Hi Reader
In the fast-paced world of startups, resilience is often celebrated. Being a 4x founder, I can vouch that founders are encouraged to “never give up,” “push through adversity,” and “keep going no matter what.” But what if perseverance is actually holding you back?
Enter the Dead Horse Theory—a concept that every entrepreneur, founder, and leader must understand to avoid sinking time, energy, and resources into a lost cause.
What is the Dead Horse Theory?
The Dead Horse Theory is a metaphor for situations where individuals, teams, or organizations persist in a course of action long after it has become unviable. It stems from an old Dakota Sioux proverb: “When you discover that you are riding a dead horse, the best strategy is to dismount.”
However, in business, we often refuse to dismount. Instead, we try all sorts of counterproductive tactics: - Buying a stronger whip (pushing employees or yourself harder) - Changing the rider (hiring new leadership, hoping for a turnaround) - Forming a committee to analyze the dead horse (spending more time diagnosing instead of acting) - Declaring the dead horse is “still alive in spirit” (rebranding without fixing the core issue) - Comparing your dead horse to others (convincing yourself that the market will eventually shift in your favor)
These tactics lead to wasted resources, prolonged failure, and missed opportunities to pivot towards something that works.
My Personal Experience: The Cost of Riding a Dead Horse
Having been involved in multiple startups—some successful, others not—I’ve personally faced the dilemma of when to persist and when to pivot. My first startup was a B2C franchise model that grew to 15 stores across Delhi-NCR in about 3 years. It was undoubtedly exciting, scalable, and attracting investors, but as we scaled, fundamental cracks started to appear since I was a solo founder & a non-technical one.
And though I had sales & marketing pieces covered (14 years in Sales prior to starting up), I admit initially there were operational inefficiencies, lack of standardization, and even though we were using a customized CRM, the franchise support system on crossing 10 branches was quite tough.
I'll be honest - instead of recognizing that we were riding a dead horse, we kept doubling down: - We sold more franchises, used that money to hire more people, restructured teams believing a new team could fix a broken model.
We spent heavily on marketing, hoping more customers would compensate for our inefficiencies.
In hindsight, we should have pivoted earlier. I was lucky that my wife & serial founder herself, Arpita, advised me to get out since this would be a disaster soon. As usual, I paid heed to her advice and we saw a very successful exit, but not before draining a significant amount of time and effort that could have been better utilized elsewhere (like building Brain Box Catalysts a year before we actually started!).
When to Pivot vs. When to Persevere
A startup’s success is not determined by blind persistence. It’s about knowing when to fight and when to walk away. Here are five key indicators that you’re riding a dead horse:
1. No Market Demand
You can have the best product, but if customers don’t need it, you’re pushing against the tide. If your startup is constantly struggling to get traction despite multiple iterations, it’s worth questioning whether you’re solving a real problem.
2. Mounting Losses Without Clear ROI
All startups burn cash, but there needs to be measurable progress. If revenue isn’t growing despite increased spending, it’s a sign that either the model is flawed or the market isn’t responding.
3. Repeatedly Changing Leadership Without Impact
Hiring new leadership is a common “fix,” but if multiple strategic shifts fail to yield results, it’s likely not the people—it’s the business model itself.
4. Data Says ‘No,’ But Ego Says ‘Yes’
Founders are emotionally attached to their ideas. But if customer feedback, sales data, and market signals indicate failure, ignoring them is riding a dead horse into the ground.
5. Opportunity Cost Becomes Too High
Every day spent on a failing venture is a day not spent on something with higher potential. At some point, you must evaluate whether continuing is worth it compared to pivoting or starting fresh.
How to Dismount a Dead Horse (Without Losing Everything)
If you realize you’re in this situation, here’s how to navigate it strategically:
1. Acknowledge Reality Quickly
Denial is expensive. The sooner you accept that your current path isn’t working, the sooner you can explore better options.
2. Evaluate the Core Problem
Is the business model flawed, or is it an execution issue? If the core idea still has merit, a pivot might work. If not, an exit strategy is needed.
3. Explore Pivots Over Shutdowns
Some of the most successful startups were pivots: - YouTube started as a video dating site before pivoting to general video sharing. - Slack was a gaming company before transforming into a communication platform. - Twitter began as a podcast network before shifting to microblogging.
Look at your assets—technology, audience, team—and see if they can be repurposed into something viable.
4. Cut Losses and Preserve Resources
If pivoting isn’t an option, exit gracefully. This may involve: - Selling assets to competitors or partners - Reducing costs to extend the runway for a new venture - Winding down operations methodically instead of suddenly
5. Learn and Move Forward
Failure isn’t the opposite of success—it’s part of it. Every failed venture provides invaluable lessons for the next one.
Final Thoughts: The Courage to Let Go
One of the hardest decisions in business is knowing when to let go. Society glorifies hustle culture, making it seem like quitting is failure. But real failure is wasting years on something that was doomed from the start.
As someone who has built and exited businesses, led startups, and now helped more than 150 founders build their brands, my advice is this:
- Be honest with yourself.
- Listen to the market, not just your gut.
- Move fast when something isn’t working.
- See every failure as a stepping stone, not a final destination.
Sometimes, the bravest thing you can do is dismount and find a new horse worth riding!
Btw, we had promised multiple freebies to our newsletter readers. So here's one. We have 5 licenses (worth $120) which would give you 6 months of FREE access to Perplexity Pro. Please reply to this email ASAP & we would share it with the first 5 people who ping us.
