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> I feel as though I've invested too much time and energy to bail now. Look up Sunk Cost Fallacy. Also this related episode of Freakonomics is great: http://w

> I feel as though I've invested too much time and energy to bail now. Look up Sunk Cost Fallacy. Also this related episode of Freakonomics is great: http://www.freakonomics.com/2011/09/30/new-freakonomics-radio-podcast-the-upside-of-quitting/ http://www.freakonomics.com/2011/09/30/new-freakonomics-radi...

dkersten 13y ago
"Winners know which battles to fight and which to retreat from"
taigeair 13y ago
But if you think about it, you're probably going to need to work with them for a long while if you stay. So it's not the best idea to stay any longer if you don't respect your team.
- shortstuffsushi 13y ago
  This, to me, is most valid point. Even if the company does start putting cash in your wallet, if you don't believe in it, or the people leading it, or their business model, you're not going to be happy.
Cogito 13y ago
It's easy to presume that sunk costs should have no weight when considering the relative value of different options. For many endeavours a certain amount of investment is required before returns are seen - investments in time and money in particular. For this reason there is almost always a cost to be considered switching between endeavours. So, while I agree that throwing good money after bad is a silly thing to do, the consideration should be how much more investment is needed to make this endeavour profitable vs how much some other endeavour will take to become profitable AND how much it will cost to switch. You shouldn't weight how much has already been spent in this consideration, however you have to understand the impact existing investment has had on the road to profitability. Time and money already spent is a crude metric that lends itself to the Sunk Cost Fallacy, but considering the metric is not the same thing as falling victim to the fallacy. [EDIT] The following comment explains this really well through an example: https://news.ycombinator.com/item?id=5722032 https://news.ycombinator.com/item?id=5722032
- raylu 13y ago
  I think you misunderstand sunk cost. Sunk cost basically just says to always employ a purely-forward-looking strategy when evaluating costs and benefits. > vs how much some other endeavour will take to become profitable AND how much it will cost to switch. Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from?
  - Cogito 13y ago
    > I think you misunderstand sunk cost. Sunk cost basically just says to always employ a purely-forward-looking strategy when evaluating costs and benefits I don't think I misunderstand sunk cost, but perhaps I didn't explain my point well enough. I agree that you need to be forward looking, but whilst looking forward it can be important to consider existing investment. Existing investment is not ALWAYS worth nothing, so its value needs to be accounted for. Existing investment is also a metric that, whilst lending itself to entwining one in the Sunk Cost Fallacy, is an important part of answering the question "how much more investment is needed?" The sunk cost fallacy applies in a situation where previous investment has been lost. The typical example is in gambling, where each spin of the wheel is independent of how much you have already lost on the table. When in a startup, however, previous investment is not necessarily lost, so switching to a new one is (typically) not the same as continuing one you have already invested in. >> vs how much some other endeavour will take to become profitable AND how much it will cost to switch. > Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from? The cost of switching is a way of characterising things like lost earnings and payouts that are not directly related to starting a new endeavour. They are typically, though not always, constant regardless of the new endeavour being considered, and so it makes sense to keep them separate. Examples of switching costs: * paying out a phone contract; * loss of long service benefits (if someone is close to receiving long service benefits they will typically wait to receive them before switching jobs); * non-compete clauses.
- pyre 13y ago
  | For many endeavours a certain amount of | investment is required before returns are seen Compulsive gamblers tell themselves the same things. What is really needed is a objective view of the situation.

dkersten 13y ago

"Winners know which battles to fight and which to retreat from"

taigeair 13y ago

But if you think about it, you're probably going to need to work with them for a long while if you stay. So it's not the best idea to stay any longer if you don't respect your team.

shortstuffsushi 13y ago
This, to me, is most valid point. Even if the company does start putting cash in your wallet, if you don't believe in it, or the people leading it, or their business model, you're not going to be happy.

Cogito 13y ago

It's easy to presume that sunk costs should have no weight when considering the relative value of different options. For many endeavours a certain amount of investment is required before returns are seen - investments in time and money in particular. For this reason there is almost always a cost to be considered switching between endeavours. So, while I agree that throwing good money after bad is a silly thing to do, the consideration should be how much more investment is needed to make this endeavour profitable vs how much some other endeavour will take to become profitable AND how much it will cost to switch. You shouldn't weight how much has already been spent in this consideration, however you have to understand the impact existing investment has had on the road to profitability. Time and money already spent is a crude metric that lends itself to the Sunk Cost Fallacy, but considering the metric is not the same thing as falling victim to the fallacy. [EDIT] The following comment explains this really well through an example: https://news.ycombinator.com/item?id=5722032 https://news.ycombinator.com/item?id=5722032

raylu 13y ago
I think you misunderstand sunk cost. Sunk cost basically just says to always employ a purely-forward-looking strategy when evaluating costs and benefits. > vs how much some other endeavour will take to become profitable AND how much it will cost to switch. Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from?
- Cogito 13y ago
  > I think you misunderstand sunk cost. Sunk cost basically just says to always employ a purely-forward-looking strategy when evaluating costs and benefits I don't think I misunderstand sunk cost, but perhaps I didn't explain my point well enough. I agree that you need to be forward looking, but whilst looking forward it can be important to consider existing investment. Existing investment is not ALWAYS worth nothing, so its value needs to be accounted for. Existing investment is also a metric that, whilst lending itself to entwining one in the Sunk Cost Fallacy, is an important part of answering the question "how much more investment is needed?" The sunk cost fallacy applies in a situation where previous investment has been lost. The typical example is in gambling, where each spin of the wheel is independent of how much you have already lost on the table. When in a startup, however, previous investment is not necessarily lost, so switching to a new one is (typically) not the same as continuing one you have already invested in. >> vs how much some other endeavour will take to become profitable AND how much it will cost to switch. > Wait, what are these two costs? Aren't they the same? Where did the cost of switching come from? The cost of switching is a way of characterising things like lost earnings and payouts that are not directly related to starting a new endeavour. They are typically, though not always, constant regardless of the new endeavour being considered, and so it makes sense to keep them separate. Examples of switching costs: * paying out a phone contract; * loss of long service benefits (if someone is close to receiving long service benefits they will typically wait to receive them before switching jobs); * non-compete clauses.
pyre 13y ago
| For many endeavours a certain amount of | investment is required before returns are seen Compulsive gamblers tell themselves the same things. What is really needed is a objective view of the situation.