Every founder or business owner ends up staring down some version of the same uncomfortable question eventually, a product line, a hire, a market that isn’t converting, a partnership that keeps needing rescuing, and the honest answer about whether to keep going usually has less to do with the numbers than with how much has already gone into it. Economists have a specific name for the bias sitting underneath that hesitation, the sunk cost fallacy, the tendency to let money, time, or effort already spent influence a decision that should really only be about what happens next. A short round of Playsolitaire has become my own way of stepping back from exactly that kind of call for a few minutes before making it, since the pull of “we’ve already come this far” tends to be strongest right when a decision needs the clearest head.
Why Past Spending Keeps Getting Treated Like a Reason to Continue
Formal economic logic says only future costs and benefits should factor into a forward looking decision, since money or time already spent is gone regardless of what happens next. In practice, decades of research show people do the opposite fairly reliably, continuing to fund a struggling project specifically because of how much has already gone into it rather than despite it. Part of the pull, according to the researchers who first documented the effect carefully, is that walking away can feel like formally admitting the earlier spending was wasted, and most people would rather keep spending than sit with that admission. The bias shows up so consistently across contexts, and even across species in controlled lab studies, that it looks less like a personal failing and more like a basic feature of how decision making tends to work under pressure.
A Famous, Expensive Example
The clearest illustration is also one of the most expensive, the Concorde supersonic jet program, a joint effort between the British and French governments that continued receiving funding for years after it was clear the plane would never be commercially profitable. The pattern was so recognizable that economists sometimes call the sunk cost effect the Concorde fallacy specifically because of it. What makes the example useful for a much smaller business is the size of the mistake being roughly beside the point. A two person startup protecting a failing feature because of six months of engineering time already spent is running the identical piece of flawed logic as a government protecting a billion dollar aircraft program, just at a different scale.
A Cleaner Way to Ask the Question
The practical fix researchers and strategists tend to recommend is less about willpower and more about changing the question being asked. Instead of weighing how much has already been invested, the more useful version asks whether you would choose to start this project today, from scratch, knowing everything currently known about it. If the honest answer is no, the money or time already spent is not a reason to keep going, it is simply the cost of the information now available, and that information is what should be driving the next decision rather than the invoice history behind it. It is a simple reframe to state and a genuinely difficult one to apply in the moment a real project is on the table.
Making Space to Ask It Properly
None of this makes the decision itself painless, and it shouldn’t, a real team and a real amount of work are usually attached to whatever gets cut. It does help to have a clean break built into the process somewhere before the final call gets made, a few minutes away from the spreadsheet and the sunk cost pulling at the decision from underneath it. Stepping away, even briefly, tends to make it easier to ask the only question that was ever actually relevant, which is what happens next rather than what already happened.