When to Fold 'Em
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When the going gets tough, it's often smart to quit. That's the philosophy of Seth Godin, the marketing guru and bestselling business author whose irreverent ideas have transformed how businesses think about marketing and change. His new, brief book, The Dip: A Little Book That Teaches You When to Quit (and When to Stick), discusses business slumps and how to power through them to greatness.
Entrepreneur: When they hit a trough, how can entrepreneurs tell if they should tough it out or quit?
Seth Godin: If you can't find a measure of your success, of whether you're closer to getting through the dip, you're probably doing the wrong project. For instance, if there's no sign of referral or repeat customers, you won't be better off a year from now.
I get a lot of e-mail from businesspeople who are stuck, and they fall into two camps: One is the guy in the supermarket who's always switching checkout lanes--every time he hits a dip, he abandons ship. The other has been working on the same thing for seven years and it's just not getting anywhere, but he doesn't stop. They're both just not hearing what's going on.
Entrepreneur: Why is it so important to kill off dead-end initiatives, even if they are bringing in some revenue?
Godin: Entrepreneurs don't have a lot of resources, so you can't stick with a product or venture that isn't going to pay off. Entrepreneurs cannot afford to be well-rounded. If you're running anything, from a restaurant to a consulting firm, it's best to be the best at one thing you do.
There's a place like this in San Francisco: Cafe Mozart. Nobody goes for the food. You go because it's the most charming place to get engaged. It is exceptional at one thing.
Being best in the world is worth more now than it's ever been before. When there are 2 million Google matches for a search, the number-one match gets 10,000 times as much traffic as number 40. The hard part is realizing what your exceptional thing is and switching to that.Entrepreneur: Are there some situations in business where you can avoid the dip altogether?
Godin: You should look forward to the dip. The dip is the best thing that could happen to you--if you can get through it, you win, because others will give up. You want to find the dip, and you want it to be pronounced. Whereas if you pick a business like specialty imprinted pens, there's no dip, no barrier to entry. So there's no win.