I left a lucrative and cushy job to start a new business with a co-founder whom I respected tremendously. We raised funds from friends and family (including my own significant investment), got our product to market, and apparently still have maybe 60-70% of our funds left.
However, we haven’t been able to get our CAC low enough to balance our LTV (yet). I’ve been chipping away at optimizations that I think will ultimately help get us there, but he’s constantly trying extreme pivots because he doesn’t think incremental improvements are worth pursuing. He claims that if something won’t improve conversion rate by 100% or more, its not worth the effort. All the extreme pivots he’s proposed have left my head spinning.
We just had a heart-to-heart, and he confessed that even if we did make the product opimizations it would take to turn a profit, it still wouldn’t ever result in the $50MM exit he has in his mind as his goal.
My question is, should I just consider us as mismatched partners/priorities, and call it quits (getting some/most of my initial investment back) or fight to give us more time to turn things around? My opinion is that startups are a marathon, not a sprint, but he is terribly impatient to produce huge wins and is now ready to throw in the towel. I expected that we’d give our original idea at least a year to get to profitability, and giving up after only two months seems crazy to me, given what we’ve already accomplished (we have paying customers, admittedly not many).
What should I do in this situation? Fish or cut bait?
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May 01, 2017 at 03:50AM
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