AdviceTrader. You see I had always had this vision of the world where people could trade advice for other advice. I mean it seems like money is just an intermediary for a lot of things, right, and a market in advice might be a useful thing.
The way it worked was that I would give you advice on something and you would pay me in our virtual currency. Then after earning this virtual currency I could turn around and pay another adviser my virtual currency in order to get advice from him or her.
We started the company in 2000, took about a year to develop the software and launched in late 2001. Took forever to take off, we eventually had to go through a number of iterations first going from an advice site which was asynchronous to a site which could also contain live chat to a site that could also provide phone advice.
While we were doing this, a number of competitors were already cleaning our clock even though I have thought that this was a fairly new idea. It was very difficult to gain traction even in the world of the early to mid-2000s. Companies like keen.com, kasamba, were much better known than we were. I found that it was much more difficult to actually market and promote the company, to actually get mind sharing people’s heads and to actually develop software. But I digress.
More than likely this company probably lasted about a year or two longer than it should have. Bills were piling up, we were able to pay our advisers but not ourselves, and I think it took us a little too late to realize that it wasn’t going to be a success.
Right around that time as we seem to be losing money hand over fist, Yahoo Answers came out. We knew that that was the final straw: here was a free service providing similar advice, albeit from people who weren’t experts, but also coupled with a large company with a huge user base (at the time I think they had something like 300 million users) so when you take a concept like this and plug it into such a huge audience it pretty much guarantees success.
It’s very difficult to know exactly when to throw in the towel. As an entrepreneur, you keep thinking that if you keep on pushing and pushing and pushing, and you see all this advice out there saying that you should keep pushing and pushing and pushing, then eventually your startup will flourish. Eventually, it’ll catch on and fly.
I think one of the things that we have to do every day, is reassess. I think people continually, especially entrepreneurs who have such a passion, vision about their companies, don’t take enough time on a daily basis to even do a small reassessment of where they’re at. Are the revenues going in the right direction? Is the number of users going the right direction? If you have software being downloaded is the number of downloads going the right direction? Are you even getting off the ground? Are you meeting your plans at all?
Obviously, these are all judgment calls. But if we don’t take the time, at least once a day or once a week to reassess where we are at and what we are doing eventually you could be staring at an empty bank account and be wondering what the hell happened.
Postscript: As I was looking for an image for this post, I entered the term give up into Google images just to see what would happen. It took me forever to find anything and as a matter fact I didn’t find anything at all that actually says give up. They’re all, “never give up never give up never give up” this is our whole mentality.
I guess what I’m trying to say here is that there are times when you have to give up. There are times when you have to surrender. There are times when you have to say that’s enough. And it’s not like you’re running away. You just running away from something that’s not working. You need time to reassess, decompress and then run again toward something else, something else that’s working. So giving up is not necessarily a bad thing.