Insight From Dropbox: Failure Is Not The Worst Outcome, Mediocrity Is

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Insight From Dropbox: Failure Is Not The Worst Outcome, Mediocrity Is

 

Big news from Dropbox today.  They announced hitting 25 million users.

I'm a big, big fan of Drew Houston (founder/CEO of Dropbox).  Have known him for many years (well before he started Dropbox) and am honored to call him a friend.  I will cancel plans with my wife to hang out with Drew if he and I happen to be in the same city.  There are only a few people I'd do that for.  (Plus, it helps that she loves the product).Dropbox Logo for OnStartups

Disclosure:  Drew is on the advisory board for my company, HubSpot.

There's one big lesson and insight I want to draw out from Drew and Dropbox's story.

The worst outcome for a startup is not failure — its mediocrity.  When I first met Drew, he was still working for a local Boston-area software company called Bit9 (in the security space, and they're still around).  Good company.  Drew was in the midst of working on a startup idea that was in the SAT prep space (called “Accolade” if my memory serves me right).  I met with Drew for dinner to talk about Accolade and his plans for it.  I was not a big fan of the idea (and told him so).  Super-competitive category, and it was going to be hard to differentiate.  Most importantly though, I was not sure how big of an opportunity it was.  I just didn't see it being a big, “break-out” business.  Frankly, at the time, I could tell that Drew was really smart — but I didn't have enough data to know if he was going to be great (as in a great entrepreneur).  I know many, many really smart people.  Few of them have what it takes to be great entrepreneurs.  As it turns out, Drew is one of those people, but I didn't know it at the time.

So, Drew ultimately ended up abandoning the SAT prep idea to do something different (which later became Dropbox).

Here's the big lesson:  Many founders think that the worst outcome you can have in a startup is failure.  You try something and it fails.  And yes, failing sucks.  But, what's worse than failing is going sideways for years and years.  Being stuck in a quagmire of mediocrity.  Things are going reasonably well, but not spectacularly well.  The reason mediocrity sucks more than failure is very simple:  Failure lets you move on, mediocrity stalls you and keeps you from reaching your potential

It's not knowable as to whether Accolade (Drew's SAT prep startup) would have been a phenomenal success or not.  But, it's doubtful that it had near the potential that Dropbox did.  Had Drew “stuck to it” with Accolade, it's likely that Dropbox would have never happened and 25 million people (including me and my wife) would have been less happy.  And, of course, Drew would have been worse off for it.  As he will tell you, Dropbox has been super-fun and super-gratifying.  We all dream to have a startup like that someday.

It would have been a waste of talent and energy for Drew to have gotten stuck in a quagmire of mediocrity. 

Imagine if all the founders that are currently stuck in “sideways” startups could somehow pull themselves out of the muck, clean themselves off, and take another crack at becoming legendary.  How much better off would they and the world be?

Of course, there's one big counter-argument to all of this.  How do you know whether you're stuck in a quagmire?  Isn't startup success often about persistence and focus?  What if that break-out success is just around the corner.  Those are good questions.  The simple answer is:  There are no simple answers.  If it were me, the question I would ponder is this:  If 90% of everything started going “right” with your startup, what will it become?  (I'll call this the “wave the magic wand”, best-case scenario).  If the answer does not please you, and you've been at your current idea a reasonably long time, I'd ponder a change. 

One of the great things about software startups today is that it's very possible to reach “ramen profitability”.  That's also one of the bad things.  Once you get to “ramen profitability”, running out of cash is no longer a way to know that you should be starting afresh and trying something new.  You can run a startup like that indefinitely — and many entrepreneurs will do just that, instead of building the next Dropbox and becoming legendary.

Update:  The article has sparked a lot of interesting discussion on Hacker News and elsewhere.  One point I'd like to clarify:  I'm not suggesting that stable, sustainable businesses with modest growth are a bad thing.  Just that if the business is not something the founder is passionate about -- she should move on.  Life is short.  We don't all need to build the next Dropbox -- but we all should stretch ourselves.  It reminds me of an idea that Tim O'Reilly planted in my head:  Pursue something so important that even if you fail, the world is better off with you having tried.   

What do you think?  Are you stuck in a quagmire of mediocrity?  Should you be hitting the reset button and taking your shot at becoming legendary?

