Should I quit or optimize?

Whether this is just a dip or a cliff is hard to determine yet fateful for your business and product

In “The Dip” Seth Godin describes the all-to-common valley of despair that most projects, ventures or other creative endeavors experience: The lack of results after initial quick progress that leaves you frustrated and tempted to quit. Eventually, with continuing effort, the breakthrough is there, and on the 1001th iteration, just like Edison and his lightbulb, your product will work as you envisioned it.

The common notion is that these lows are simply part of the journey. The entrepreneurial roller coaster. The divine test to separate the winners from the losers. You just have to keep chipping away and success will come, they say.

But “Never quit” is a nice rallying call but poor business advice.

There are plenty of well-documented cases of the sunk cost fallacy that led enterprises to despair by continuing to invest in hopeless business cases. The agile movement is based on the premise that we sometimes must admit we have been wrong and change course. There are excellent reasons to call it quits and abandon a business, project or idea when it is not delivering the intended results. So after the low that resembles the “dip” there is no up-swing. There is a cliff. The end.

Now, in hindsight, it is easy to call out the winners. But if you are in that valley yourself, it is hard to determine if it is just a dip or a cliff. They look and feel the same at the beginning.

So let’s say you launched a new product that fails to show traction despite all your discovery efforts. That happens to the best of us. Should you drop the product or continue investing in it to improve it?

This is a common dilemma not only in startups but also in every product team.

There is no clear-cut recipe for these decisions, but these questions helped me the most:

Are customers willing to engage with you?

Customers are the ultimate judges when it comes to products and enterprises. Their willingness to engage with you is a great canary in the mine.

• Dip: Key stakeholders and customers are responsive, actively engage with you and your product, and are willing to provide feedback. You have good customer relationships.

• Cliff: Customers are disengaged and hardly respond to your efforts to get their feedback. The customer relationships are strained.

Is this impacted by the current market conditions?

We are all dependent on higher powers to some extent. Markets can follow trends and cycles you as an individual are powerless to impact but that you can sometimes use in your favor.

• Dip: Market conditions are temporarily poor but improving, indicating that your product could catch on if you persist.

• Cliff: Market trends are moving away from your product's value proposition, and external conditions are increasingly unfavorable.

Do you see a positive change, no matter how small?

The analogy of “chipping away” at a problem is helpful here. The tree is not falling yet, but can you see chips flying? Or are you banging your head against a wall?

• Dip: There are positive signs of incremental progress, such as improved KPIs, customer feedback, or small but consistent wins.

• Cliff: Efforts lead to stagnation or regression, with no signs of positive momentum despite ongoing investments.

Can you pinpoint the causes or issues?

Every sensible problem-solving process presupposes a problem definition. If you fail to define the problem, you will fail to devise a solution.

• Dip: Feedback and data clearly indicate the issue and what causes the lack of results. Based on that, you have a clear idea of what to tackle.

• Cliff: Data and feedback is inconclusive. There are no apparent issues; most improvement ideas are based on hunches and guesses.

Do you have a plan for how to improve the situation?

If you can define the problem, do you have actionable plans to tackle it? Strategy “Hope” - doing nothing and hoping for the better - rarely works. At least you should have a set of solution hypotheses you can work on and the resources to do so.

• Dip: Resource expenditure is sustainable, with a clear plan for future growth and potential return on investment. You have many ideas and the time and resources to try them.

• Cliff: Resources are depleted rapidly with no clear path to recovery or success, signaling unsustainable investment. You run out of ideas, time, and resources.

Is this an essential part of your long-term strategy?

Some ideas have value even though their impact is not immediately measurable. Heck, this thing here, writing, generating content, is such a thing. This post won’t make me any money, but it supports my long-term goal of improving my craft. I guess most projects that you could define as R&D or other learning efforts fall into this category.

• Dip: The project aligns well with your long-term strategic goals and core mission. This might not have an impact now, but it complements your core competencies.

• Cliff: The project has drifted from strategic priorities or core competencies, leading to doubts about its long-term viability or value.

Do experts and advisors agree with your view?

Sometimes, we are too far into the woods to realize we can’t see the forest for the trees. Plus, we are also prone to the confirmation bias that makes us ignore disconfirming evidence that we should stop our endeavor while making us narrowly focused on the tiniest confirming evidence. Getting an outside view is helpful to check yourself.

• Dip: External advisors or mentors with industry experience believe in the project’s potential and recommend that you persevere.

• Cliff: External feedback is consistently negative or suggests that the project is unlikely to succeed, advising you to withdraw.
  (Note: Be ware of you confirmation bias. You might actively look for those who tend to agree with you).

Are you still passionate about the idea?

It’s not objective, but there is a case to be made that you should no longer stick to a project you are no longer passionate about. Money might be a great motivator, but the stresses of a project that feels hopeless and exhausting should be at least considered.

• Dip: Despite the setback, you are still passionate about the topic. You firmly believe you can make this thing work.

• Cliff: The fire is out and when you think about the project, all you feel is “stress”. You lost hope that this will work.

These are by no means “conditio sine qua non” - one or two questions may suggest that it is a cliff, and you still could have plenty of reasons to persevere. However, these questions helped me persevere in some cases and helped me quit in others.