When to Close a Startup: Lessons from Amish Payments
Not every idea works. Here's how to know when to move on.
When to Close a Startup: Lessons from Amish Payments
Not every startup works. This is one that didn't.
Amish Payments was a payment processing solution for Amish and Mennonite businesses. The thesis was simple: these communities have thriving businesses but limited access to modern payment infrastructure. We'd bridge that gap.
It didn't work. Here's why, and what I learned.
The Idea
The Amish and Mennonite communities run serious businesses:
- Furniture manufacturing
- Construction and contracting
- Farming and produce
- Retail stores and markets
Many of these businesses do six or seven figures in annual revenue. But they operate largely in cash and checks because:
- Religious restrictions on certain technologies
- Distrust of mainstream financial institutions
- Lack of solutions designed for their needs
- Community norms around simplicity
We thought we could build payment infrastructure that respected these constraints while enabling growth.
What We Built
The product had several components:
| Feature | Purpose |
|---|---|
| Phone-based payments | No internet required, works on landlines |
| Check processing | Faster clearing for check-heavy businesses |
| Simple hardware | Minimal, non-intrusive devices |
| Community-first sales | Working through trusted community members |
We spent months building, testing, and refining. The technology worked.
Why It Failed
1. The Market Didn't Want It
This was the hardest lesson. We assumed the problem was access to technology. The real issue was that many businesses didn't want to change.
Cash and checks worked fine for them. The friction we saw as a problem, they saw as a feature—it kept things simple, maintained privacy, and aligned with community values.
We were solving a problem that wasn't painful enough.
2. Trust Takes Generations
Amish and Mennonite communities are tight-knit. Trust is earned over decades, not months. As outsiders, we faced an uphill battle regardless of how good our product was.
The community members we partnered with helped, but there's a limit to how much borrowed trust can accomplish.
3. Unit Economics Didn't Work
Payment processing is a volume business. The margins are thin, and you need massive transaction volume to make money.
The total addressable market—Amish and Mennonite businesses willing to adopt new payment methods—was smaller than we projected. Even with high penetration, the numbers didn't pencil.
4. Regulatory Complexity
Payment processing is heavily regulated. Building compliant infrastructure for a niche market meant the same regulatory burden as serving mainstream businesses, but with a fraction of the revenue.
The compliance costs alone made the business model questionable.
The Decision to Close
We faced the classic founder dilemma: pivot or persevere?
Signs It Was Time
Flat growth despite effort: We were working hard, but the numbers weren't moving. More sales calls, more marketing, more features—nothing changed the trajectory.
Customer feedback was lukewarm: Users didn't hate the product. They also didn't love it. Lukewarm is worse than hate—hate means you're solving a real problem badly. Lukewarm means the problem isn't urgent.
Team energy was dropping: The early excitement was gone. We were grinding, not building. That's a signal.
Opportunity cost was rising: Every month on Amish Payments was a month not spent on something with better odds. The other opportunities in our pipeline looked more promising.
The Conversation
Shutting down meant having hard conversations:
- With co-founders about walking away from shared work
- With early customers about discontinuing service
- With ourselves about admitting failure
None of these were easy. But dragging out a dying company is worse for everyone.
What I Learned
1. Validate the Problem, Not Just the Solution
We validated that we could build the technology. We didn't adequately validate that the market wanted it. These are different things.
Before building, I now spend more time on:
- Customer interviews (not just friendly ones)
- Willingness to pay tests
- Competitive analysis (including "do nothing" as a competitor)
2. Market Size Matters
A niche can be a feature or a bug. For Amish Payments, it was a bug. The market was too small to support the business model.
Now I look for markets that are:
- Large enough to build a real business
- Underserved enough to have opportunity
- Growing, not shrinking
3. Timing Is Everything
The Amish and Mennonite communities may adopt more payment technology eventually. Generational change is happening. But "eventually" doesn't pay the bills.
Being early is the same as being wrong, just with better intentions.
4. Failure Is Data
Amish Payments taught me more than many successes:
- How to evaluate market size realistically
- How to recognize when to quit
- How to shut down gracefully
- How to process failure emotionally
These lessons directly informed how we evaluate opportunities at Blackbox Holdings.
5. Move On Quickly
The temptation is to linger—maybe one more pivot, one more feature, one more sales push. Usually, this just delays the inevitable.
Once we decided to close, we moved fast. Wound down operations, communicated with customers, and redirected energy to new projects within weeks.
The Portfolio Approach
One reason I'm comfortable sharing this failure: it's one of many bets.
At Blackbox Holdings, we build multiple companies simultaneously. Some will succeed (DuckDuckSign, Alignmint). Some will fail. The portfolio approach means no single failure is catastrophic.
This isn't about avoiding risk—it's about managing it. Take more shots, learn from misses, double down on hits.
Advice for Founders Facing This Decision
Ask Yourself:
- Is the market responding? Not "could it respond"—is it responding now?
- Would you start this company today? Knowing what you know now, would you begin again?
- What's the opportunity cost? What else could you be building?
- Is the team still energized? Grinding through hard times is different from grinding through hopeless times.
If You Decide to Close:
- Move quickly: Lingering helps no one
- Communicate clearly: Customers, partners, and team deserve honesty
- Document lessons: Write down what you learned while it's fresh
- Take a breath: Before jumping to the next thing, process the experience
Looking Back
Amish Payments was a failure by conventional metrics. We built something, it didn't work, we shut it down.
But it wasn't wasted time. The lessons shaped everything that came after. The discipline to recognize failure early has saved us from worse outcomes on other projects.
Not every idea works. The skill is knowing when to move on.
Failure is part of the game. The founders who succeed long-term aren't the ones who never fail—they're the ones who fail fast, learn, and keep building.