# 6 Signs It's Time To Move On from a Failed Startup Channel: Rob Walling Video: https://www.youtube.com/watch?v=G1W_RCjpdY0 Duration: 9 min Language: English Words: 2052 Transcript page: https://viewrankai.com/tools/youtube-transcript/G1W_RCjpdY0 --- [0:00] in this video I'm going to cover six signs it's time to move on from your startup and if you stick around till the end I'll tell you the silver lining of moving on at least if you're building a SAS company I'm Rob Walling serial entrepreneur I've written three books on building startups and I've invested in more than 120 companies did you notice that number just went up we just closed another couple batches of Tiny Seed Founders so I'm talking about moving on from your startup and I want to differentiate between a lifestyle startup and an ambitious startup it can be bootstrap you can raise funding it [0:29] doesn't matter but having an amazing lifestyle SAS that's throwing off five ten twenty thousand dollars a month and isn't growing at all that's an amazing business it creates an amazing lifestyle for you but if you're more ambitious and you're looking to grow into seven or eight figures then being flat for a year might mean that it's time to hang it up so really this video will focus much more on the ambitious growth oriented startups whether you're bootstrapped or you raise some amount of funding sign number one that you should move on is when it's dragged on for a year or more with no growth either through through a [1:00] lack of effort on your part or through hours and hours of effort from you showing that you do have the interest in growing it but by the time you get to a year of working on this with no growth what's going to change from there you know what haven't you tried what other options are possibly going to change it at that point realistically a year is not a hard and fast number maybe for you it's six months maybe for someone else it's 18 months but I feel like if you've literally been flat or declining for a year you have tried a lot of things and this is a case of knowing yourself if [1:30] you tend to stick with things too long maybe you need to ease up on that maybe you need to have a sooner time frame maybe you need to quit after six months of no growth or if you're the kind of founder who bounces from one thing to the next to the next even then honestly a year is a really long time oftentimes there's a lot of Founders who are building something and they're still under a thousand mrr or they're at 2000 mrr after a year of really grinding on it in that case to me yeah they need to bring an outside help or you need to [1:55] shutter the thing or sell it but let's say you're at 100K mrr and you plateau for a year there's a lot of reasons why that could be happening I actually released a video about plateaus and overcoming them just a couple of weeks ago and we'll link that up in the description if your business is doing a million two million five million a year and you've plateaued is it time to hang up after a year maybe or maybe not really does depend on where you're at with the company in terms of Revenue and traction and I think your own personal willingness to grind through it and see [2:23] how far you can push it sign number two funded startups fail when they run out of money bootstrap startups fail when the founders run out of motivation and by motivation I don't mean this week you're tired of working on something I mean this is when you're just 100 absolutely done with it even if you're growing there are times when you're running a company and it's growing really well and everything's going well and you're tired of the product you're tired of the customers you're starting to burn out and you just are ready to move on now I don't believe you should sell or shut down your product and move [2:52] on if it's been a short time or if it's something that's transient you know if you are in the point where you're burning out or you're experiencing to depression or some big life changes and your company's kind of getting in the way I like to think that you should work through those and not make permanent solution to a temporary problem you have a temporary problem that's causing you grief causing you to not be interested in running this company for now it's a one-way door if you sell that company the odds of you being able to buy it back are almost zero if you shut it down [3:21] it's gone I'd say hold on keep working see if it passes but if you find yourself month after month maybe even up to a year where you're like I just want to work on this anymore and you're the type of person who does see things through that's probably time to think about what your exit strategy might be sign number three is when you can't make payroll and layoffs won't fix it without breaking the company there are a lot of reasons why you might not be able to make payroll let's say a big client cancels let's say you get a Google smack let's say get kicked out of the App [3:49] Store where you've been getting all your traffic so you have platform risk let's say you run out of funding you have to look at all your options I at one point was looking to borrow for my 401k to make payroll I never had to to do that some people borrow on credit cards not something I've ever done not something I can recommend you have to at least evaluate and look through all your options oftentimes when you're approaching running out of money you can figure out ways to reduce expenses Often by reducing headcount in order to keep the company solvent but sometimes if you don't see it coming or you don't react [4:18] fast enough there's just no way to salvage it it's