Posted by Dharmesh Shah on Mon, Apr 18, 2011

COMMENTS

Good points. Does Dropbox make money?

posted on Monday, April 18, 2011 at 10:25 AM by Sal Pellettieri


Yes failure helps you move on, but at the same time mediocrity isn't bad either. One can sell a mediocre Company and move on. I consider that a success. I sold my mediocre consulting business to a marketing firm a few states over and never looked back. It wasn't for much but I used the money for my new start up.

posted on Monday, April 18, 2011 at 10:29 AM by Pavan


I absolutely agree. There is nothing worse than being in a zombie company. Startups are to make it big and change things.

posted on Monday, April 18, 2011 at 10:30 AM by domingo


I found this post to be rather curious because I thought DropBox was already stuck in mediocrity. My peers and I certainly don't trust it not to corrupt our files somehow, as has happened on a few occasions. For important transfers (which includes pretty much anything these days) I stick with pendrives, even email, anything but DropBox. But I guess you get what you pay for.

posted on Monday, April 18, 2011 at 11:17 AM by Alice Young


I completely agree, I have personal experience of this. 
 
After graduating, I chose to create a startup right away as I knew that was what I wanted to be doing. I spent 1.5 years working on it and whilst some people loved it, many just used it once and didn't come back. It was something core that meant this was happening, and it was hard to see it happen. I continued for a full 1.5 years before I thought I would try another idea on the side. Luckily, this idea is really taking off and gaining good traction now. 
 
It is easy to read this and agree, but when you're in the midst of a startup which people don't feel strongly about (love OR hate), it is so easy to continue working on it forever. It's worth reflecting on things like this every so often.

posted on Monday, April 18, 2011 at 11:19 AM by Joel Gascoigne


Re Alice Young's comment: 
 
My peers and I certainly don't trust it not to corrupt our files somehow, as has happened on a few occasions. 
 
Have you contacted Dropbox about this? I have had nothing but good results with Dropbox so far but nobody's perfect. I would think they would want to address the problem if made aware of it.

posted on Monday, April 18, 2011 at 11:34 AM by Stacy


Sounds like a page right out of "Good to Great" - great post.

posted on Monday, April 18, 2011 at 11:35 AM by David


"But, what's worse than failing is going sideways for years and years. Being stuck in a quagmire of mediocrity. Things are going reasonably well, but not spectacularly well."  
 
It sounds like you are equating mediocrity with a business that is sustainable but that does not have the upside to be a category killer. But some entrepreneurs (myself included) are more interested in making profitable businesses that have a sound business model from the start, that can support myself and a team, rather than go after the usual huge upside huge downside dreams that so many chase. 
 
And it's unlikely that those years spent going "sideways" were wasted as you presumably have customers, have opportunities, have decisions to make, and lessons to learn.  
 
We can't all create category killers, but we all need to make a living. So I think it's importance to recognize that if your personal goal is a 6 figure income with a business you created and a team you chose, and you have succeeded in that, it's not a failure.

posted on Monday, April 18, 2011 at 11:43 AM by Jeremy Smith


Good post--Fast fail to succeed ! 
 
Only if promoters have enough understanding that their start up is running sideways. There should be periodic evaluation with even this parameter if mediocrity is looming large. Failing products in start up is not a failure as they give birth to new ideas and new products. However, blurring the vision of the direction in which company is moving is the real problem.

posted on Monday, April 18, 2011 at 12:20 PM by Bharat Lohani


Disagree with the notion about mediocrity. Had that been the case, Google wouldn't have been #1 and Facebook wouldn't have been #1. I understand there were fewer competitors but they had millions of users using competing services. At the end of the day innovation decides if you will make it or not.  
 
Maybe if Accolade had launched, it would have innovated as it went along, as is the case in many tech and non-tech businesses.

posted on Monday, April 18, 2011 at 12:29 PM by K Patel


True, although mediocrity for an entrepreneur like Drew could be taking a "respectable" job at a successful company. That was the mistake I made after I lost the code for a dropbox-like system in 2002. Instead of starting over from scratch, I took a job at one of the few profitable Internet companies (Expedia.com) because I thought I'd learn more from working at a profitable Internet company than one searching for a business model. That turned out to be exactly wrong. 
 
Loyalty and persistence are flaws when they make you stick to a bad idea with diminishing marginal returns. Great advice on how to tell when to move on. 
 

posted on Monday, April 18, 2011 at 12:36 PM by Eric Kennedy


"Had Drew “stuck to it” with Accolade, it's likely that Dropbox would have never happened and 25 million people (including me and my wife) would have been less happy." 
 
