This is exactly what the whole lean start-up movement is about….

See work by Eric Ries and Steve Blank

This is a pivotal question for startups – Knowing when to quit! There is such a fine balance between failure and success. I believe its time to restart when customers and investors don’t believe in an idea any more. But most importantly customers.

The problem with ‘build a product’ business is that you don’t know the demand ahead of making the product (unlike consultancy services). So you look at the competition and try to find a gap between the competitors. But you don’t really know if in fact there is a gap in the market because customer demand is based on a time and a place offering. The market has changed since your competitors started.

Uncertainty abounds and there is no easy answer. I think you just have to be flexible around customer needs, differentiate against your competition and be prepared to change.

I thought and posted alot around this question:

http://nickpoint.co.uk/2009/06/17/knowing-when-to-quit-flogging-a-dead-startup/

http://nickpoint.co.uk/2009/08/04/learning-from-big-small-startups-successes/

http://nickpoint.co.uk/2009/07/21/learning-to-fail-startups-aren%E2%80%99t-really-trying-unless-their-failing/

Good luck with your learning and next startup idea

Best

Nick

Fabulous post.

I see too many startups (particularly in the mobile space) that look so similar (me-too) and I had thought that when I ‘seen’ your website before.

There is not enough realistic due-diligence when startups have an idea. SOME of those ideas can make sense in a local setting (e.g. Ireland) where their is a more geographic “distance” (can be cultural as well) and allows for more than one company (in a global sense) doing the ‘same’ type of thing.

The lack of “failure is good” in EU circles (IRL, UK etc..) is a complete culture problem that I think will take a new generation to solve.

The ‘learn from (startup) failures” is one the biggest plus’s I gain from living here in the US.

Brendan

http://thedreaminaction.com/2009/09/16/my-talk-on-startup-failure/

Great post & it’s good to see this sort of thing being more and more acceptable.

Cheers,
Ryan

Silicon Valley sees the biggest successes but it also sees the most and the biggest failures. Also, many of the most of the successful entrepreneurs have had earlier efforts that have failed. If we want to have lots of big successes in the UK then we have to have lots of failures (preferably early small ones) as well.

Enterprise Ireland has an excellent support programme for just this: the Feasability Study grant programme. But amazingly, and in line with your own observations about British attitudes to “failure”, if the Feasability Study shows that there is not a strong market for the product or service, Innovators are not eligible to apply for Feasability Grants on other Innovations.

What this culture of “anti-failure” results in is Innovators skewing their Feasability Study results to show that bad ideas will work. Taking on funding and driving forward with business plans that are doomed from the outset.

It’s no wonder the UK and Ireland have far lower returns on venture capital investments than in the US.

Worth reading for every start-up out there.

Erm… I think that’s a good thing!