When things get complicated or even get worse
Let us start with the emotional "low valley". First, keep the following in mind:
It is very difficult to achieve product/market fit. Even if you think you are the only one who failed, it is not. Every startup has to go through this phase, but not every startup can survive.
Entrepreneurs often blame themselves for failure, but it doesn't matter. It is very difficult. Everyone's entrepreneurial process begins with failure. You need to go to expect to face such a downturn because it is hard to avoid or circumvent.
Exiting, restarting, or performing a "significant" change, and other circumventions can't guarantee that you won't encounter such a low point again. It's just a delay, and it's inevitable. So instead of trying to avoid an unavoidable problem, let us think about how to overcome this difficulty.
Expect a dispute with your co-founder. When things are going smoothly, the co-founders will often agree with your decision, because the focus is on keeping the momentum up.
As for how to proceed in the next step, there will often be differences, and these differences are usually very meaningful.
It is up to you to quit. There are a lot of tools that you can use to fix a broken thing, the same for a company. You can change products and switch customer bases. At the same time, you can reorganize your company, reset your team, or even fire your co-founder.
As long as you want to continue, you can (usually) find a way to go. Whether you want to quit or not, it all depends on you. But don't naively think that you have to quit or start a new product to get rid of this difficult trough.
Loss of consumers, employee turnover, and the loss of co-founders do not mean that you have failed. When you move from one iteration to the next, people may fall out of your team. This is normal, it doesn't matter.
That's just part of what's happening, even if it makes you feel like you're failing, don't let it kill you. What you need to think is, will the new strategy make more sense than the old one? If not, then it is your failure.