Sometimes You Need to Let Go of a Bad Idea
When you go into business, especially with a new or unique idea, how do you know when to persist and when to change course?
Editor's Note: In the new podcast Masters of Scale, LinkedIn co-founder and Greylock partner Reid Hoffman explores his philosophy on how to scale a business -- and at Entrepreneur.com, entrepreneurs are responding with their own ideas and experiences on our hub. This week, we're discussing Hoffman's theory: the most scalable ideas often seem laughable at first glance. Listen to this week's episode here.
We have often heard two widely accepted quotes that seem to contradict each other. The first describes a stonecutter who strikes the rock 100 times with no result, but on the 101st blow, sees the rock split. In short, it wasn't the 101st blow alone that split the stone, but the 100 that went before.
The message, therefore, is to persist. Stick to it even when you see no results.
The second quote is that often-heard definition of insanity -- continuing to do the same thing again and again and expecting different results. The message is that, if what you are doing isn't working, change what you are doing.
When you go into business, especially with a new or unique idea, how do you know if you are the stonecutter or just someone who's insane? The question the entrepreneur faces, therefore, is when to persist and when to change course. The answer of course depends on the circumstances. To be successful in business, or any other endeavor, you have to be willing to persist when times are tough.
Like the stonecutter, you have to be willing to continue working hard through patches where there are no visible results. At the same time, success also requires that you be willing to change course when the current path is not getting you where you want to go.
If you're that person who's not seeing the results desired, here are three situations where you should persist; otherwise, it's time to change course:
Too soon to quit. Have you given your current plan enough time to succeed? If not, keep working your plan. That doesn't mean that you can't make modifications and improvements as you learn, but don't give up before your plan has had time to succeed.
You know it works. Don't quit when you know that the thing you are doing will work. There are two ways you might know: First, in your personal experience, you have seen the plan you are currently executing succeed in the past. Consider the stonecutter again. Chances are, this isn't the first rock he ever split. He knows through experience that, if he persists, the stone will eventually yield.
So, if this is you and you don't have personal experience, you may know something works simply because you have seen others succeed. The first time the stonecutter split a rock, he had no personal experience upon which to draw. However, there was likely an experienced stonecutter guiding him who told him to just keep swinging; the rock would eventually break.
You have a clear line of sight to your plan working There are times when it's not too soon to quit and when the plan you are executing could have worked by now. You don't know from past experience that what you're trying will work, nor do you know of others who have succeeded this way. Yet what you do know is you are blazing a new trail. And, you have a clear line of sight to your plan working. When you explain your plan to unbiased third parties willing to be honest with you, they confirm your belief that the path you are on will lead to the success you seek.
In those instances, keep your nose to the grindstone.
Both of us speak from personal experience: In 2002, Polly quit her corporate job to start her first entrepreneurial venture. She wanted to sell compliance audits and services to small businesses. She could find no other businesses like this in the Richmond area and believed she would be providing a valuable service to smaller companies that couldn't afford to pay for a senior HR professional.
However, after only a couple of months, she realized her business plan had a fatal flaw. Small business owners didn't want to know that they were out of compliance with employment laws and regulations. There was a reason that no one else was in this business.
So, instead of continuing to bang her head against the wall, Polly switched her focus to providing training and development services. This was something she had learned that small business owners did want. This business proved successful. Her takeaways were, first, make sure that you have a viable product. Second, if you see no line of sight to your plan working and it isn't too soon to quit, change directions.
In 1998, Doug was working with a company that manufactured electronic sensors. He soon concluded that sensors were a commodity. For each type of sensor, there were several manufacturers and no real differences among the products. This gave him a brilliant idea.
Commodity products are sold on price. However, in this industry, there were manufacturer's representatives and distributors that added 20 percent to 30 percent to the final cost of the product. His company should cut out the middlemen who were adding no real value to the sale of the commodity -- and stop paying manufacturer's representatives and distributors to sell the product.
Instead, the company should sell the sensors direct to the customer online at prices well below the current offering price.
That's how Doug came to launch SensorsForLess and built a website www.sensorsforless.com. Ecommerce was cutting-edge stuff in 1998, and Doug was excited about the new venture. Unfortunately, what he hadn't taken into account was that his customers' engineers still specified the sensors by naming the manufacturer.
Given this, the products weren't as much of a commodity as Doug had thought. Engineers were not willing to specify "SensorsForLess." Not surprisingly, sales in the new venture were sluggish, to say the least; the business never got off the ground. After a year of trying, Doug realized that he didn't have line-of-site to build a successful business. He abandoned the effort.
Flash forward to our current company: Soon after launching this consulting business in 2009, we had a clear plan for how we were going to make it succeed. Yet, after three years of very hard work, we still weren't earning enough to pay our bills. We were still dipping into savings each month to make ends meet. Revenue had been more or less flat for two years. It was a discouraging time.
However, we did have a clear line of sight to success. While we weren't certain, we were confident that the path we were on would take us where we wanted to go.
We persevered. In our fourth year, the stone split. Revenue increased more than threefold. We were paying our bills from the proceeds of our business. We went from taking money out of savings to putting money into savings. We've now enjoyed more than four years with revenue at the new, higher levels.
Calvin Coolidge once said, "Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not: the world is full of educated derelicts. Persistence and determination alone are omnipotent."
Coolidge was right. Nevertheless, there comes a time when it is best to cut your losses and change direction. The tips above will help you decide whether to change course or persist.
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