Perseverance May Not Always Benefit Companies

In the business landscape, it’s common for companies to cling to failing ideas, only retreating when presented with undeniable proof of their ineffectiveness.

A notable instance of this was Meta’s metaverse initiative. Following an investment of $80 billion over several years, the company declared significant changes in March 2026 that essentially marked the abandonment of its ambitious plan.

Conversely, many firms are adopting a different strategy by quickly detaching from failures rather than stubbornly adhering to a vision. For instance, Google discontinued its cloud gaming service Stadia when it didn’t gain traction, opting instead to repurpose the underlying technology.

Mercedes also abandoned its zero-sidepod F1 design upon recognizing it had reached a competitive impasse, while Slack transformed from a failed gaming app into a widely-used intra-office messaging platform.

These decisions weren’t driven by a tolerance for failure. Rather, executives detected signs of weakness early, faced uncomfortable evidence, and adjusted their paths before incurring greater losses. Essentially, they endorsed the concept of “failing fast”.

Read: Meta’s Zuckerberg plans deep cuts for Metaverse efforts

As business professors focused on sales performance and failures, we propose that this concept is crucial yet often misunderstood in our field. It isn’t about celebrating failures or lowering standards, nor does it grant leaders the license to abandon rigor or give up prematurely.

Fundamentally, it’s about fostering an environment for quicker learning: developing the managerial discipline to identify when a venture is likely to fail, halting before sunk costs deepen, and reallocating limited resources to more promising opportunities. This is a strategy applicable to any company, regardless of the stakes involved.

The Slack model

These days, Slack is ubiquitous, but few remember it was founded in 2011 as a multiplayer online game called Glitch that didn’t take off. The company, then known as Tiny Speck, shut it down in 2012, but through this process, leaders uncovered value in an internal communications tool they had developed solely for their own coordination.

This side project appeared to have potential in the growing team-collaboration software market. Consequently, the company pivoted, utilizing its remaining resources and talent to launch Slack in 2013. Since then, Slack has emerged as one of the fastest-growing enterprise software platforms, culminating in a $27.7 billion acquisition by Salesforce in 2021.

Read: Slack finds ways to fit in at the office, ahead of stock debut

Such stories are often framed as tales of perseverance, yet they truly exemplify disciplined quitting. Other notable examples include 3M’s unintentional creation of Post-it Notes (initially used as makeshift bookmarks); Shopify’s transition from selling snowboards to facilitating e-commerce infrastructure; and Instagram’s evolution from a jumbled check-in app to a streamlined photo-sharing platform.

Read: WhatsApp joins Instagram in selling new premium subscriptions

Together, these narratives imply that success hinges not only on persistence but also on the ability to recognize early when a commitment is no longer beneficial and to pivot to a more viable path.

Know when (and how) to fold ‘em

Despite this historical perspective, much of today’s business culture still disseminates a simpler message that grit guarantees success.

This mentality, however, can also nurture a sunk cost fallacy. Numerous examples of this trap persist in business lore: Blockbuster’s rejection of an offer to buy Netflix while expanding its physical model; Kodak’s invention of digital cameras overshadowed by its focus on its established film business; and the ongoing funding of the Concord supersonic airliner joint venture despite clear evidence of its unviability.

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All three enterprises ultimately went bankrupt after previously dominating their respective sectors. In essence, sunk costs conflict directly with the principles of failing fast. Our research emphasizes the advantages of quick pivots, indicating that the associated benefits extend beyond high-profile corporate transitions and into everyday decision-making.

Research in business-to-business sales, for instance, supports that opting out early from low-potential opportunities can enhance motivation and performance.

This approach, however, hinges on one key condition: executives and customer-facing teams must have a solid grasp of the company’s capabilities and customer desires—not viewing early withdrawal as a sign of defeat.

An additional clear pattern emerges from our research: the practice of failing fast is often structured to facilitate decision-making under uncertainty, encompassing three distinct stages. The origin of Slack serves as an illustrative example.

Read: The ‘sunk cost’ fallacy

The first stage involves gathering data that indicates whether a project is on track for success. These insights can stem from direct observation or gathered data. The aim is to create an early, evidence-based assessment of whether an initiative is gaining traction.

In Slack’s case, CEO Stewart Butterfield and his team observed through direct user feedback that Glitch simply wasn’t enjoyable. They also identified limitations that hindered a viable path for success in mobile contexts.

The second stage is interpreting the data collected—merging experience, contextual awareness, and analytical tools to differentiate between ideas worthy of investment and those that aren’t.

Structured approaches, such as comparing objectives to historical benchmarks, help ensure that evaluations are consistent and evidence-based rather than solely intuitive. Regarding Glitch, Butterfield processed the initial signals and concluded that, despite significant sunk costs, the game did not merit additional resources.

The final and most challenging stage is execution. When analysis suggests that an early exit is the most prudent choice, acting upon that conclusion can be difficult.

Withdrawing, even when persisting no longer makes sense strategically, can feel counterintuitive in an environment that rewards tenacity. Therefore, it is crucial for executives to advocate for smarter allocation of time, resources, and focus.

In Slack’s case, Butterfield acted on his analytical conclusions by discontinuing the game and redirecting internal technology to develop Slack—framing this ‘failure’ as a strategic reallocation.

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A lesson for everyone

The insights mentioned extend far beyond the realms of sales, startup culture, and Big Tech. Managers encounter similar dilemmas in product innovation, partnerships, and hiring—situations where the real threat is not failure, but the delay in addressing ineffectiveness. This is how robust organizations learn to fail intentionally.

This involves setting success and failure criteria from the outset, swiftly testing assumptions, and minimizing risks before commitments become costly. These are, in fact, universal principles that resonate across industries and levels.

As a poetic analogy, consider the sea. A skilled sailor doesn’t attempt to navigate every channel. Some waters may test their resolve, while others may reveal new paths. The best sailors demonstrate sound judgment by reading wind patterns early and adjusting course before a storm brews.

Business leaders face a similar choice. Growth arises from neither mere persistence nor reactive retreat, but from the awareness of when efforts cease to yield value.

Scott Friend, Professor and Schaefer Endowed Chair in Marketing, University of Dayton and Kumar Rakesh Ranjan, Professor of Marketing, EDHEC Business School

This article is republished from The Conversation under a Creative Commons license. Read the original article.