In 2010 I left my stable job as a Market Manager for a multi-billion dollar staffing company to start an online media company. While working in my full-time position, I figured out that small businesses were looking for an affordable way to showcase their products and services using video. With my background in film and television production, I knew I could meet the demand, and quickly demonstrated that businesses would pay upwards of (brace yourself) $300 for me to produce a professional video for them!
At 35 years of age, having worked for 6+ years for my father’s company and other large corporations prior to that, I was anxious to get out on my own and make my own mark in something. Sensing the benefits would outweigh the risks, I decided to go “all in” on the video business, and tendered my resignation with my employer. I was off to the races.
Flash-forward ten months later. I’ve got my own office, my own business registered with the state, I even have a part-time employee. I’m making a little bit of money – not as much as I had been in my regular job, not even close, but I was in charge, I was calling the shots, I was doing what I wanted to do when I wanted, so I justified the temporary financial setback as a small price to pay for the luxury of self-employment.
And then, a funny thing happened.
It became painfully obvious to me that the economics of my business just didn’t make sense. The amount of time and effort we were putting in to the videos we were producing, even though the finished product was only 1-2 minutes long, simply didn’t justify the price we were charging. We had to schedule the video shoot, send out a videographer, get the raw footage from the videographer, edit it together, take feedback from the customer, do a second and sometimes third pass on the final cut, deliver it to them, wait to collect our money… all for $300.
I could have kept going. I could have gone from producing 50 videos a month to 1000, but the economies of scale wouldn’t have changed – if anything, they would have gotten worse (more overhead, more receivables to collect, etc.) So I made the difficult decision to fold the business, and with no other prospects in front of me, I went back into the workforce and was able to convince a software startup to hire me in a sales role (that’s the benefit of being a good sales person, there’s almost always a job out there for you.) And within a year, I was back out on my own, this time with a new business, a recruiting and staffing firm, an industry I knew I could make good money in, because I’d done it for many years while working for someone else. And the economics made sense.
About a year into running my recruiting business, I got an idea for a software product. I noticed that employers were becoming more interested in leveraging their employee networks for recruiting purposes, so I scoped out a proof-of-concept and hired a freelance developer to build it for me. Armed with my MVC (minimum viable product), I found my first customer – a fairly large company with thousands of employees who felt that my product could solve their problems around managing employee referrals.
We signed a contract and I was off and running.
Fast-forward to five years later. The original MVC had since been replaced by a shiny new code base, authored by my now co-founder, an experienced and very smart software engineer I had known for a few years. Five or six paying customers, a steady pipeline of leads coming in through our website, no pressure to do anything since we both had primary income streams outside of the software (my recruiting business and his full-time software engineering job).
Sounds like a pretty good deal, right?
My partner and I had countless conversations where we’d go over the same thing time and time again. So many leads, so many demos, so few customers. A low price point. Customer churn without much to replace what we’d lost. And while we were, for all intents and purposes “profitable”, the writing was on the wall: we were doing okay. And okay just wasn’t good enough for either of us.
The thing is, it’s easy to trick ourselves into thinking that modest success in anything is worth the effort. And it might be. But what if we’re absorbing our creative energy in something that does “okay” when that energy could otherwise be directed to something that does “great”? Is it worth the opportunity cost?
It all depends on what “it” is.
In his best-selling book “The Dip”, master marketer Seth Godin lays out his counter-intuitive philosophy that despite what we’ve been taught since a young age, quitting is actually a good thing, IF you quit the RIGHT things, at the RIGHT time, for the RIGHT reasons. Human beings have a tendency to want to stick something out, even when the writing is on the wall, because of the investment that has been made up until that point. It’s hard to “cut your losses” but perhaps we don’t do it often enough, and we tie ourselves up with something that is, for lack of a better term, a “dead end”, simply because we don’t want to admit defeat to ourselves.
And we wind up doing more damage than good.
Think about the job you wanted to quit for months but you stuck it out because you didn’t want to be a quitter. Or the employee you hired and realized wasn’t going to make it, but you kept going with them because you didn’t want to admit you’d made a bad hire. Or the stock you bought that keeps going down, but you still believe in the mission of the company and are convincing yourself its only a matter of time until things turn around, despite the fact that the company has had eight straight unprofitable quarters. Or the romantic relationship that you’ve ended, then started again, only to end and start again for the same reasons, over and over again. The formula is always the same.
We stay invested in things that are doing “okay” at the expense of redirecting that energy into things that could be “great”.
Admitting defeat, while it no doubt will sting at first, can be a very positive and productive thing, if you’re able to acknowledge what went wrong and why, and test any future endeavors against the same criteria. You’ll be hard pressed to find any success in the world that didn’t first pay the price of admission through failure. Very few things “just work” the first time out.
Recognizing that the path you’re is just okay, and not great, may be difficult to do, but it can also be incredible rewarding. You just have to have the guts to take action, and put faith in yourself that you can do better.
And you can. And you will.
But first, you have to give yourself the chance.