"You are the true master of death, because the true master does not seek to run away from Death. He accepts that he must die, and understands that there are far, far worse things in the living world than dying." -- Albus Dumbledore, Harry Potter and the Deathly HallowsA comment by staunch on news.YC really clarified this decision for me. Startups are much like the archetypical Hero's Journey: there's the call to adventure, when you get the initial idea for it, there are sidekicks & partners, there are hopefully hands-off mentor figures, there are tests and tribulations and temptations, and if you're lucky there's a happy ending where the hero embraces his destiny, overcomes his competitors, and sells out for millions of dollars. Of course, this is real life and not a fantasy novel, so there's about an 80-90% chance that the hero goes broke and gets another day job, wiser and more skilled yet somewhat embittered.
The critical success factor, though, is that the hero first acknowledges all his doubts and fears and then embraces them. So yeah, failure is a very real possibility. In the storybooks, that means death. In startups, it merely means that nobody likes what you're doing and you're wasting your time & money, and you may go broke.
Big problems are scary. I've found that this has been a significant problem for me. I could do RejectedByYC/Bootstrapacitor in 3 weeks, because I just looked at it as a distraction from Diffle, so it wasn't important, so I could just throw things up on the screen and make it work. I could do Diffle, because once we had finished Bootstrapacitor, it was just a distraction from the game creation engine, so it wasn't important and I could get it up on the screen. I've slowed down markedly on the game creation engine, because this is what we've been wanting to do all along. What if nobody likes it? What if it flops?
This also answers the question Todd asked me: when are you gonna quit? And the answer is: when we run out of ideas. As long as we have something to do, why not do it?