We are a food discovery startup which tells its user the best dishes to have in a restaurant. The initial growth and retention for us has been quite low and we have not been able to make a single $ in revenue yet. From the initial customer interviews, we were quite optimistic that the product has great potential, however, things are turning out to be opposite of what we anticipated. At what stage should we take the business decision to continue/discontinue the product?
I've been through this several times with my startups. In fact, you should expect to make this choice over and over again as you build this company.
The truth is, the decision is already made for you. Either your hypothesis about the market failed to prove valid, OR the experiment you designed to validate the hypothesis failed. Either way, you can't continue "the product" in its current form.
The real choice in front of you involves three dimensions: 1) market, 2) funding, and 3) intellectual capital.
1) Do you still believe there is a latent market need involving the mechanisms you listed (food discovery, restaurants, consumers)?
2) Can you afford to keep trying (and do you have the runway to get far enough to prove the market well enough to raise more money)? Put another way, can you afford to go long enough to prove your point AND get investment to scale if you do prove it?
3) Do you have the intellectual capital on your team to start over with a new solution (MVP) and a proper market test? Can you come up with a stronger solution?
If the answer to ANY of these is 'no', then stop.
If the answer to ALL THREE is yes, then keep going.
It's really that simple. Make this decision today. You shouldn't waste any more time.
Oh, and one last point. Don't beat yourself up about this either way. Sometimes these small failures are an essential precondition for innovation. In the future, try to build as little as possible to prove your point (sometimes you can get away with building nothing but a deck or a low fidelity prototype). Then the go/no-go decision doesn't seem so weighty.