No entrepreneur ever wants to admit failure.
But there is a worse fate: running a startup that's become a zombie.
Referly was designed to help anyone earn money for driving product purchases. People would get paid to write articles and include product links in the content. But Referly's most important metric, revenue, wasn't growing at a promising rate, Morrill says. It effectively started to fall into the zombie trap.
She compares the idea of a zombie startup to the movie "The Sixth Sense."
"Kind of like in the 6th Sense when Bruce Willis doesn’t realize he is dead and tries to have a nice dinner with his wife, there are startups out there who are still “operating” but might as well not be," Morrill writes.
It's only been six months since Referly debuted at Y Combinator's spring 2012 demo day, but Morrill is willing to admit that it died.
"It's not the kind of dead where the website goes dark and everyone gets jobs elsewhere," Morrill writes. "But the idea that we started with turned out to be the wrong one, so we killed it and yesterday I acknowledged publicly to ourselves and everyone else that we have to change our course."
After going through this experience herself, Morrill left some tips for entrepreneurs to help them determine if their startup is turning into a zombie.
Here are few hints, in Morrill's words:
- You don't want to get out of bed in the morning.
- You haven't hit 10% week-over-week growth on any meaningful metric (revenue, active users, etc).
- You're working on the same idea after 12+ months and still haven't launched.
- You've hired consultants to figure out revenue, culture, or product in a company of less than 10 people.
- You've launched a consumer service and have less than 2% week-over-week growth in signups
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