If he hadn't started dropbox, at some point someone else would have. It's the same as anything; it's just a matter of time before someone else came up with the idea.

posted on Monday, April 18, 2011 at 12:50 PM by user123


I'm going to have to second the commenters that don't equate a sustainable, if not exactly a household name, business to mediocrity. I'd put it more under the "lifestyle business" heading, there is real value to providing jobs to your employees and bettering the lives of your customers.

posted on Monday, April 18, 2011 at 2:10 PM by Justin


This is a nice, thought-provoking article. IMHO though it does not substantially advance the main question of 'how much progress' is good enough :-( Deciding this in general is not any easier than the general problem of hill climbing in mathematics. It would be very helpful if we could understand the 'being on a plateau' effect enough to be able to detect it with reasonable accuracy. Maybe your 'wave of the magic wand' is one way to go about it. But it seems as arbitrary as the first thing I would come up with (hmm... "are you enjoying building and distributing your product?"). 
 
There are equally abundant examples of startups that went flat, stayed flat, then took a bit of a dip, then became a Google. And why not - there are no mathematical rules that contradict that possibility. 
 
z

posted on Monday, April 18, 2011 at 2:11 PM by Zach Wilson


Fail fast, fail cheap! That's what it's all about. Failing teaches you lessons, when mediocrity doesn't teach much at all.

posted on Monday, April 18, 2011 at 2:50 PM by Allison Way


Dropbox is a very inspiration company and have had very impressive growth and we @ spideroak.com wish then all the luck in their future endeavors!

posted on Monday, April 18, 2011 at 2:52 PM by Daniel @ SpiderOak


Not sure about your premise. Sometimes people need to continue on to survive and start a new company.

posted on Monday, April 18, 2011 at 4:40 PM by Shane


@Jeremy Smith: Apologies if I implied that a business that is sustainable is not a good thing -- it is.  
 
I have a personal story (which I should write about sometime). I had a business that was doing well, which I headed-up for 10 years. I had the option to sell for several years (which I didn't take), but probably should have. 
 
There's nothing wrong with having a solid, stable, sustainable business. Those businesses make the world go round. What I advise people to avoid is working on a business that you are no longer passionate about simply because "it's a living". Or, if there's an artificial constraint on what you can make from it. Life is short. Not all of us need to create the next Dropbox. But, it's important to stretch ourselves.

posted on Monday, April 18, 2011 at 4:40 PM by Dharmesh Shah


I understand the points and some are valid, but couldn't the argument be made that riding that quagmire of mediocrity is still a form of success (after all most start up's fail).

posted on Monday, April 18, 2011 at 4:48 PM by Dan


Alice's comments are off point to me. I've never had a file corrupted, lost, or otherwise compromised by Dropbox, and I've been using them for two years now. If you're an Apple user, Dropbox and affiliated products/services are a vital method of sharing b/t iPad, airbook and powermac.

posted on Monday, April 18, 2011 at 5:06 PM by Todd


I just finished "The Dip" by Seth Godin and Drew demonstrates the book's core message; Quit and quit often. If you are stuck in mediocrity, your wasting resources that you could be applying towards something remarkable.  
Define a successful outcome before you start. If you don't meet that outcome in the prescribed time, then quit and move on.

posted on Monday, April 18, 2011 at 5:11 PM by Rob Mathewson


Dharmesh, 
 
 
 
Great post sir. I couldn't agree more. It's like failing and the fear of failing. Someone above mentioned "I thought Dropbox was already in a quagmire of mediocrity." You'll always find nay-sayers in just about everything. Rise above it please and continue to post LEGENDARY stuff!

posted on Monday, April 18, 2011 at 5:15 PM by Joe Napoli


Good article. Did you ever fail at a startup? Deric @www.UtahKernels.com

posted on Monday, April 18, 2011 at 5:30 PM by Deric Glissmeyer


I would argue that many of us forge onward to learn and we're not ready for the next idea yet.

posted on Monday, April 18, 2011 at 5:40 PM by David Cornelson


I feel like people are inferring a definition of mediocrity that was not necessarily intended by the author; that being said, I do think a better definition of what you mean by 'mediocrity' in this context would be useful to the discussion. 
 
Does mediocrity mean 'eventual failure', long-term profitability but not enough to do anything better or greater with the company, or something else? 
 
