When should an entrepreneur throw in the towel?

I recently listened to a speech given by a VC to a young group of entrepreneurs. He estimates that 1 in 1,000 deals that cross a VC’s desk get funded as businesses. Of those businesses that do get funded, about 80% fail to achieve their goals. As that is a 1 in 5,000 chance of being successful, it begs the question: when should an entrepreneur throw in the towel?

Consider these situations:

The manuscript for Carrie, author Stephen King’s first book, was rejected 30 times before finally being accepted by a publisher. King went on to sell 350 million books.

Harlan Sanders, the founder of Kentucky Fried Chicken (KFC), made the first sales of his secret recipe to a restaurant after 1,008 failed attempts.

Entrepreneur, author and blogger Seth Godin published his first book, Business Rules of Thumb in 1986. That was immediately followed by 900 rejections and 30 failed projects.

Q: when should an entrepreneur throw in the towel?

A: apparently, never.

Written by Michael

Michael Douglas has held senior positions in sales, marketing and general management since 1980, and spent 20 years at Sun Microsystems, most recently as VP, Global Marketing. His experience includes start-ups, mid-market and enterprises. He's currently VP Enterprise Go-to-Market for NVIDIA.

Strategy Studies