an unfortunate truth but of course it is one sign that you may need to move on I want to take a moment to highlight the sponsor of this video lemon.io it's hard to find good Engineers especially for trying to reduce your burn rate lemon.io delivers vetted senior results oriented developers all at competitive rates as a subscriber of this channel you can get 15 off your first four weeks working with their Engineers stop earning money hire developers smarter visit lemon.io microconf sign number four is when you've built on a platform and that platform builds your feature set into [4:52] its core offering and you Flatline or your creator this is pretty hard to recover from now certainly you can try to build out additional features especially if the platform builds kind of a crappy version of it you can try to build something that's more usable this is hard to recover from not impossible but it might be a sign that you want to move on I do think that if you're on a platform and they replicate your product in essence it's a tough time and of course this is a tough time to sell too because no one wants to take on that platform risk and that is one reason [5:18] that platform risk is so dangerous sign number five that you might want to move on is when you receive an offer you can't refuse I have seen Founders turn down ridiculously high offers because they think they want to keep growing the company which may be a good reason or they say something like I don't know what I would do next this company is my whole life you're an entrepreneur you'll figure out what to do next I think that mindset is maybe a mindset of fear but you're you're a Founder you've built something that someone really wants and is willing to pay a lot of money for if [5:46] you can put enough money in the bank where you don't have the freedom to work on whatever you want for the rest of your life my guess is you're going to work on something that's pretty interesting and it gives you the freedom to take a long slow roll on the next one and not have to get to revenue so quickly like so many bootstrapped and mostly bootstrap Founders I now have to if someone comes along with an incredible offer it's something that you should consider even if you love that company I think there's something to be said for providing for yourself maybe your family for the rest of your lives [6:12] and sign number six that it might be time to move on is when you make a bet on a technology or an ecosystem and that bet isn't painting out I have a good example of that it's Derek Reimer the founder of savvical before savvical Derek started static kit which was a tool set for static websites and he was betting on it essentially being the next WordPress and and becoming a ubiquitous technology it might still be but it didn't get there fast enough I asked Derek about his decision to essentially shut static kit down he did wind up selling it but it was just a small amount of money and he rolled that into [6:48] running Savvy cow but he told me and I'm quoting him now static kit was an example of building something in a space with a lot of hype without a Clear Vision for how much value you can capture from that ecosystem static garnered a decent amount of interest but ultimately proved to be a pretty low value commodity so the decision for you as a Founder is do you have the will and the vision to keep following this path of iteration potentially far from what you think the market might need or are you better off starting with a hypothesis that you feel more confident about I sometimes talk about unfair [7:18] advantages you might have when you launch a SAS company oftentimes it's an audience or a network or it's being early to a space and the risk of being early is that sometimes you're early and it never pans out and so far static websites even now a couple years after Derek shuttered static kit still I don't think would be giving him the growth that he wanted the ecosystem certainly has not become the WordPress of today but when you're early to a space there is that risk that it just grows slowly or that at some point it declines and that the bet you're making on the ecosystem doesn't pan out in a second [7:49] I'm going to tell you the silver lining of moving on for your startup specifically if you're building a SAS app before I do that I wanted to tell you about the sister podcast to this YouTube channel it's called startups for the rest of us I've been hosting it for 12 years and every week I'm talking about building launching and growing ambitious SAS companies SAS is incredibly valuable even at low mrr levels your sales your exit multiples are extremely high because these businesses are so cash efficient and there's a lot of demand for recurring Revenue so let's just take an example if you've built a SAS company to ten [8:22] thousand dollars of monthly recurring revenue and let's say 80 of that is profit which is totally feasible so you're making eight thousand dollars a month of profit that means ninety six thousand dollars a year and if we were to take a 5x multiple on your net profit that's an exit price of 480 000 in my book if your failure leads you to sell for almost half a million dollars it's a pretty nice failure if you enjoyed this video I'd love it if you'd hit that like subscribe to the channel we're coming out with videos like this every week deep dives into building launching growing SAS hope you enjoyed this one [8:52] I'll see you next time foreign [9:03] [Music] --- About this transcript Read from YouTube's own caption track and laid out by ViewRank AI (https://viewrankai.com). 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