Entrepreneurs are probably one of the most 'advised' groups out there. There's oodles of advice on how/why/when one should start a company and how to keep it going (though the going gets tough on that one). But presumably entrepreneurs need to be told how to know when to pack it in because there's advice out there on that topic too.
Recently I read a much-commented guest post by Mike Troiano on the OnStartup blog, titled 'Be Captain of Your Destiny, Not Prisoner of Wishful Thinking', which listed five indicators which should convince an entrepreneur that it is time to admit that his idea doesn't work and exit. While those criteria are worthy of consideration, I do believe that a true entrepreneur is not in the game because of a single idea, but because of a vision. And if one idea doesn't work, it is highly likely she'd adapt and make it something else. If you read the post, make sure you read the comments, especially the one by 'V' which I think is more in line with those of an entrepreneur who doesn't 'roll over and die' quite that easily.
In my view entrepreneurs have one sure-fire sign that it's time to move on - when the money runs out. As long as there's money, and, even more importantly, as long as there are customers, the entrepreneur is still in the game. An example of this tenacity is a friend of mine who's helping her husband in his startup. The idea is his, but they're partnering on the effort, especially in taking turns bringing in income, and they've been working at it for quite a while. They'd run into various roadblocks, including the 'great' recession, and every time they reached out to customer prospects, or pitched to investors, they learned things that got them to re-tool their product and adjust their market position, and they've done this multiple times. After many months, I got to meet with my friend a couple of days ago when she told me that they're in launch now. The product looks promising and their prospects are exciting. This appears to be the real deal.
One of my early posts was about a VC wondering when to hold on to a company, and in my view, it was when you could see the founder/entrepreneur still engaged and still passionate about making it happen - it was 'know when to hold' without being hung up on the 'know when to fold'. Entrepreneurs who have a vision about a problem that needs solving, are willing to change their ideas on how to solve it, but don't give up on the vision, unless it is something they didn't care for that much in the first place. Someone who's an entrepreneur by conviction, not an entrepreneur by convenience, would rather detour than exit if at all possible.
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