Changing direction can feel harder after a founder has invested money, time, effort and reputation in a business. One reason is escalation of commitment: continuing to invest in a course of action despite negative signals. Past investment can influence the next decision, but it is not the only pressure—and persistence is not automatically irrational. The useful question is whether the next commitment makes sense given what is known now.
What makes changing your mind harder after you build?
Building creates a decision history: a product, a team, a business model and a plan that may already have been shared with others. Research supports several mechanisms that can make it harder to stop or change course, but it does not establish that founder identity itself causes this difficulty. “Cognitive trap” is a way to describe the problem, not a diagnosis of every founder.
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Past investment can influence the next decision
A sunk cost is a past expense or investment that cannot be recovered. In principle, a new decision should compare the future costs and benefits of available choices, not try to justify what has already been spent. Yet an experiment found that people could escalate their commitment even when future returns and alternative investments were transparent. That suggests that simply providing more information may not eliminate the pull of prior investment; it does not mean that continuing is always wrong, since future prospects may still warrant it. Karlsson, Gärling and Bonini, “Escalation of commitment with transparent future outcomes”.
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Completion pressure can make stopping feel wrong
In a study of 340 participants, sunk costs and the perceived need to complete a project both influenced commitment, and the two effects interacted. A founder may therefore feel pressure not only to recover an investment, but also to finish what was started. The study describes participant decisions; it does not prove that the same effect applies equally to every startup. Moon, “Looking forward and looking back”.
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Action framing can make continuing feel like the default
Across four experiments, escalation was higher when continuing was framed as action and stopping as inaction than when the frame was reversed. The reported mini-meta-analysis effect was d = 0.37, with a 95% confidence interval of [0.21, 0.53]. This helps explain why “keep going” can feel like a decision while stopping feels like doing nothing, even though stopping is also an active choice. The experiments were not specifically tests of founders. Feldman, “When Action-Inaction Framing Leads to Higher Escalation of Commitment”.
What entrepreneur research does—and does not—show
A longitudinal study of 1,112 firms examined entrepreneurs’ reinvestment decisions. Its reported findings associated escalation with conditions including starting rather than purchasing a firm, having partners, expecting to use one’s skills, and overconfidence. These are associations from a study published in 1993, not a current estimate of how many founders escalate or proof that any one condition causes persistence. Shepherd and DeTienne, “Reinvestment decisions by entrepreneurs”.
A separate 2022 qualitative study interviewed nine women and 10 men who owned small businesses in Iran and had launched at least one product. Its small, specific sample can illuminate how escalation may be experienced in that setting; it cannot establish how founders generally behave. “Exploring the escalation of commitment to a failing venture in women and men entrepreneurs”.
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Prior investment alone does not show that a project should continue, pivot or stop. The decision turns on what the next commitment is expected to achieve. Continuing can be reasonable if current evidence supports a worthwhile future outcome, an experiment has defined learning value, or pivoting would cost more than continuing. Conversely, the fact that a project once made sense does not establish that it still does.
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Compare the live options using the same forward-looking questions:
- Expected future value: What outcomes are plausible based on current evidence, and how uncertain are they?
- Additional resources: What more time, money and attention would each option require, and what else could use those resources?
- Learning: Can a smaller test answer an important question before a larger or irreversible commitment?
- Reversibility and timing: What is the cost of delaying, and which choice is easiest to revise later?
- Evidence quality: Which assumptions are supported by observed results, and which remain hopes or interpretations?
These are practical decision aids, not a validated scoring system or a founder-specific intervention established by the cited studies.
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- Author: Bungay Stanier, Michael.
- Publisher: Page Two
- Pages: 244
- Publication Date: 2016-02-29
- Edition: 1
A practical reset before the next commitment
Research on project reassessment and go/stop decisions offers context for structured review, but it does not establish a universally effective protocol for founders. The following reset is a practical synthesis, not a tested intervention.
- Define the decision now. Write down whether you are deciding to continue, pivot or stop, and separate that choice from the original decision to build.
- Start with the future. List the strongest evidence about likely outcomes and the most credible alternative uses of the next block of time and money.
- Use an ownership check. Ask what you would choose if you were evaluating this opportunity today without owning the existing investment. Treat the answer as a prompt for analysis, not as a verdict.
- Set conditions in advance. Specify what evidence would trigger continuation, a pivot or a stop, and choose a date or milestone to revisit the decision.
- Invite an outside challenge. Ask someone who was not responsible for the original choice to question the assumptions. This is one possible safeguard, not a proven cure; replacing the decision-maker is not automatically better.
What research on go/stop decisions adds
Some relevant work examines reassessment in new-product development rather than startup founders. A 2014 study considered go/stop decisions among 137 R&D managers in a stage-gate setting; its participants and context should not be treated as a direct measure of founder behavior. Behrens et al., “What Keeps Managers Away from a Losing Course of Action?” A 2016 paper examined decision-maker changes and escalation in real-options contexts, underscoring that reassessment questions can be more complicated than simply replacing the person who made the initial decision. Moore and Staelin, “Do We Really Need to Change the Decision Maker?”
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