I do agree with many of the commenters who rightly counter that building a sustainable business that supports one's self, family and team is quite an accomplishment in and of itself. 
 
I think it's reasonable to say that some majority of humanity will never achieve 'greatness' in any sense of the word, and that's how it will always be - if every one were great, that level of greatness would become normal and the bar of greatness would be raised. It's simply natures way to have a stratification of skill and ability. 
 
I think the article confuses a few topics, namely what makes one happy and what one is passionate about, versus business viability and profitability.  
 
But buried in there somewhere is definitely a useful thought :)

posted on Monday, April 18, 2011 at 6:01 PM by Philip Segal


I consult with mostly startups and generally only get compensated off the come line via stock options or similar so I have to weigh out my time a bit shorter than if I were compensated with some form of ongoing payment. Since my time is limited I have to be hyper-vigilant that I am not spinning my wheels on one startup or not. I personally have three benchmarks set where I evaluate my continued involvement and they are at 6 mo, 1 yr and 18 mo. If by those those benchmarks I don't see strong potential for rapid growth I drop them like a hot rock and move on. 
 
This may seem overly conservative but when you're on the come line you need to know when to fish or cut bait.

posted on Monday, April 18, 2011 at 6:05 PM by Stephen G. Barr, Group Publisher


This article is so apt for me right now. I started my business 7 months ago and am constantly questioning whether it is going to be a success. I love the quesiton If 90% of everything started going “right” with your startup, what will it become? For me, it will be amazing for me and my clients. That simple question has motivated me to keep pushing forward. thanks

posted on Monday, April 18, 2011 at 6:08 PM by Linda Delamotte


Avoiding mediocrity is my driving force in life.  
 
The point here as I see it is 'be all you can be' - no more or less.  
 
If you get to a certainly point and can't make the magic you're capable of then exit. Someone else at a different stage or with different qualities can do what -for you - is mediocre.

posted on Monday, April 18, 2011 at 7:11 PM by Julian Waters


Great article. You make a great point that failure lets you move on. I have a whole chapter on my book on why failure is a good thing! 
 
Oli Hille 
Author 
"Creating the Perfect Lifestyle" 
www.LifestyleBook.com

posted on Monday, April 18, 2011 at 7:24 PM by Oli HIlle


If you find yourself with a company that has reached it's potential, Sell it or find a manager to take over. 
 
Build something you are proud to bring into the world, Then repeat. 
 

posted on Monday, April 18, 2011 at 8:27 PM by Emerson Bone


I have to expand my response. My start-up is four years old and although not anywhere near a success, I feel its continued effort is worthwhile, not just for myself, but for my intended audience. I often think I started it too early and waiting for the tablet market to wake up might have been more timely. But I also believe that I'm trying to create a business, not wealth. Many people in the entreprenurial world are in it for the cashout and I get that, but I'm in it to create something. Sometimes, creating something takes time. There are a lot of businesses that took years before they became something "special". 
 
 
 
I actually do have my next start-up almost entirely planned, but I'm not ready to focus on it until I've gotten to the watershed moment in the current one. 
 
 
 
I also think trudging along in any start-up teaches daily lessons. No matter what, if you're doing a start-up, you're learning every day.

posted on Monday, April 18, 2011 at 8:55 PM by David Cornelson


Its very easy to judge things after the fact. When you are in middle of it - you are not sure if you are stuck in a mediocre venture or a venture that is just about to break out.  
 
A mediocre venture might turn out to be the multi-bagger either by - change in market conditions, the brilliant idea that you just thought of today, change in strategy or just pure luck! 
 
So I would try and fix it - move around the corners to a different space rather than just abandoning the project and moving to a new one. 
 

posted on Monday, April 18, 2011 at 9:36 PM by Sridhar


If the "mediocre" startups drop the box and move on then there would be no one willing to try ever a startup product.

posted on Monday, April 18, 2011 at 9:40 PM by R. Rama Raju


Yes, it is true that there is no point in dragging a startup which has been performing with mediocrity for a long time. But if it is a business that the entrepreneur is passionate about, then he must run it. Actually if the founders are passionate about the business, usually they will perform better than just mediocrity. The point is that the entrepreneur must be satisfied. Good enough never is and it should be upto the entrepreneurs to take a call whether they would like to get out or carry on with their startups which might be performing with mediocrity. They Still not every one can be a legendary startups. But that must not discourage people from becoming entrepreneurs. For you must remember "Good Enough Never Is". Read my article 
http://mridulavelagapudi.blogspot.com/2011/03/good-enough-never-is.html 
 
 

posted on Monday, April 18, 2011 at 10:11 PM by Mridula Velagapudi


Dharmesh, 
 
While I definitely agree in general there's a huge caveat you do your readers a disservice by not pointing out. Mediocrity is NOT worse than failing if you fail with a large amount of debt AND personal guarantees. (Sadly, I know all too well from personal experience. And those experiences have made me a lot better entrepreneur this time around. But not without huge cost.) 
 
