October 2017
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Don’t Reinforce Failure

Throwing good money after bad may not be smart, but it sure is popular.

Everyone has a plan for where they want to go, but few think through what to do if they don’t get there. There is a difference between being tenacious and being stubborn – and it can be easier to identify than many think. Triggers based on clear goals and measures are an excellent start.

What are your triggers?

Start-ups are famous for burning through all of their money before achieving success. Knowing when to pull the plug is hard and many of them do it only after losing their entire investment. Almost all of them had plans, strategic objectives, budgets, and sales goals, but many somehow failed to know when to say when. Well-defined triggers can help and they can be surprisingly easy to set. Take your list of goals and ask yourself the simple question: “what if we do not meet the goal?”

What will you do if you miss your goals?

Far too many people react by trying harder. They may vary their approach, but often their response is simple repetition. It is an understandable emotional reaction. We invest a lot of ourselves in our work and our efforts often assume an emotional importance out of proportion to their actual reality. It can be hard to see the big picture if you are stuck in the weeds.

The important thing is to set triggers before you commit to the task – and decide what you will do if the trigger is tripped. What will you do if you burn through the budget without achieving a critical mass of customers? What will you do if your prototype does not serve a large enough audience? What if your concept costs too much to maintain?

Don’t reinforce failure

There are alternatives to just trying harder. Change your sales plan if it is not delivering enough customers. Accept a delay so you can modify and test your prototype before going into production. Simplify your concept if it is too complicated. Stop production temporarily if you have to, while you find new customers that can support the costs. Write a new business plan for more funding to take to your investors.

Finally, know when to walk away from a mistake instead of blindly doubling down on your bets. Building the right triggers into your plan can give you the insight you need – and if you do decide to wager, they will help ensure it is an informed decision.

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