Why would anyone choose to speak on this topic? Quitting is not a popular word in the business language.
When I got an invitation to give a keynote speech at SaaStanak, I proposed 3 topics, and this one was one of them. I did hope they would choose one of the other two.
However, the SaaStanak team was intrigued and wanted this topic. Here is one more confirmation: If you have an idea, you have it for a reason.
Why this topic, and what gives me the credibility to tell you when to quit?
To nurture an innovation mindset, it is important to know when to quit, and there is nothing to be ashamed of. I know this because the whole first year of my Master's was focused on normalizing failure. Seeing and experiencing so many failures in my and my friends' skin helped me build four successful companies.
Here are a few words about me so you know why I am relevant to speak on the topic:
I am Senad Šantić, born in Mostar (Bosnia and Herzegovina) and moved to Gothenburg (Sweden) at the age of 4. At 13 years old, I am becoming fascinated with the possibility to write something and publish it so anyone can see it.
My first website - about the top 100 basketball scores crashed servers thanks to huge traffic. Since I didn’t become a professional basketball player, I switched my focus to engineering and enrolled at Chalmers University of Technology, where I witnessed the birth of Spotify. When you see such examples so close to you, it is easier to start your entrepreneurship journey. My primary role today is CEO of ZenDev - a software development and digital marketing agency. Other companies I founded are: Loop Me, Foboko, Avidnote, Robinize, Mendy.
Before we dive into questions to ask when deciding on the future of your startup, let’s unpack the characteristics of startups and get insights into why 9 out of 10 startups fail.
Characteristics of Startups:
In the famous book The Lean Startup by Eric Ries, the startup is defined as: “a human institution designed to create a new product or service under conditions of extreme uncertainty."
From the definition, we can see 2 main characteristics:
Innovation: A startup is testing hypotheses that haven’t been tried before—sufficiently new technologies, products, services, or markets.
Potential: A startup has the potential to grow exponentially rather than linearly.
It is scalable. This usually happens because of leveraging technology.
A startup is, in essence, a business experiment with potential. This means that startups are prone to failure by definition because of uncertainty—many unknowns.
Why do startups fail?
Two primary reasons why startups fail are:
Marketing Problems (56%)
Marketing mistakes are the leading cause of startup failures, with the biggest issue being the lack of product-market fit. This means that the product or service doesn't meet the needs or wants of the target market.
To avoid this pitfall:
- Don’t invest a lot of time and resources before you are confident people want what you are offering.
- Validate your assumptions quickly and cheaply, and if needed - pivot.
Team Problems (18%)
Team problems include:
- Lack of Domain Knowledge: for example, if you are building a startup in the SEO domain, having an SEO expert on the team is a must.
- Lack of Marketing Knowledge and Plan: Without a solid understanding of marketing and a well-structured plan, reaching potential customers is almost impossible.
- Lack of Technical Knowledge: This one is pretty self-explanatory: if you are building a tech startup, you need to have technical knowledge or a technical partner.
- Lack of Business Knowledge: A successful startup requires knowledge of various business aspects such as finance, operations, and strategy.
Other common but less deadly team problems include:
- friction among co-founders
- lack of motivation
- lack of availability
Questions to ask yourself when deciding will you quit your SaaS?
The difference between: "I'm glad I didn't quit" and "I wish I had quit earlier" is a thin line.
It took me 14 years in product development to define questions that helped me decide about the future of my startup (company).
And the questions you need to ask yourself are:
Has the timing passed our project?
Has our team (if there is one) given up?
Have we tried pivoting on the business model?
How much more are we willing to work without pay?
Is this the right team?
Ultimately...
Set a hard deadline with clear milestones.
One way to improve your chances of success is to adopt a build-measure-learn cycle. I covered this topic in depth in another blog and explained our - ZenDevs approach to building MVPs.
Hope this helps; fail a lot and quit when needed.