My simple point? Avoid personal guarantees and personal debt at (almost) all cost. Only THEN is failure better then mediocrity. 
 
-Mike

posted on Monday, April 18, 2011 at 11:10 PM by Mike Schinkel


Great article, Dharmesh. The people passionately pursuing their dreams can change the world! 
Recently, I came across the thoughts of Taleb (of Fooled by Randomness, The Blackswan) on Heroes. The heroes are regarded so not because of the successes or failures, but they pursued something worthwhile for the larger good heroically! 
We need heroes in the start-ups to pursue something great for the world. 
Excellence is every thing, if success follows, that would be the icing on the cake!

posted on Tuesday, April 19, 2011 at 2:03 AM by Girish B Hukkeri


Awesome article.

posted on Tuesday, April 19, 2011 at 3:13 AM by Michel Pinard


I often evangelize this same thing to all my peers who have or are planning to startup. But in my opinion more than the idea the guy behind is important, I mean we can safely take your example, the way you do marketing you could have done well with anything in world (compliment). 
 
Anyway, when starting up give your 100% (not a cliché) you see when you aren't focusing completely you feel (in retrospect) that something lacked last time and the entrepreneurship dream becomes sort of a gambling habit and you keep coming back to it. 
 
Ayush 
Founder, FilmiTadka.

posted on Tuesday, April 19, 2011 at 3:35 AM by Ayush Agrawal


Hi, 
If Some one is doing what he loves and is passionate about it and ultimately making money (whatever the amount) thus enjoying every moment of the business life, who cares how much successful the person is. In fact He is already successful. 
 
The other things might fall in place automatically. 
 
Regards,

posted on Tuesday, April 19, 2011 at 4:09 AM by vijay viragi


I agree with all those who disagreed with the perhaps unintended usage and definition of the word mediocrity. BUT a very good message for startups. I believe we should not or push every entrepreneur to expect every business start up to become a "killer app" or else to be abandoned. While working mainly for small business or individual entrepreneurs and specially those who always have resource constraints; these guys are in the majority and those who get super success are the extreme minority. Sure one wants to emulate them but they cannot be everyone's benchmark. We look up to them but trying to emulate them is overkill. In my 35 years the reality is that the bigger numbers are the ones who fail without even reaching a sideways stage. Of course a "how to" book author must keep pushing for everyone to be number one and insure excellence; and sell that any other acceptance is a cop out. Accepting the "stuck or sideways stage" is a circumstance issue. If you started okay but business reached a sideways point, but by then the entrepreneur got married, had kids then very very few are able to take the risk to start again. Hence the large numbers of family screw ups amongst the very ambitious entrepreneurs. It is also an age thing. Just because they never got to create a facebook or google or dropbox is no reason to be considered even mediocre leave aside a failure. We do sessions with students who don't do well (like me,they are still the majority). So some of you may be surprised but one of the best responses come from a motivating session I do with the students where the topic is "excellence is dead, the future belongs to the mediocre". The INTENT is to motivate and give new direction to those who don't do well and once again i must stress "they are in majority". Why does one sell mediocrity as an advantage? Today knowledge is expiring faster than ever before. Google is commoditising knowledge and making it available free to all. In the non Google era our economic value was based on our 'exclusive knowledge". Once again experience with erstwhile excellence geniuses shows that most are very unsettled and upset when their past knowledge is no longer unique or commands the same economic value. The same applies to technology. SO what is the sustainable resource ?? Going further for small business and dependent on the age and circumstance of the entrepreneur the most successful advice i believe I have always given to start up business has been "to first focus on avoidance of loss as the best way to make a profit". Now to hot shot consultants and book authors I am considered to be giving weak advice. BUT to me this is motivation when one is working with an entrepreneur within a very common constrained environment.This may not be suitable if lecturing from a dias. Then has worked well but need to emphasize since my work in India specific it may not be relevant to the developed economies where there is sufficient capital and entrepreneurs are asked to plan for years of losses just for eyeballs etc etc. We all remember that phase which keeps reappearing. The majority of entrepreneurs should not be advised that because most find themselves broke very very soon. I believe teaching them to ideate and innovate only within existing resources and accepting constraint as the best environment for ideation works well. Why? Because when an entrepreneur finally has no choices left, then he usually finds a solution because he has to. That is when he finally becomes a real entrepreneur. I guess i must mention that those who are startups with tens of millions and more may ignore this completely.

