I typically try not to give generic advice to startups. However, if there is one insight I share repeatedly, it is that if you fail, try to fail quickly.
Have the strength to learn from your mistakes, then guess what …. do it again, just better. By adjusting, trying different approaches and measuring what you have learned eventually you will get it right - depending of course, on how much beating you can endure along the way. Or you will realize it is time to stop, cut the cord and move to something else.
Here is how you know when it's time to hit the eject button. As soon as you have your plan in place and before you have guilted your family and closest friends (out of pity typically) into providing you with seed funding, set realistic and conservative milestones that you believe are very comfortably achievable.
Make sure that the timeline is set so that you can achieve them before running out of money and more importantly in a manner that when achieved provides sufficient proof points to attract outside investment money from "real investors", the ones that don't do you a favor but rather are financially motivated and want to generate a return. Also, make sure that the milestones are tangible and measurable without leaving room for interpretation, e.g. number of pilots, users, revenues… anything that is meaningful to an outside investor to judge your likelihood of success.
Most importantly, and here comes the punchline, if you don't reach any of your milestones, don't try to look for excuses. Have a come to Jesus meeting with yourself and your team, acknowledge your mistakes and have the strength to look objectively into the mirror and believe that you have another pathway or let go before it haunts you, financially and otherwise, … and it will eventually, trust me.
The other pathway "joker card" you may be able to pull is called "pivoting" the business, which isn't really so different to starting over, maybe with the exception that you keep your family's money for a bit longer, or whatever is left of it.
After all, you need to be willing to fail in order to succeed. No investor will hold this against you.