Our society has a lot of negative attitudes towards people who quit. We have a tendency to see them as being the sort of people who couldn’t cut it. However, in many cases, quitting actually is the rational decision. People who get out of the stock market just in time are the ones who succeed just before a crash in some cases. Of course, in the stock market, the people who hold onto what they have for a long period of time are the ones who are going to eventually succeed in many cases, because the stock market usually eventually recovers. When it comes to venture capital, sometimes it really is wiser to jump ship.
If a startup is clearly failing, it’s time to jump ship. You don’t want the startup to pull you down with it. If you’re a venture capitalist, that is a very real possibility. You need to make sure that you’re able to recognize the signs of a startup that is just not going to make it.
Some of the signs involve a failure to really penetrate the market after a crucial period. If people are trying to make a startup work for years and years, it isn’t going to work. If it’s a tech startup or something of that nature, the market niche for it will have probably closed by that point anyway. It’s important for people to remember that timing really is everything when it comes to business in the modern world, and timing can work out badly.
There’s also the fact that internal conflicts really can sink startups, in some cases, before they even start. The people involved will tend to clash in many ways. Startups tend to be full of young entrepreneurs who have not yet been humbled by experience, and they have a tendency to think that their ideas are the best ones in an absolute sense. This is not true of everyone, of course. However, it is true of enough people that it’s important for venture capitalists to avoid ignoring the psychological aspects of a startup team.
Business is about trends and ideas. However, it is also about people. Business people have a tendency to focus on the trends and ideas at the expense of the individuals, and that is going to lead them to the point where they are ignoring some of the most important factors in whether or not a team succeeds or a business succeeds.