Entrepreneurs aren’t quitters. To succeed you need to be resilient, thick skinned and borderline crazy. You need to have just the right amount of delusion to believe you can succeed, spurring you on despite the absurd odds. But sometimes, you have to quit.

On the other hand, sometimes you need to pivot. Unfortunately, many entrepreneurs use the pivot as an excuse to remain delusional and shift their fleeting attention to something else, after the slightest setback. Alistair Croll calls this the “lazy pivot.” Truth be told, most of these “lazy pivots” aren’t really pivots, they’re “do-overs.” Pivots and do-overs work, but not when they’re done with a minimal amount of effort and rigor.

So, when should you pivot or quit?

It’s a hard question to answer, and for each individual it’s going to be a bit different. There are examples of entrepreneurs sticking things out through really dark days and coming out years later with an “overnight success.” Other entrepreneurs pivot or change businesses entirely and win. There are no absolutes. But speaking with an entrepreneur yesterday about this very topic, here’s what I suggested:

1. Be pragmatic and intellectually honest with yourself.

The best way to poke a hole in your reality distortion field is to use practical, straightforward tools to evaluate your progress. Take the Lean Canvas as an example. If you look at your Lean Canvas, can you honestly say you’ve got enough of the answers to keep going? Do you really understand the problem you’re trying to solve? Do you really know if the solution is right? Do you understand the channels to market? Do you have an unfair advantage?

Answer those questions with as much truth as you can muster and the patch is clearer.

Metrics can help as well. Here’s a rough draft of the Lean Analytics Cycle that Alistair and I are including in our book, Lean Analytics:

It provides a basic framework for focusing on what’s important, testing things, and then measuring results.

To pivot, you need to have learned something through your previous efforts that gives you clues as to where you should focus. You can’t pivot without some form of validated learning and new assumptions. If you don’t have new insight that gives you even a hint of a direction, you need to really question whether it’s worth continuing. Pivoting for the sake of pivoting isn’t the answer (although you can get lucky…)

Before you pivot, you still need to look at the emotional side of things.

2. Do you care anymore?

Let’s say you’ve found something interesting that you think you can pivot to from your current business. Before doing so, you have to ask yourself whether you’re passionate about the new idea/problem/market/etc. If you’re not, it’ll be tough to succeed, even if you have proof that pivoting is the right move.

I’ve met quite a few people (it’s happened to me too) that get so lost in what they’re doing, and they invest so much into it, that they actually forget why they got into the business in the first place. So as you investigate the potential of a pivot, you have to ask yourself, “Why am I even going to do this? Will I be passionate about this new thing?”

If the answer is yes, you pivot. If the answer is no, you stop.

Maybe you take a step back to reevaluate, give yourself some time to breathe and think … or maybe, it’s time to quit, admit defeat, lick your wounds and come back another day to fight the fight once more.

Pragmatism + Passion (or Lean + Guts)

Lean Startup provides the framework for helping you make honest, pragmatic decisions about your progress and what to do next. You know if you’re not making fast enough progress. You don’t need someone else to tell you that. And you know if you’ve gained any insights worth exploring further or if you’re at a dead end. The pivot is either there and fairly obvious or it’s not. If you get into fabricating pivots wildly, you need to rethink your strategy.

At the same time, entrepreneurs don’t do anything without their guts. We need our guts, our instincts and our delusions to drive us off cliffs without any parachutes. Guts matter; you’ve just got to test them. Instincts are experiments. Data is proof.

If you get to the point where you don’t know what to experiment on anymore, and you’ve lost your purpose (in terms of why you started the business in the first place), you need to seriously look at shutting it down. If you don’t know what to do anymore, pragmatically, but you’ve still got a fire in your belly for what you set out to do, take a break and look for a restart. Don’t hang on, experimenting for the sake of experimenting, pivoting for the sake of pivoting. Pivot when you know what you’re pivoting to, quit if you don’t.

As a quick aside, the book that Alistair and I are writing about Lean + analytics is almost finished! I’m excited (and nervous!) about getting it into people’s hands. Publication date is April 2013. In the meantime, you can pre-order it here: Lean Analytics: Use Data to Build a Better Startup Faster