Breaking Free from the Grip of the Sunk Cost Fallacy

My third SaaS is a failure. I invested $4500 in dev and too much of my time already, It made 12 sales for a grand total of $350 since its launch, 3 months ago. I’m sending qualified traffic, it just does not convert. The added value is probably not enough to pay.

The dev did a very bad job, the code is terrible, there were bugs I discovered later (this is the first and last project I’m doing with him).

So, although it’s an MVP, the service had issues, and I got complaints from the few customers who bought a package. At that point, I should have said, sorry guys, we’re shutting down, here’s your money back. What did I do instead? I put more of my time into correcting the bugs (I’m a dev myself).

At that point, I should have said, ok, the service is doing what is supposed to do now, it costs $10 of hosting per month plus the data I’m pulling from some API, let’s just leave it there, and not look at it again, as long as the conversions cover at least the costs.

However, this Saturday I got curious about looking at some of the Clarity recordings. I noticed that some of the users got confused landing on the dashboard after signing up, although it has exactly 4 buttons :’). I know from the very fact that they got confused that they wouldn’t convert even if I corrected what got them confused in the first place. But the drive was too strong. I decided to fix that. And sure, why not waste a bit more time while I was at it to improve the look & feel of the UI.

From a rational standpoint, this project should be a write-off. It was initially intended as an experiment, but my investment has far exceeded the initial plan. Yet, sunk cost is a powerful psychological trap. It kept pulling me back. It's a frustrating cycle that's challenging to break free from.