In these turbulent times of COVID-19, my good friend Charlie Paparelli has been hosting a weekly Zoom meeting for entrepreneurs interested in discussing our “new normal.” This week’s topic, which I absolutely stole for this article’s title, was “What do you do when your market disappears?”

I feel very blessed that Rocket Partners’ business has been going strong these last six months. We are continuing to build new innovative solutions for our fantastic clients. In fact, most of our recent work has shifted to building new revenue generating digital experiences to help our clients adapt to their new COVID-19 induced competitive landscape.

That said, in previous tech cycles, I have found myself exactly in the predicament of having my market disappear. Below, you can find what I believe were four costly mistakes I made that all entrepreneurs in this situation need to avoid.

I started my first company, Synthis Corporation, in late 1999. At that time, we were a consultancy specializing in helping dot-coms build their tech platforms. After 9/11, all residual dot-com consulting evaporated. Market #1 gone. I had a great team of five committed partners, a bench of expensive consultants, a list of great clients who were now all out of business, and a portfolio of software tools and IP that we had been developing as part of our consulting practice. As I have written about here before, my partners and I decided to pivot out services and commercialize our IP as a suite of software development tools.

A year or two later, the software development tools market dramatically changed with large vendors like IBM starting to give away their tool sets to support the sales of application software and consulting work. Market #2 gone.

Again, we looked around for a new market and decided to shift our IP to target the ISO-9000 and the new Sarbanes Oxley (SOX) compliance markets. It turns out the SOX market never really developed the way we had hoped. Large accounting companies threw bodies and billable hours at the challenges created by the new laws and were not interested in labor saving software. Market #3 gone.

Looking back at Synthis’ journey, I can absolutely tell you that we NEVER should have left consulting. The consulting market came back strong within 18-24 months, and my partner (down to 1 partner at this point) and I spent five years trying to commercialize a software product that was more of a technology trying to find a problem, instead of trying to identify a problem and building the business to solve that problem. We were broke for five years anyway, so we should have stayed the course in a market that we knew with a validated problem, where we already had customers, success stories, contacts, etc.

So why did we do all of these pivots? Why not stay the course or cut your losses? After time and age, I realize at least four errors in judgement on my part.

1. I was in love with the tech framework that I had built as a consultant and did not want to abandon it. There was no way for me to be objective about its marketability.
2. We were in love with being our own bosses, and we simply had no idea what we were going to do next, personally, if we shut the company down. The result was some fear-based momentum.
3. We had a damaging bias towards action. We did not want to simply hunker down and bide our time or feel like we were trying to squeeze blood from a stone. We wanted to feel like we were doing something productive. As my good friend Evan LaPointe @ CORE has written, coached, and tweeted about numerous times, a bias towards action needs to be eliminated from strategic thinking. As he put it to me recently “The time to step back and use the brain to think rather than the muscles to act can save a lot of pain. Same goes for bar fights.”
4. After our first product market disappeared, we were not objective about treating our existing investments (both personal time and money, as well as investor dollars) as sunk costs. We had to squint really hard to make new markets look like they needed our tech. That was a huge mistake.

Having coached many tech entrepreneurs and been an entrepreneur for my entire career, I can tell you that people seem to irrationally love a good pivot story. Early-stage entrepreneurs, especially, are praised for refining their offering and steering towards hopefully greener pastures. From my personal experience, however, a pivot can be an extremely expensive proposition that is unavoidably fraught with conflicts of interest. I think that, in the long run, many entrepreneurs would be better off hunkering down and waiting for their market to return or simply closing up shop, walking away, clearing their head, and finding a new opportunity to fall in love with.