Category: Success Advice

Beating a Dead Horse in Business: The Cost of Sticking to Failing Strategies

On By mehranmuslimiblogIn Business, Careers, Success AdviceLeave a comment

In the business world, one of the most common yet costly mistakes is the tendency to continue investing time, money, and resources into failing ventures. This phenomenon is often referred to as “beating a dead horse” — a metaphor that describes the futile effort of persisting with a strategy, product, or business model that is no longer viable. Despite clear indications of failure, companies and individuals often struggle to abandon unsuccessful endeavors, leading to significant financial losses, wasted opportunities, and stunted innovation. This article delves deep into why businesses continue this pattern, the psychological and economic factors behind it, and how organizations can identify and pivot away from doomed strategies.

Understanding the “Dead Horse” Phenomenon in Business

At its core, the dead horse strategy occurs when businesses refuse to acknowledge that an initiative, market trend, or product has run its course. Instead of pivoting, they double down, hoping that persistence alone will turn things around. This reluctance to move on can manifest in several ways, including:

  1. Investing in Obsolete Technology — Businesses that fail to adopt emerging trends and instead pour money into outdated solutions often find themselves irrelevant in the market.
  2. Clinging to Failing Business Models — Some companies resist adapting to changing customer behaviors, holding onto business models that no longer generate profits.
  3. Continuing with Poor Leadership — Keeping ineffective leadership in place despite ongoing failures can further entrench stagnation.
  4. Marketing to a Nonexistent Audience — Businesses sometimes continue marketing products to an audience that has either moved on or never existed in the first place.
  5. Refusing to Adapt to Market Shifts — When industry disruptions occur, businesses that resist change rather than evolve can find themselves on the path to extinction.

The Psychological and Economic Drivers Behind Sticking to Failure

Why do businesses persist in beating a dead horse? The answer lies in a combination of psychological and economic factors that create resistance to change:

1. The Sunk Cost Fallacy

This cognitive bias causes individuals and organizations to continue investing in a failing venture simply because they have already poured substantial resources into it. Rather than recognizing the need to cut losses, companies feel compelled to justify previous expenditures by persisting.

2. Fear of Admitting Failure

Admitting that a business decision was wrong can be difficult, especially for leaders who have publicly supported a strategy. The fear of losing credibility often results in prolonged denial and further investment.

3. Emotional Attachment to Ideas

Business owners and executives often develop an emotional connection to their ventures, making it harder to view situations objectively. This attachment can cloud judgment and hinder necessary course corrections.

4. Groupthink and Internal Politics

When entire teams or companies are invested in a decision, challenging the status quo becomes difficult. Employees may hesitate to speak out, fearing backlash or being perceived as disloyal.

5. Hope and Optimism Bias

Sometimes, businesses hold onto hope that external factors will change in their favor, such as believing that a failed product will suddenly become popular or that a declining market will rebound.

Consequences of Beating a Dead Horse in Business

Failing to recognize when to let go can have severe consequences for businesses:

  • Financial Drain: Continuing to invest in failing projects diverts resources from more promising opportunities.
  • Missed Opportunities: Companies that focus on the past often miss emerging trends and new markets.
  • Employee Morale Decline: Working on a failing project can demotivate employees and lead to higher turnover rates.
  • Loss of Market Relevance: Brands that refuse to innovate risk becoming obsolete.

How to Identify and Stop Beating a Dead Horse

Recognizing when a business strategy is failing and having the courage to pivot is crucial for long-term success. Here are some steps to help businesses make informed decisions:

1. Conduct Honest Performance Reviews

Regularly assess the effectiveness of business strategies through key performance indicators (KPIs), customer feedback, and market analysis. If the data suggests stagnation or decline, it’s time to reassess.

2. Encourage Open Dialogue

Create an organizational culture where employees feel safe voicing concerns and offering alternative solutions without fear of retribution.

3. Set Clear Exit Strategies

Having predefined exit criteria for projects can prevent emotional decision-making and allow businesses to cut losses at the right time.

4. Be Willing to Pivot

Successful companies recognize when to shift focus. If a product, service, or market isn’t working, exploring new directions can be more beneficial than forcing a failing initiative.

5. Embrace Failure as a Learning Experience

Rather than fearing failure, businesses should treat it as an opportunity to learn and evolve. Some of the most successful companies today, including Amazon and Netflix, have pivoted multiple times before finding their winning formulas.

