Perseverance is a virtue that comes in handy in a lot of situations in your life. Entrepreneur after entrepreneur has pointed to their grit and determination to succeed as a main reason they made it. From sports stars to business founders we venerate the idea of never giving up — even our entertainment relies on it — look at the success of movies like “Rocky.”
Rob Finlay has seen this in action. He’s a company founder himself, head of Thirty Capital, a holding company that includes a variety of CRE and technology companies. But Finlay has learned something else through his career: when to step away.
I sat down with him the other day to get his opinion on this pivotal question. When is it right to persevere? And when do you know it’s time to cut your losses and move on?
Knowing Your Strengths
“I’ve seen some people dig themselves into pretty deep holes over the years, and one of the biggest things that does it is not knowing their strengths,” says Finlay.
“You can destroy yourself pretty quickly by expanding too far and too fast into things you’re not prepared for. I’ve always been very careful to do what I’m good at, expand gradually and get other people to help with ventures I’m not personally experienced with.”
Being successful in one area of your life doesn’t necessarily qualify you for something else. Just because you’re a killer salesman doesn’t mean you’re going to succeed in software development. There are portable skills that apply across disciplines but each industry has its own unique style.
LEGO is a great example of a company that did this very wrong (and then did it very right). Jørgen Vig Knudstorp took over an almost bankrupt business in 2004. They were floundering under the weight of a scattered product line and multiple ventures like theme parks and video games that were dragging the company down.
Knudstorp cut unproductive product lines and stripped the company back to its basics. They cut loose the theme parks and video games and made them licensed, not directly run — both divisions were outsourced to professional companies in those fields.
LEGO is now one of the greatest brands in the world. And they got there because they recognized their strengths and cut loose what wasn’t working.
“The idea of ‘fail fast’ is key to being an entrepreneur,” says Finlay.
“In any new venture, we work up a proof of concept and do research first, but we have to know when to cut our losses and move on to something else. I’ve founded several companies over the years and we add resources as we go. We don’t just wait until everything’s just so before starting. There’s something to be said for seeing how the market reacts to your product instead of just focus group testing it.”
Finlay’s ventures include several different SaaS products, physical tool management systems, finance companies and more. He’s heavily diversified into different areas, and not all have worked out. But Finlay’s been able to pivot.
Knowing When to Step Away
“You only have so many hours in a day and so much attention to give to something,” Finlay explains. “You want every business to be successful, but if that actually happens you might find yourself underwater. That’s when you need to step away and hand it off to someone else.”
Finlay knows this very well. He founded Commercial Defeasance in 2000, then sold the majority stake in 2006. Since then he’s worked on many other businesses while still maintaining his minority stake in Commercial Defeasance. TCAM, RadiantGen and IMS are all ventures he’s been involved in over the years and sold to other investors.
“You have to analyze your position,” says Finlay.
“Sure, you might be able to make more money, but is it a reasonable investment of your time? Could you be more successful working on something else? Remember, too, just because you exit doesn’t mean you might not be able to come back later.”
Finlay knows that from experience too. In 2018 he reacquired Commercial Defeasance, taking advantage of the opportunity to get back into the field he started in.
It comes down to one question: what is the most efficient use of your time and money? Sometimes it’s worth it to make a little less but completely chop your time investment to focus on other things. Don’t get caught in the sunk cost fallacy.
Getting Back On Track
“Sometimes it’s factors outside your control,” says Finlay. “Other times it might just be you not being good enough, not prepared enough, maybe even dealing with personal issues and not devoting the time, energy and attention you need to. When that happens I need to reset.”
Different people reset in different ways. For some that may be a vacation away from everything. For others it might be creating something in a new industry or with a new idea.
Whatever that “reset button” is, you have to recognize when it’s time to step away — temporarily or permanently — and get yourself back to where you need to be. Finlay does. That’s one of the reasons he’s been successful.
Quitting isn’t always a bad thing. Neither is persevering. The important thing is knowing when to do either. Don’t put yourself in a bad situation by going down with the ship when you could find success elsewhere. Follow Rob Finlay’s example.
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