posted on Tuesday, April 19, 2011 at 5:56 AM by uday pasricha


Thanks Dharmesh.I love the way you engage your readers. Great article and interesting comments.  
My two cents: 
I consider myself as a conservative entrepreneur. Being a mom, wife and solo entrepreneur, I feel that my Enterprise grows as much as I get fulfilled in my personal and family life. Every step I take, must be in the highest good intention of all concerned. Yes, the growth may be slow, but I feel the connection and that is important to me.  
 
To answer your questions: 
What do you think? Are you stuck in a quagmire of mediocrity?  
 
As I mentioned, I am conservative. However I personally think, that mediocrity is not bad at all. There is a learning curve for every entrepreneur. A child born to an entrepreneur thinks and takes action differently than the one whose parents are salaried class. There are mindset shifts that needs to be made. It is OK to be in mediocrity, but while there, we must look around the risk takers/big dreamers, watch them, learn from them and MOVE past the self imposed barriers. Yes, I did feel stuck, but when I made a DECISION to move past my barriers, I was able to move on with a profitable business and a good lifestyle (which is important to me). 
 
Should you be hitting the reset button and taking your shot at becoming legendary? 
 
Yes and No 
The meaning of legendary-"Extremely well known; famous or renowned." 
If the intentions of the entrepreneur is to become famous and renowned though his Enterprise, then YES. However there are several people, who have the desire to become entrepreneurs, not to become famous, but to create profits, impact the world, by sharing their creation with the world and helping people. In the past it needed a lot of capital and seemed impossible, but these days with the internet, every person has the chance to explore the entrepreneur in him/her with very low capital. 
As for hitting the reset button, I would say the following: 
1. Be invincible 
2. Give yourself reasonable time to track the progress and if it does not work, hit the reset button. 
3. When making any move, check with your head and heart. Don't make decisions just with powerful information alone OR just with your impulsive feelings. Write down and check with yourself and only when YOUR emotional AND logical brain gives you green signal, hit the reset button. 
 
Seven Steps To Overcome Barrier To Start A Business 
http://bit.ly/dJfFMX

posted on Tuesday, April 19, 2011 at 6:55 AM by Lalitha Brahma


The comments about starting a business are excellent. 
 
And I have to say that DropBox has saved me in more than one instance since I have been using it. During a computer malfunction I was able to continue working from my laptop. Yesterday I made a change to an excel file that I had spent almost 10 hours on. I went to do a minor tweak when I restarted the project then saved it with disastrous effects. I was glad to be able to go to dropbox and retrieve the previous version!

posted on Tuesday, April 19, 2011 at 7:27 AM by Marsha Kopan


THis is a nice article. Will give me more enthu to work on my website www.HRStop.com 

posted on Tuesday, April 19, 2011 at 8:00 AM by Rashmi


This is actually quite a dishonest and/or irresponsible post. As a healthy counterpoint, I suggest reading this: http://steveblank.com/2011/02/03/vc%E2%80%99s-are-not-your-friends/ 
 
Is Dropbox breakeven - or HubSpot for that matter? Please wait until you have a few years of positive cash flows behind you before deciding that self-sustainability = mediocrity.

posted on Tuesday, April 19, 2011 at 8:49 AM by Thomas


Darmesh, 
 
Thanks for writing this article. There's a cultural bias in the startup world to keep your company alive at all costs. This is mostly a good thing, because persistence is a key factor to success. 
 
But knowing when your company has missed the window for becoming a major player is also important. Awareness of the stage your company is at helps you to make the important decisions, like whether to sell it, shut it down or convert it into a lifestyle business.  
 
All of these options are valid; as others have noted, it depends on your passions and goals. The worst, however, is sacrificing your potential or other parts of your life because you think you're running a startup that's about to have break out success, when you're really running a lifestyle company. 
 
With this article, I now have something to point people to when they look at me with a blank face when I say I want to move on from a startup I've run for eight years because it missed it's window for greatness. Not that it's a bad business, just that it's not the business for me.  
 
