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If it isn't going to work, just shut it down

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Re: If it isn't going to work, just shut it down

#71

Post by smachiz »

user3939382 wrote: post #48
nlh wrote: post #32

A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…

I burnt years of my life following advice like this when I was young and didn’t know better. If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance. There’s a selection bias in these stories you hear. Stories about people who gave it their all and failed aren’t popular.

Certainly true, but start ups pivot and find success all the time. Or redefine what success is if they're early enough and wind up in great lifestyle businesses that'll never be unicorns or deca unicorns or whatever.

I guess the moral of the story is really be sure that you are holding a losing hand, and that you can't play go fish instead of poker.

Re: If it isn't going to work, just shut it down

#72

Post by ZephyrBlu »

StriverGuy wrote: post #61

This was written by a VC who has no track record as an operator or founder. The only consistent advice I have ever gotten from the most financially successful people I know (many worth >$100MM) has been to never give up. Some of them took decades to get to even moderate success. The last decade has been an illusion of how quickly you can get rich starting a company. It can take years to see payoff and it is not alway…

Do you not see how their advice is tautological?

"never give up" coming from people who succeeded after decades of work.

It's obvious that a prerequisite for success is not giving up, but what about the people who didn't give up for decades and have nothing to show for it? I suppose they don't exist.

Re: If it isn't going to work, just shut it down

#73

Post by cryptonector »

analog31 wrote: post #22

Do investors have any evidence based reason to think a company has a better chance the second or third try, or a worse chance for that matter? Does past performance matter?

So, I would think that startups do have a better chance on first and second pivot. After all, by the time it's time to pivot, the startup will have more staff than when it started, the social relationships will be established, and the staff's skills understood. It's a huge advantage compared to the day the startup is founded.

> Does past performance matter?

If a startup is pivoting, that means that "past performance" is negative. Does it say anything about future performance? Maybe it says "they'll fail and fail and fail again", or maybe it says "they've learned some lessons and now are staffed appropriately for a pivot".

Investors have to put time in to understand what they might be investing in.

Re: If it isn't going to work, just shut it down

#74

Post by cryptonector »

yakshaving_jgt wrote: post #23
rossdavidh wrote: post #2

For those who (like me) didn't get the reference, the "Ship of Theseus" is a thought problem about whether, if every part of the ship has individually been replaced, it remains the Ship of Theseus. https://en.wikipedia.org/wiki/Ship_of_Theseus

Alternatively, Trigger's Broom. https://www.youtube.com/watch?v=LAh8HryVaeY

Or Lincoln's ax.

Re: If it isn't going to work, just shut it down

#75

Post by Dylan16807 »

jackweirdy wrote: post #8
rossdavidh wrote: post #2

For those who (like me) didn't get the reference, the "Ship of Theseus" is a thought problem about whether, if every part of the ship has individually been replaced, it remains the Ship of Theseus. https://en.wikipedia.org/wiki/Ship_of_Theseus

Is the ship of Theseus a single thought problem, or is it a different thought problem than when it was first thunk since all the present thinkers are different?

I know you're being flippant, but I don't know if you mean it, so I'll answer anyway:

It's the same thought problem, because thought problems don't have to be embodied in anyone and it hasn't significantly changed.

Also it's not the same actual thoughts across people, and basically never was.

So there's nothing in here that's been slowly replaced piece by piece. The paradox does not apply to itself.

Re: If it isn't going to work, just shut it down

#76

Post by spoonjim »

nlh wrote: post #32

A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…

I did the same, persevered, and threw away 11 years on a company I should have thrown in the rubbish after 1. The only thing that saved my career afterwards was family nepotism.

It's often investors who push the "never give up" thinking because those 11 years just come out of their LP's bank accounts, not out of bedtime stories with their kids.

Re: If it isn't going to work, just shut it down

#77

Post by dvt »

ncmncm wrote: post #68
dvt wrote: post #64

Earlier quoted context omitted.

