The Entrepreneur Insider network is an online community where the most thoughtful and influential people in America’s startup scene contribute answers to timely questions about entrepreneurship and careers. Today’s answer to the question “How do you know it’s time to drop your startup idea?” is written by Suneera Madhani, founder and CEO of Fattmerchant.
When you’re really passionate about an idea, it’s easy to think that if you just keep working a little harder and investing a little more money, you’ll eventually catch your big break. And while passion can be what makes you successful, it can also be what burns you out and makes you broke.
Every entrepreneur starts his or her venture thinking he or she has the next great idea. But the harsh reality is that the startups that grow to be true successes are few and far between. It’s important for entrepreneurs to know that they might have to walk away—something many fail to accept, even when the signs are obvious that it’s time to drop the idea and move on.
When I first started Fattmerchant, I gave myself clear guidelines that allowed me to be sure I was never keeping the business going just because I was too close to see that it wasn’t working. I invested $30,000 into the business when I first started and promised myself that if that ran dry, I would walk away. Luckily, Fattmerchant started earning revenue and had a monthly recurring subscription income of $20,000 within just six months. Every dollar that went toward my company after my initial investment was made back by paying customers or raising funding, just as I had promised myself.
In addition to having a predetermined cap to the amount of money you’re willing to spend to get your startup off the ground, it’s important to have defined metrics that your startup must hit each month. Meeting these baseline objectives justifies the amount of time and capital you’ve invested into the company. But if you don’t meet them, that’s a sign that you might need to drop your idea. Having quantifiable benchmarks that you’re required to hit forces you to take your love for the idea out of the equation when deciding whether or not it’s time to walk away.
Although we were lucky, and the idea at the core of Fattmerchant proved to be successful early on, there were certain ideas within the business that we were forced to drop as we grew. For example, the main idea for Fattmerchant was to bring transparency and simplicity to the merchant services industry by offering unlimited credit card processing at direct cost. Our entire focus was on this new, disruptive business model, and our customers were processing on white-label products by default. But they quickly started asking us for a better payment platform that would allow them to process recurring transactions, invoices, and even split transactions.
We pride ourselves on customer service, but after months of searching, we still couldn’t find a platform that fit our customers’ needs. That’s when we knew we had to drop the idea that we were simply a merchant services provider and shift into the role of a payment technology company. Since then, we’ve created the Fattmerchant payment platform that does everything our customers were asking for. By being open to change and knowing when to drop certain ideas within the company, Fattmerchant has been able to grow and scale beyond what I could’ve ever imagined.
Throughout your startup journey, it’s critical that you involve people outside of your team. Whether it’s deciding on how much you’re willing to spend to get your idea off the ground or what achievable benchmarks will indicate that you’re doing something right, bringing in an outside perspective will help you to make strong, unbiased business decisions. By involving people who are willing to give you the cold, hard truth, you’ll always be sure you are sticking with ideas because they truly kick butt—not because you are blinded by love.
