Evan Carmichael and Stephen Kelly advise Julian, a dance studio owner, on when to kill a product. They say get direct customer feedback to diagnose whether it's the idea or execution, watch your own enthusiasm as a signal, and distinguish between lifestyle businesses that can plateau and high-growth companies that should cut "walking wounded" ventures to focus on scaling.
Chapters
We have Julian calling in.
Great. Hey, good. I love it. I love this.
Julian, tell us, tell us what you do and give us your question.
Absolutely.
So what I do is I own a dance studio, kind of like Evan, and we have Move Dance and Fitness, right?
That's kind of our motto.
So accept compliments from everyone, limitations from no one. But recently what I started doing is is this blog called SleepSumo.com, right? Which is pretty much just about helping entrepreneurs sleep better because I think, you know, I own a business myself, you know, and I know as entrepreneurs it's extremely hard to sometimes shut it down, right? And say like, hey, it's time to go to bed. We can fight tomorrow again, you know? So anyway, that's the blog. That's what it's about. But my question to you is, When do you know when it's time to kill a product? So now you're making money and maybe you have 2 or 3 making money. When it's time to say, you know what, enough, let's just focus back on, on this versus the 2 or 3 that we have.
I think it's a great question. And I think the reality is the best sanity check is to sit in the shoes of the customer and go and, you know, you should have picked up the phone, social media, checking with your customers. You know, it comes back to what Evan says. What is the value that they're deriving from your product or service? How is it changing their life? How is it creating benefits? How is it saving them time? How is it making them feel better? All those sort of things. You'll know pretty quickly when you talk to your customers. Is it a product failure issue or idea failure, or is it actually, if I tweak it a little bit, I could have the right answer? And then, you know what, The great thing is if you actually said to the customer, how about if I came back to you in 30 days' time and I tweaked it to do what you're telling me you need, would you be interested? And they're always going to say yeah, they're always going to back you because also you've got a kind of relationship with them. So I think it's a great question. What I would advocate though is you kind of, when you do, we've all failed. Let's be honest, we've all failed. The entrepreneurs I mentioned like Richard Branson who's coming to Sage Summit, loads of product failures, company failures, but You know, he's awesome because he's done so many projects. What he's been really smart at— and he started initially in music, and then he's got a massive travel company, Virgin Atlantic. He's got all these other businesses, Virgin Money. What he did really well was test the market, go out there, kill the businesses that weren't going to make it, and scale up the businesses that were and the products that were. And I think you've got to trust your instincts. I think there's a thing Evan says about belief, but as entrepreneurs, some days are dark days, let's be honest, and you need to kind of give yourself a bit of spiritual uplifting. And that's when you go back and check in with your customers, because, you know, when you actually talk to your customers, they're the greatest people on the planet and they, they want you to be successful. They're really rooting for you. So you'll find out very quickly from those customer conversations whether it's a kill or it's an enhance. Innovate and adapt.
Julian, for me, for me, it would be when you lose your passion in what you're doing. Because to Stephen's point about talking to people and getting feedback and having to twist and tweak your offering, when you lose the passion for that project, you're not going to be willing to put in the hours anymore. You're not going to be willing to modify it and change it and put in the work anymore. And so if you are though, like if you still love this thing, this is still your baby, you're still excited about it, you know, if it's a dance thing or something else you're talking about, then you'll find a way to make it work. Like with more hustle, you know, what you have may not work great yet, but with more tweaking and more hustle, you'll be able to make it work. But if you don't have the passion, you're going to quit. And so that's when you give it up. The flip side, as well as there are entrepreneurs who are making money and lose their passion in their business and they get bored, and that's actually the time to sell your company, right? It has value. If you're not passionate about it anymore, it's just going to flatline and then start to decrease. And a lot of people think, well, that's passive income for me, so I should keep it. But really, like, that's the time— go sell it, move on to something else that you are excited about. So for me, as long as I'm excited by something, as long as I believe in it, then I'm doing it. If not, then move on to something else. And everything that you put in has been kind of sunk cost. You've grown, you've learned, you've gotten better, and now, you know, focus on the future.
Awesome. So do you actually guys write down like, okay, this is some of the stuff that I've learned and I'm okay with just deciding that although I might still be making money from it, right? I feel like it's not necessarily scaling or growing, then I'm okay. I'm just gonna kind of just journal, this is what I've learned from it and just put it on the shelf perhaps and just like move on to the next step.
Yeah, I think there's a couple of things in terms of what I say, which is a bit harsh actually, but it's true. There's only two types of companies in the world, two types of businesses. There's growing successful businesses and there's dying businesses. The only exception to that is lifestyle businesses. And some folks who might be out there would just say, you know, I'm happy, I've got a great work-life balance, I run a lifestyle business, it kind of flatlines on revenues, It gives me a good lifestyle. I play golf or I dance or whatever I want to do 3 days a week. And that's okay. But I think the sort of people who are the entrepreneurs in the world we've come from and the people who have a big idea and want to change the world with loads of passion typically have exponentially growing businesses. So within that, I think you could look what, you know, if you're down the road of 3 or 4 years, You could say, actually, I've got a good business I'll use as a funding vehicle to actually do my big idea. And one of the businesses— actually, one of the businesses I've invested in, a great business called Cloud Apps, they've reinvented themselves 3 or 4 times and they've got good customers. They've done a good job, but they plateau with one product. They use that as a cash vehicle to fund their next big idea. And they started with sustainability, then they started with really cool stuff around kind of gaming engagement. And then they started with all the stuff around— a lot of big companies use these products called customer relationship management, but it's really hard to get people to use those. So they provided all these kind of incentives and gaming and fun things to actually really make it a lot more fun than, than being in the workplace. So just as an example, I think if you've got a great product, great customers, you know, double down and go for it. But that could also spawn the opportunity to have other ideas. You know, like Evan said, we probably, 3 of us, could come up with 20 different ideas. So let's pick the best one, let's start that. But you want to build a company that could do 3 or 4 ideas. If they're related ideas, that becomes really powerful.
In the venture capital world, we would call them gazelles. Those are the high growth, you know, lots of opportunity, going fast. And then the walking wounded and the walking wounded. You're just like hobbling along, but it never actually takes off. Right. And as long as you're focused on that walking wounded business, you can never be a gazelle. And so if you've learned what you need to learn from it, then, then shut it down or sell it or give it to somebody else and focus on the next thing that you can be a gazelle with.
