When to kill your company

If I could tell every founder to watch one video, it would be this one…

No matter who you are or what you’ve accomplished, the decision to shut down a business is one of the hardest you will ever make as a founder.

It’s common to feel shame, disappointment, frustration, or even regret. It can feel impossible to know whether you’re making the right decision for your employees, your investors, and your customers.

But, Y Combinator’s Aaron Harris makes a very important point in this video: The “easiest” thing to do for a struggling company is to fall into zombie mode. In this state, the company isn’t growing, but it’s not truly dead, either.

He says that this is an easy decision specifically because it doesn’t really require an active decision. It simply requires the team to do the bare minimum to keep the company alive.

I had a similar experience as a founder when I eventually had to shut down RetailMLS. I built the business for over 4 years. And, to be completely honest, I probably should have shut it down a year sooner than I did.

There was always an excuse to keep pushing, to keep pitching investors, and to continue seeking new customers.

But, at some point, I needed to confront the signals that I was receiving from both customers and investors. It wasn’t the right time.

That’s one of the most difficult things about starting a company. It doesn’t matter if you have the right product at the wrong time. They’re the same thing, and you NEED both in order to be successful.

I think Aaron’s advice sums it up nicely: If we spent all of our time dwelling on the companies that failed, we wouldn’t have time for much else.