Knowing When To Shut Down

Most early-stage consumer brand P&Ls exist on the knife edge of survival. Most are losing money until a certain point up the Ramp. In my most recent episode of Startup Confidential, I share thoughts on a dark topic: knowing when to shut down.

I don’t know any founders that would advise a peer to shut down their business. Maybe if they were a brother or sister of the founder. Or a spouse. 

Look, telling another person to liquidate ‘their baby’ violates our ever-optimistic American business culture. It’s heresy, really. She needs to figure it out on her own. 

It’s a sensitive topic that should be addressed more often in public, even though most new founders have little appetite for listening to what I’m going to say. That hasn’t stopped me ever on this show.

A related, huge problem is that the media prefers happy tales of eight-figure ‘startups’ that got through the Death Funnel years ago. Advertisers prefer selling ads next to sunny, inspirational content. No one wants to advertise next to a litany of failures and explanations of the patterns behind them. Even when this would help hundreds of thousands of people avoid emotional and financial ruin. 

Ad people don’t like downers.

Shutting down a business you put your life into is no easy decision. But it happens every day in America. And I always maintain that it’s better to make these adverse life decisions intentionally, with a plan, than to have external forces do it for you. Suddenly. Please check out Episode 87 of Startup Confidential for all of my thoughts.

Dr. James Richardson

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