"I believe in our product, but I don't believe in our business model.When asked by friends doing "normal" jobs what it's like running a startup (my first one, mind you), I respond half-jokingly that every day is either the best or worst day of my life, that I've experienced the highest highs and lowest lows of my short career. I've learned more in the last year than I have at any other point in my life, and I've become a better programmer and designer. I've always said that even if this doesn't work out, I'll have become a better, more capable professional in the end. And I feel that I have. But I still feel like shit.I think my co-founders are idiots, that they fouled up their side of the deal, but I feel as though I've invested too much time and energy to bail now."
Lost in our startup culture's enthusiasm for "rapid prototyping" and "pivots" is the fact that sometimes, your startup can't overcome "Original Sin."
It might be a sin of business model, founding team, or technology choice, but it really doesn't matter. What does matter is that it's almost impossible to overcome.
Friendster was the first major social networking success story, but failed because it's choice of Java architecture made it unscalable.
More recently, Color had a wildly successful founder and tons of VC backing, but no real business model.
Failure sucks. If failing doesn't make you feel bad, I don't want to invest in you. In sports, we frown on players who cheerfully sing in the shower after losses, and are firming up social plans while the game is still in doubt. The same applies in the startup world.
But the best way to deal from failure is to accept it, learn from it, and move on--not to keep denying it. This isn't to say the anonymous entrepreneur above should simply quit immediately, but he should make it clear to his co-founders that this isn't working out, and set up a plan to extricate himself.