[dhouston]

This is dangerous advice; failing fast is way better than failing slow. To get to (in your example) breakeven in year 2, you better be showing traction in year 1 after launch, or at least signs of life, which they were not. No one liked or cared about what they were building, and they wisely realized they had no idea what market they were really going after and (after several months' worth of learning) still had no evidence one even existed.

Given they're still at square one, if they identified a more promising market, they should go for that, and it takes a lot of discipline to admit that all that prior effort is sunk cost.