Case Studies: Companies That Knew When to Move On

1. Netflix vs. Blockbuster

Blockbuster failed to recognize the shift from physical rentals to streaming, while Netflix adapted and thrived. Blockbuster’s reluctance to pivot resulted in its downfall.

2. Kodak’s Digital Misstep

Despite inventing the digital camera, Kodak continued to invest in film photography, ultimately losing its industry dominance to competitors who embraced digital innovation.

3. Nokia’s Smartphone Struggle

Nokia’s insistence on sticking with outdated mobile operating systems instead of embracing the smartphone revolution led to its decline in the market.

Know When to Let Go

Beating a dead horse in business is a common but avoidable mistake. Recognizing when a strategy is failing and making the necessary changes can mean the difference between stagnation and success. By fostering adaptability, encouraging critical thinking, and being willing to pivot, businesses can ensure long-term growth and relevance in an ever-changing market. The key to sustainability isn’t persistence in failure — it’s the ability to recognize and embrace change.

Smart investors check out a crypto’s utility

On By mehranmuslimiblogIn Bitcoin, Blockchain, crypto, Ethereum, Success Advice1 Comment

There are somewhere in the region of 4,000 cryptocurrencies to invest in, each representing a different blockchain project. When investment experts look at the array available, they don’t base their choice on price, they look at the utility.

When the exeperts talk about Utility, they are referring to digital tokens built on a specific blockchain ecosystem – most often based on Ethereum’s ERC-20 standard – which grants token holders certain rights. As Katharine Wooller, UK and Ireland managing director at crypto wealth-building platform Dacxi told Rich McEachran, “Any cryptocurrency is only as good as its use case.”

There is a tendency amongst investors to buy Bitcoin simply because it is the most famous cryptocurrency. But Bitcoin’s utility is limited to promoting financial inclusion and cross border payments. Ethereum on the other hand is the preferred ecosystem for building cryptocurrency projects. So, it is not hard to figure out which of the two has more long-term potential.

One of the issues facing investors, particularly retail investors, is that the digital assets they hear the most about and are therefore drawn to, are the “cryptocurrencies addressing or solving specific problems on a macro level,” says Roman Matkovskyy, an associate professor in finance and accounting at Rennes School of Business. But there are many, many more that offer solutions to more ‘micro’ questions. As Wooller says, “it’s essential to do your homework and spend time researching and analysing a coin’s long-term intended use,” usually via the project’s white paper that should be freely available online.

Of course, a coin may appear to have great utility, but that doesn’t guarantee it will be successful. What is required for that to occur, is demand for the coin’s ecosystem. Let’s not forget that there are over 2000 coins that have come and gone, their related projects dead due to lack of demand.

The meme coins, such as Dogecoin, are a good example of complete lack of utility. Yet, investors have poured money into them, resulting in a 12,000% gain for DOGE between January and May 2021. They may look good right now, but they won’t last, as they serve no purpose. Dogecoin was started as a joke, and that should really tell you all you need to know. Still, people buy DOGE because they hope for its value to skyrocket. It’s speculation rather than investment.

Where should you look for long-term investments?

For long-term gains based on utility rather than making a quick profit, experts point to Ethereum (ETH) as the top choice, because it provides a platform for developers to create apps and run them on a blockchain without the involvement of third parties.

Paddy Osborn, managing director of the London Academy of Trading, suggests three others with potential: Polkadot – a network that can support multiple different blockchains and enable them to work together; Internet Computer, which aims to disrupt the internet space by building a decentralised web platform that runs on a blockchain and vechain, which helps companies track their products safely and securely through each stage of the supply chain.

To conclude, nothing is certain, but if you’re looking for a solid, long-term investment, look for the cryptos that are showing the greatest level of user adoption and functionality.  

6 Steps to hiring a great web developer

On By mehranmuslimiblogIn Business, Careers, Digital Innovation, Success Advice, Tech, TipsLeave a comment

Building your brand online requires stylish web design and a website that works seamlessly. To achieve this you need a highly skilled web developer. At first, you may think that finding a great web developer will be an easy task, because there are so many developers available, but it isn’t as simple as that, as many have found out at great expense. So, here are six things you need to consider when you’re hiring a web developer.

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  1. What do you need the developer to do?

