The Blade

On March 14, 1994, Sports Illustrated published, “Bag It, Michael” about how the basketball star Michael Jordan should give up playing baseball after only 11 months. I wonder what questions Jordan asked himself before quitting baseball? Did he give up too soon? If he’d stuck with it, could he have become an All-Star? We’ll never know.

The most common question I get when speaking about startups is: How do you know when it’s time to quit? Well, the best answer depends upon your own situation. It’s a vastly important question, so here are six questions you should ask yourself before quitting:

1. Is your business the type you set out to build?
When starting out, were you trying to build a fast-growth company, a lifestyle company, or something in between? Because if you set out to build a high-growth business – and it’s pretty clear your idea isn’t going to become that – then perhaps you should give it up and try another idea. This approach is the basis for the term in Silicon Valley, “Fail fast, fail often.”

2. Can you financially afford to keep going?
After five years of living on very low income, cashing in your 401(k), living off scraps — at what point do you bail and get a paying job? This is often the most important question of all. The best answer may depend upon your life situation. For example, if you’re only supporting yourself, you can work on your startup for years while working in restaurants at night and earning just enough to get by. No harm, no foul. This is one reason I encourage young people to create businesses – because they can afford to do it. But if you’re trying to support a family, all bets are off. Only you can answer this complex question.

3. Can your product become a real business?
Some product ideas are good, but unfortunately, very few people are willing to pay for them. With other ideas, lots of people are willing to buy, but they won’t pay enough to cover the costs required to produce and service the product. After a few years, you should be able to understand whether or not you have a viable business or not.

4. Have you given your startup a true shot?
Too many founders go into their startups saying, “I’ll give it 18 months, and if by that time revenue hasn’t started multiplying or if I’m not earning the salary I desire, then I’ll cut my losses and quit.” That’s fine to make a calculated risk, but my research shows it often takes at least three years before revenue takes off in any meaningful way, so if you quit too early, you may miss out on something great.

5. Is the stress needed to “survive” the blade years worth the potential success?
The blade years is the stage when most founders give up on their business. They have paying customers, but not enough of them to pay the bills necessary to keep the business running and pay themselves an adequate salary, much less to invest into growing the business. They make a few tweaks – or even pivots – but those changes haven’t worked well, either. They try to raise capital, and that doesn’t work. So – after three to five years, they quit their business. I’m not saying that quitting during the blade years is necessarily a bad idea – it just depends upon your tolerance for risk and stress and whether or not you think you have a knack for building a company with the idea you have. But no startup is worth destroying your health and long-term happiness.

6. Is your personality more stubborn or more conservative and realistic?
I’ve heard so many stories, as probably you have, of the stubborn entrepreneur who refused to give up and eventually discovered phenomenal success. This story is indeed possible. If you’re stubborn and have this inner desire to “figure it out” – then by all means, press on! But if your personality is more accepting for things as they are, and you aren’t the type to try to beat the low odds – then go with your gut and try something else.

I wish I had a magic formula for how to answer the difficult question of when to quit – but I don’t. I’m leaving you with only questions. But I do believe that too many founders who quit their startups, do quit too soon. And, for the record, I wouldn’t have bet against Michael Jordan’s baseball career had he invested a few more years.