The Fallacy of Sunk Costs ...
The more you invest in something ... the harder it becomes to abandon it.
Not something you hear discussed here often ... and not anything I'm thrilled to be talking about ... but it's something I fell victim to ... and it was a painful lesson.
So I'm sharing.
Four years ago, I rolled up my sleeves and went all in on my first online enterprise ...
The nature of the project ... isn't important.
What is important (for purposes of this discussion) ... is that two years later ... I was completely sucked in ... and still miles away from the projected finished line.
I completely misjudged the magnitude of the project I took on.
In retrospect, I should have pulled out long ago.
But after investing years of time, money and labor into the project ... it was very (very) hard for me to pull the plug and call it a loss.
Psychologically ... I could not bring myself to do it.
I told myself ... this is just me pushing through a high barrier of entry ... which is good.
I can't quit now!
But in retrospect ... that's exactly what I should have done.
I know that (now) ... looking back.
But ... by some good fortune ... right before I was about to double down on my investment and dig my hole even deeper ... my law practice exploded.
By virtue of this development ... I could longer no afford to invest the time I knew I needed to make the project successful (assuming it even possible)
I had to choose one of the other ... the project or the law.
The money I was making in the law was far too lucrative ... so I put the project on hold.
"Temporarily" I told myself ...
Eventually, however ... the more time I put between me and the project ... and ... the more successful my law practice became ... the clearer my thinking about the project became.
I realized (looking back) how I got sucked in ... by the fallacy of sunk costs ... and eventually ... I made the call to permanently mothball the project.
It took me more than a year to make that call ...
But what if my law practice had not exploded ...? What if I had doubled down ...?
Scary thought.
The good news is ... my law practice is still booming ... and (oddly enough) much of what learned growing my online practice I was able to turn around and apply in my legal marketing.
So it wasn't all bad.
In fact ... much of what I gained from the online experience in part explains my new found success in law.
Life is good.
But as I think about my next online project ... and I've got one in mind ... I think about the fallacy of sunk costs ... and how I'm not getting sucked back into that bottomless vortex again.
Next time ... I will decide how much time and money I am willing to invest ... ahead of time ... before I get started.
I will fail or succeed -- fast.
In any event ... I guess the point of this thread is simply to say ... there is a difference between never quitting ... and not knowing when to quit.
And how difficult it is to pull out.
I learned that lesson the hard way.
The more you invest in something ... the harder it becomes to abandon it.
But ... this is a thread ... not a diary ... so I'll ask a related question:
Has this ever happened to you ...?
Have you ever fell victim to the fallacy of sunk costs ...?
If so ... what did you ultimately do about it?
What (if anything) do you do to avoid it ...?
The more you invest in something ... the harder it becomes to abandon it.
Not something you hear discussed here often ... and not anything I'm thrilled to be talking about ... but it's something I fell victim to ... and it was a painful lesson.
So I'm sharing.
Four years ago, I rolled up my sleeves and went all in on my first online enterprise ...
The nature of the project ... isn't important.
What is important (for purposes of this discussion) ... is that two years later ... I was completely sucked in ... and still miles away from the projected finished line.
I completely misjudged the magnitude of the project I took on.
In retrospect, I should have pulled out long ago.
But after investing years of time, money and labor into the project ... it was very (very) hard for me to pull the plug and call it a loss.
Psychologically ... I could not bring myself to do it.
I told myself ... this is just me pushing through a high barrier of entry ... which is good.
I can't quit now!
But in retrospect ... that's exactly what I should have done.
I know that (now) ... looking back.
But ... by some good fortune ... right before I was about to double down on my investment and dig my hole even deeper ... my law practice exploded.
By virtue of this development ... I could longer no afford to invest the time I knew I needed to make the project successful (assuming it even possible)
I had to choose one of the other ... the project or the law.
The money I was making in the law was far too lucrative ... so I put the project on hold.
"Temporarily" I told myself ...
Eventually, however ... the more time I put between me and the project ... and ... the more successful my law practice became ... the clearer my thinking about the project became.
I realized (looking back) how I got sucked in ... by the fallacy of sunk costs ... and eventually ... I made the call to permanently mothball the project.
It took me more than a year to make that call ...
But what if my law practice had not exploded ...? What if I had doubled down ...?
Scary thought.
The good news is ... my law practice is still booming ... and (oddly enough) much of what learned growing my online practice I was able to turn around and apply in my legal marketing.
So it wasn't all bad.
In fact ... much of what I gained from the online experience in part explains my new found success in law.
Life is good.
But as I think about my next online project ... and I've got one in mind ... I think about the fallacy of sunk costs ... and how I'm not getting sucked back into that bottomless vortex again.
Next time ... I will decide how much time and money I am willing to invest ... ahead of time ... before I get started.
I will fail or succeed -- fast.
In any event ... I guess the point of this thread is simply to say ... there is a difference between never quitting ... and not knowing when to quit.
And how difficult it is to pull out.
I learned that lesson the hard way.
The more you invest in something ... the harder it becomes to abandon it.
But ... this is a thread ... not a diary ... so I'll ask a related question:
Has this ever happened to you ...?
Have you ever fell victim to the fallacy of sunk costs ...?
If so ... what did you ultimately do about it?
What (if anything) do you do to avoid it ...?
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