You need to decide what their task is first. Do you want them to work on the front end of your website or the back end? Or do you want them to do everything from A-Z? Front-end developers are more skilled in design; they code for ‘good looks’ with HTML and Javascript.  Whereas those who are better at back-end stuff, know all about databases and programming languages like PHP. The developers who can handle both are usually more expensive, but the upside of this is that there are no communication issues; you only have one person to talk to.

  1. Freelance or full-time employee?

There are plenty of freelancers available and this is a more flexible option. You can hire them on a per project basis, which is more economical than taking one on full-time.

  1. What’s your budget?

Website budgets vary greatly and the more complex the site, the more it will cost. Figure out your budget first and talk to the developer about what you can achieve with that. Also, be prepared to wait 12-16 weeks for a site to be completed, some may even take six months.

  1. Will you work well together?

When you are hiring a developer to work with you and your team you must consider how the person will get on in your company culture, even if they are freelance. Happy employees are more productive, so take time to assess the developer’s attitudes, enthusiasm and adaptability; it will save you time in the long run.

  1. What is their skillset?

You need to establish where they are strong and weak. Give them technical tests to complete, such as their proficiency in HTML, and ask questions like:

  • What are the benefits of using Javascript?
  • How do you devise a timeline for your projects?

Also ask to see their portfolio.

  1. Do they understand what you want?

The last step is essential because you need to be sure that you and the developer are on the same page. You should go over the following:

  • Reporting structure
  • Deadlines
  • Expectations
  • Tools
  • Payment

Hiring is always hard work, but it is worth the effort to get the right person, because that will pay off in the end in every way; in saving time and money and in building the brand that you really want. So, take the time to decide what you need first and then follow these steps to get the best web developer possible.

 

 

 

Tips on startup cash

On By mehranmuslimiblogIn Business, Careers, Success AdviceLeave a comment

Tips on startup cash

As an entrepreneur I am well aware that managing your cash flow in the early days of a business startup can be challenging. Not everyone has the comfort of a generous investor who provides a safety net, and those that don’t have sufficient liquidity need to take a ‘bootstrapping’ approach. This has saved many a new business from failing before it has barely begun and in my opinion, if you can rescue your business by yourself, you will be better prepared for what lies ahead. Therefore, I have put together 8 tips about the various ways in which you can bootstrap your business.

  1. Generate cash quickly

A business model that has the potential to generate cash rapidly is most likely to succeed if you’re bootstrapping and relying on your own finances. Not all business models will do this, so from the outset look at how you can bring cash in from the start.

  1. Watch your expenditure

Open a business bank account at the first opportunity. Using your personal bank account is risky because it is harder to keep track of incoming funds and outgoings. Discipline yourself to watch where cash goes and what demands more of it and when. There are free tools available that track spending and you should be monitoring your expenditure on a daily basis.

  1. Reduce personal spending

This is just common sense. You may have your own business but that doesn’t mean you can immediately start living the high life. You don’t have a salary as such, so think very hard about every purchase and only buy what is absolutely necessary. If possible, look at other ways to save money, such as reducing your rent by sharing with a friend.

  1. Do the job yourself

It would be lovely to outsource some tasks, but this is both an unnecessary expense and one that stops you from learning more about your business.

  1. Learn a new skill

This is related to the previous tip – if you don’t know how to perform a task that is required by your business, learn it rather than ask somebody else to do it. If you need to write code but have never done it before, now is the time to acquire the skill. You’ll save money and have a new skill.

  1. Learn the art of thrift

Apart from reducing personal spending, look at ways to reduce business expenditure. Make good use of all the freebies available, such as free versions of Dropbox and other online tools. Do you really need an office or can you work from home? Choose the latter first until you actually need to pay for premises.

  1. Invest in your website and business incorporation

This is one exception to the being thrifty tip. Make sure you use a respected incorporation service, because in the long term a shoddy service may come back to haunt you. Also, buy the web domain you want from Day One and build your brand around it from the start. It won’t cost less if you wait and you’ll miss the opportunity to establish your branding.

  1. Refuse to take ‘No’ for an answer

You might find that when you are small some suppliers don’t want to work with you. It’s essential that you build a personal relationship with these people, because by doing so you are more likely to get the service at a price you can afford. Tell them your story and what you are trying to achieve – appealing to people’s emotions is all part and parcel of running a business.

I can tell you that none of this is a walk in the park as they say, but if you follow these tips, the pay-off is considerable and you’re more likely to find you have a solid, long-term business.

I hope you enjoyed this and found it useful. Please subscribe to my blog if you’d like to receive an alert when I post new content.