When to Kill Your Startup? A Framework That Works

Last week, during our monthly mastermind call at Indie Masterminds, a founder shared a common dilemma.

"I've spent a year building this product. Zero revenue. Meanwhile, I have this side project—35 paying customers showed up without any marketing. I think it's time to switch."

The numbers told the story:

Product A (The "Main" Project):

• 12 months of development
• Multiple pivots attempted
• Several beta users
• $0 revenue

Product B (The "Side" Project):

• Started January 2024
• Charged from day one
• 35+ paying customers
• $10/month per user
• 60% retention rate

The founder knew what to do. They just needed permission from peers who've been there.

The Sunk Cost Problem

This is the sunk cost fallacy: continuing to invest because of past investments, not future potential.

The startup world complicates this with survivor bias. We hear about Airbnb selling cereal boxes to survive. We don't hear about the thousands who should have quit sooner.

In our mastermind community, we've seen this pattern dozens of times. The discussion that followed helped crystallize a framework that actually works.

A Simple Framework

After working with dozens of founders, here's what actually predicts success:

Keep Going If:

1. Users love it but won't pay yet (clear pricing/positioning fix needed)
2. You're getting specific feedback ("add feature X and I'll buy")
3. You have unique technical advantage others can't copy
4. Revenue is growing, even slowly

Pivot If:

1. Users are polite but not pulling out credit cards
2. Feedback is vague ("interesting concept")
3. Something else you built has organic traction
4. You're building features nobody requested

The Side Project Advantage

Side projects often succeed because:

• No time for unnecessary features
• You charge immediately (validation)
• You build for yourself (clear use case)
• Less desperation (better decision making)

The mastermind member's "accident" was generating $10/month per user with customers requesting features they'd pay more for. The "main" project had users requesting features they might pay for.

See the difference?

The 5-Question Test

1. Revenue: Which one has paying customers?
2. Pull: Which has users asking for more?
3. Energy: Which gives you energy vs. drains it?
4. Growth: Which grows without pushing?
5. Clarity: Which can you explain in one sentence?

If you answered "Product B" to 3+ questions, you have your answer.

The Decision

By the end of our call, the founder decided. They're shutting down the year-old project and focusing on the one with traction.

The year wasn't wasted. It was $0 in revenue but thousands in education. Every failed feature taught what not to build. Every pivot revealed what markets don't want.

That's not failure. That's data.

Your Move

If you're sitting on a Product A while a Product B shows traction, consider:

• Market pull beats founder push
• Revenue beats potential
• 35 paying customers beats 350 free users
• One year of learning beats five years of hoping

Sometimes the brave move isn't to persist. It's to pivot toward what's already working.

Join our monthly mastermind calls at indiemasteminds.com where founders make decisions like these with peer support. Real numbers, real problems, real solutions.

Next call: First week of October 2024

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