I often wonder if I messed up by shutting down my startup. I had a pretty good thing going! I had won some pitch competitions that gave me seed money, I had signed up a paying customer, I had talked my way onto the stage of the biggest industry conference, and I had secured multiple offers to finance my business.

The latter fact alone may have been enough for many entrepreneurs to stay in the fight, but here’s the kicker: two weeks ago, the GSMA, the world’s most important consortium in telecommunications, announced that they are following through with my idea. A blockchain protocol to “….automate and streamline inter-operator business processes starting with roaming and settlement” is exactly what I was pitching to telcos in 2017/2018. And now it’s happening.

Did I seriously mess up deciding not to pursue what might ultimately have been a winning startup idea?

Two weeks ago, I talked about the internal motivation that you need to succeed as an entrepreneur and one of my loyal subscribers reached out with a great counterpoint: “sometimes [grit] actually is about quitting.” She recommended that I check out some research related to the “escalation of commitment to a losing course of action,” and the most recent and approachable source I found came from Adam Grant (author of Originals, one of my favorite Silicon Valley books ever) in a new book called Think Again.

He writes:

A hallmark of wisdom is knowing when it’s time to abandon some of your most treasured tools—and some of the most cherished parts of your identity…

It takes humility to reconsider our past commitments, doubt to question our present decisions, and curiosity to reimagine our future plans.

Grant’s book explains that, after long enough, you become your project.

Before I shut it down, that startup was my identity! I was “the blockchain guy” to my business school classmates and to the telco industry. I had stood on stage in front of hundreds of people and answered the question “Will you be back next year?” in the affirmative. I had sold clients, investors, co-founders, and service providers on a bold idea of what the future could be. And I had made promises to so many people in order to will a new idea into existence.

It is really, really hard not to blindly plow more of your money, time, and identity into a project like that. Admitting that I was wrong about the startup idea felt like admitting that my life was wrong in some way. But to not admit defeat may have been, in psychology words, “escalating commitment to a losing course of action.”

In the end, I think that made the right decision for me.

The following list is admittedly a little bit self-serving and -affirmational, but I think it’s important for anyone considering going into the startup business. It’s okay to stop pursuing a losing idea; the trouble is figuring out when you need to stick it out and when you need to quit. Here’s what hindsight taught me:

📈 Not all good ideas are venture-backable businesses.

Just because my vision for the future came to pass does not mean that my company would have become a success — far from it! Most profitable businesses in the world could not be successful venture-backed startups.

As I’ve written about before, the venture capital game is built around a very specific return profile: a company that has a low-to-moderate probability of generating a superlative return.

My startup probably had a high probability of generating a reasonable return — and that’s a huge no-no for the venture capitalists I wanted to fund my business, which might have led to me having no follow-on funding and a company on life support. Looking back, even the bull case for my startup likely capped out at single- or double-digit millions of dollars of revenue each year; it just didn’t have enough room to grow, so it likely wasn’t venture-backable.

🌊 The timing wasn’t right.

It is true that many startups will spend years in obscurity building the foundation for an “overnight success.” But there are far more startups who spend years in obscurity hoping for an overnight success that will never come to pass.

In my particular case, I had tied my wagon to the blockchain caravan — and I probably don’t have to tell you about the rollercoaster ride that industry has been through over the past five years. In 2017/2018, blockchain technology wasn’t ready for prime time — it was still too slow, there were too many privacy concerns, and while the “crazy ones” in telcos knew who I was and why my idea worked, the real decisionmakers wouldn’t go anywhere near blockchain.

I still believe that the architecture I presented — and that the GSMA is now championing — is the best one for this particular problem. But startups life and die by timing: catch a wave and you can ride to glory, but start too early or too late and you’ll fizzle out.

🤠 I wasn’t the right person for the job.

This is the hardest pill to swallow, but it’s the real reason that I made the right decision by leaving my startup: it is possible that someone could have built a great business in that space, but it’s unlikely that I could have been that person. (If that sounds sad or defeatist, don’t worry. Those who know me can attest that I rarely lack in self-confidence; just being honest with myself here!)

In order to succeed in a venture, you need to find founder-market fit.

In enterprise markets like the one I was trying to enter, a great CEO will not only know the industry like the back of their hand, but will have deep relationships with the key executives and/or decisionmakers at the companies they want to work with. In contrast, I was building my network effectively from the ground up, and while I had some early successes, getting to decisionmakers proved basically impossible — the final straw that led me to shut my startup down.

One of the biggest bummers of startup — and, I suppose, human — life is that you never get a chance to run counterfactuals. What would have happened if I had stuck with this startup? We’ll never know.

I might have landed the GSMA contract, gone public, and made a billion dollars by age 30. But I also might have wasted four years of my life on a losing idea.

All said, it’s hard to imagine grass that is much greener than what I’ve got at Astranis, and the only certainty is that if I hadn’t shut down my startup, I wouldn’t be where I am today. I’ll be just fine — and if you’re wondering whether it’s time for you to “reconsider your past commitments,” use my story as an example.

Sometimes, it is better to quit. Better that, than escalate your commitment to a losing course of action.

Thanks for reading Silicon Valley Outsider! Here are a few past editions that you might like if you enjoyed this one:

• 🚀 Pessimism is easy, but that doesn’t make it right

• 🧠 Self-doubt vs. conviction

• 😱 Don’t be afraid of working at a startup

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