When is it time to call it a day?
Founders and self starters who have invested so much time in their business cling to it even when the returns aren't great. Important is they are not the only one's hurting
- Team is soon going out of jobs
- Partners will go unpaid
- Company will have staggering debts
- Might even have to liquidate their personal assets
- Burn through investor money
When should a maker decide that the creation is not what they hoped it would be
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Does your business have traction?
If you look at your numbers month-over-month, quarter-over-quarter, year-over-year... are you seeing growth? Particularly revenue growth (user growth is great, but if your business isn't being funded by VC that understands your business model, you're going to run out of money).
If growth is there (even modest), I would make the cuts needed now in order to survive to finally see the fruits of your labor? Growth is often compounding, but few stick around long enough to get there. Very often, they over hire or over spend early to try and force growth, before growth is ready to happen. This is especially true if you have investment money.
If you aren't seeing growth, and you have reached the end of your lifeline, then perhaps its time to walk away. Take what you learned and start over with these new lessons.
My first two startups, I spent too heavily and had expectations set too high on growth and shut them down before they should have been (they both would've been great business today). Both had growth, but my expectations didn't match. With my most recent venture, I've been much more cognizant about spend and modified my expectations. Now operating a cash-flow positive and can grow from profits instead of debt, which is a very nice place to be.
thanks @johnny_am I think you are correct about VC investment and rushing into growth. I have recently come out of same situation where my boss did the same thing and it cost all the team it's job and now using COVID - 19 as a cover.