[Don't know if you remember, but you, I and Karl talked about my struggles with this issue last fall at a Dart Boston dinner at the Lansdowne Pub. I'm still working on it, but have parts figured out. For now, accepting I have a mediocre company has greatly reduced my stress levels.] 

posted on Tuesday, April 19, 2011 at 9:37 AM by Trevor


Uday Parischa you have echoed my thoughts. Just because you are not super success in terms of making difference to whole lot of people it does not mean that you are not successful. As long as you are passionate and delivering real value however small it maybe you are successful.

posted on Tuesday, April 19, 2011 at 10:08 AM by Rama Raju


If you take someone money from someone else to pursue your dream, you owe it to them to see it through to the best possible outcome (even if a better idea floats along).

posted on Tuesday, April 19, 2011 at 10:43 AM by Dag


Love this article and really agree with a few of these comments. I owned my consulting business for nearly 20 years and when the economic bottom began to quake:-), I decided to launch a long-awaited internet service. Same focus but digital. It has ebbed and flowed~still struggling in the 'big' bucks of the thing. However, we are constantly re-thinking, re-strategizing and now, getting the formula right after a year. I do not believe in failure but I do believe in assessing what is going wrong, stalling and changing quickly.

posted on Tuesday, April 19, 2011 at 11:03 AM by Jamie


One important question you raise about how do you know about you are stuck in Quagmire? Because every start up aspire, in the future they make money.anything doesn't work we have to move on this is also true in case of personal life of me.i attempted so many exams but not even seceded single exam till now.In my prospective this is excellent article not only for startup but also for life..

posted on Tuesday, April 19, 2011 at 2:06 PM by datt


I do agree with the article. It does not pertain to just start-ups; it is a rule that is adopted by successful entrepreneurs. One of my favorite quotes was by a very successful Mexican entrepreneur in his late 60s, he said: when I start a business, I make sure that I am one of the market leaders with a great differentiator. As soon competition creeps in, I make sure to sell or merge immediately and move on to the next breakthrough idea/business". It is not given to anyone to just let go that easy, it is a challenge and a skill that entrepreneurs need to learn and embrace as they keep starting and building companies

posted on Tuesday, April 19, 2011 at 4:13 PM by Omar Sary


You have made some very good points in this article.

posted on Tuesday, April 19, 2011 at 5:11 PM by Arthur


Realizing when it is time to move on is definitely one of the very difficult tasks as an entrepreneur. Great article.

posted on Tuesday, April 19, 2011 at 11:26 PM by Ole Ronberg


To those who are taking Dharmesh's comments literally, I think you're all missing the point. The spirit of this post is RIGHT ON! Your emotional tie to your start-up can blind you to the realities of your business model. Stand on top of it and look down. Is this really how you want to spend your days? And this isn't only for start-ups. It's any capital investment into a business that's just not delivering the returns you thought it would. Established businesses make these decisions all the time.  
No question it's painful-but short-term pain, according to Dharmish, will drive long-term gains.  
 
Zen on!

posted on Wednesday, April 20, 2011 at 10:15 AM by Mike Mason


I enjoyed the message and it has a lot of merit. However, it is worth remembering that many of the huge successes came after a pretty long period of evolution(and usually a lot of cash). 
 
Few ideas are every 100% right first time. The fun of start up's is identifying the roadblocks and making the business better to overcome them. It's alway long hours and hard work, but the satisfaction is greater when you win through. 
 
The comment "If 90% of everything started going “right” with your startup, what will it become?" works fine - as long as the 90% is the right approach.

posted on Wednesday, April 20, 2011 at 10:51 AM by Neil Robertson


Great article. Thought provoking on many points !

posted on Thursday, April 21, 2011 at 8:11 AM by kabir


A simple article but very good w/ great advice worth reminding. 
 
thanks!

posted on Sunday, April 24, 2011 at 1:06 PM by Tehmasp Chaudhri


Anyway, when starting up give your 100% (not a cliché) you see when you aren't focusing completely you feel (in retrospect) that something lacked last time and the entrepreneurship dream becomes sort of a gambling habit and you keep coming back to it. 
If you take someone money from someone else to pursue your dream, you owe it to them to see it through to the best possible outcome (even if a better idea floats along). 
 

posted on Monday, May 16, 2011 at 8:54 PM by leonardo chacon


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