> He is the world's biggest grifter I mean, this is a bit dramatic, don't you think? Or do you not know who Jordan Belfort and Bernie Madoff are? Apart from annoyingly trolling Twitter, I don't really think Musk's really done anything that terrible. Just seems like weird and reactionary "rich guy = bad" groupthink. I remember when everyone hated Bill Gates, but I guess now he's a humanitarian so it's totally cool.

Bill Gates, Bernie Madoff, and Jordan Belfort are smaller grifters, the latter two much smaller. (Gates, additionally, was tight with Jeffrey Epstein for decades, also a much smaller grifter.) Rich does not mean bad. Grift is bad. I think there is a difference. Or do you mean that nobody can be that rich without being a grifter? That might be true, but I don't think of Warren Buffet as one. Or even Jeff Bezos.

How did Bill Gates grift anyone? I think you have some sort of moral chip on your shoulder. People aren't perfect, and I don't know enough about Bezos or Buffet, but I'm sure they've done some shady things in their past.

But the reactionary response is just very odd. I'm too busy, worried about my own life, plans, goals, etc. to so vehemently hate some random billionaire who doesn't even know I exist. If it was personal, I'd understand, but it just seems to be part of a certain zeitgeist to hate on the guy, and everyone does it without question.

Re: If it isn't going to work, just shut it down

#78

Post by melony »

nlh wrote: post #32

A great quote sticks in my mind, shared with me by a founder who was going through hard times with his startup. The company was going through a bad spot, and one of his investors suggested just giving up and returning the existing capital to the investors. An advisor then said: "It's not their money anymore. Don't you dare give up." He didn't, he persevered, and the company had a fine outcome years later. I would not…

Survivor bias!

Re: If it isn't going to work, just shut it down

#79

Post by diplodocus1 »

ncmncm wrote: post #25
yrechtman wrote: post #18

Earlier quoted context omitted.

OP here. I think i mixed the message too much by putting pivots in the same category as founder transitions and down-rounds. Pivots are fine. But when you're basically just starting over on a completely new business with less money and a demoralized team, your likelihood of success is significantly impaired. Successful pivots need to carry ~something~ over of value

Yes. Letting them start over on something completely different is indulging sunk-cost fallacy. People were hired on the strength of being able to build X. If they are not who you would have picked to build Y, then getting them building Y anyway means you start out with a broken leg.

that's not really sunk cost fallacy? sunk cost fallacy in that case would be not pivoting when it's the best move looking forward, because you already spent so much time building and hiring for x (i.e. the sunk cost, which if not falling into the fallacy you should be ignoring for that decision)

Re: If it isn't going to work, just shut it down

#80

Post by 0x20cowboy »

anonymouse008 wrote: post #51
user3939382 wrote: post #48

Earlier quoted context omitted.

I burnt years of my life following advice like this when I was young and didn’t know better. If your formula is sufficiently wrong, which is the rule not the exception, you can’t make up for it with perseverance. There’s a selection bias in these stories you hear. Stories about people who gave it their all and failed aren’t popular.

What would you do differently? How do you know now that you were wasting your time? These moments make you more powerful than ever to be able to articulate why those precious (auto corrected but worked) times were not the myths you heard.

> How do you know now that you were wasting your time?

For me, this is very hard advice to give, and I usually equate it to running.

When you run, it often hurts after a while. There is a kind of hurt that you just need to push through, and then there is the kind of hurt that will cause bad or long term damage.

It’s sometime hard to know the difference. You can sometimes quit when you shouldn’t have, and you’ll probably cause an injury or two figuring out the other kind.

Over time you learn what “fake pain” and “real pain” are - in my experience - only after the fact and learning from the past.

This is bad advise so don’t follow it, but I’ve found quitting first, and then feeling horrible about yourself when you find out you shouldn’t have allows you to collect more data than pushing on something that will never work for X years.

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