Startups are hard, and failure is inevitable (for most entrepreneurs)
How we think our venture will pan out...
Try -> Success
Is often very different from how it actually happens...
Try -> Fail
Try -> Fail (but smarter)
Try -> Fail (but even smarter)
Try -> Fail (but REALLY smart)
Try -> Fail (NOW I get it!)
Try -> Success
This post by Billy Murphy talks around the idea that failures make us better as entrepreneurs.
What I'd like to ask you all is how do you deal with failure and stay on top of your game?
As an entrepreneur, I am an empiricist - I am curious to learn the nature of the world around me that no one has yet discovered. I use the scientific method and I treat my startups as a series of market tests (scientific experiments) to discover the unknown rules of the market around me. Sometimes I have to make a guess / prediction (hypothesis) about what the outcome of one of these tests (e.g. I predict that with my go to market strategy that I will sell 500 units ar a subscription price of $100/month in the first 90 days).
Then I run the test. Maybe I only sell 50 units; or maybe I get 1000. In both cases I predicted wrong, but I now have a data point. I refine my prediction model, make a new guess, and replicate the test and see if I am getting better predictions.
It is fair to say that my initial price and go to market strategy "failed" to achieve the expected or "target" value if I was expecting 500 and only sold 50. And that missed prediction has real significant impact on my revenue and burn rate and I might have to seriously curtail spending or layoff staff until I find a product-market fit that generates higher volumes.
But what "failed" was the strategy and the prediction. The experiment successfully answered the question it was designed to answer empirically. It just gave me an answer that is counter tonmy predictions.
More importantly, whoever made that prediction (in this case me) didn't fail me:a prediction was needed and one was given; only this one prediction turned out to be overly optimistic.
And even more important than that, is the that the (in this case me) is not a failure. Every person makes good predictions sometimes and poor predictions other times, and when you are dealing with the unknown your instincts (based solely on what is known) are far more likely to mislead you. Otherwise there would be no novelty in the world, no unexpected or surprising new opportunities and so no start-ups and entrepreneurs.
This last point about people not being failures is very important. It is especially important if the consequence of guessing wrong means cutting benefits, salaries and especially cutting jobs. It is important all the effected people know that they are not personally perceived as failures, and that the consequences of guessing (the unknowable future) wrong are not punishment for being wrong, just a necessary form of rationing to survive until better times follow.
This understanding, that people are never failures, only their intended actions can fail, also applies to me as a founder. I also remind my startup coaching clients, advisees, and mentees of this as well. Most of us feel personally responsible for the consequences that befall our employees / cofounders and their families, our suppliers and partners, and our investors and customers, when our own wrong guesses lead to rationing, layoffs, etc. I generally believe that feeling of responsibility is a good thing but we must maintain humility and need to reject the mantle of omniscient superheros who can protect people around us from the unknown dangers we face. Those around us deserve to know how dangerous and uncertain our mission is and that only hardy volunteers willing to share the risks should journey with us - and that there is no shame (and maybe great wisdom) if preferring the safety of the unknown. But we are the explorers, the discoverers, the pathfinders and the Prometheans and our nature compels us to enter great danger to bring back knowledge and fire, even if we get burned along the way. We seek brave companions who will join us in our adventures, fully aware of the risks, and the chance to pit themselves against whims of fate and to distinguish themselves by doing so.
Truth! "Success consists of going from failure to failure without loss of enthusiasm."
I watch the grand kids. At about one year, there is an attempt to walk.
They do not appear to be emotionally invested. they get up, step-step, fall. Sometimes they even laugh, smile and look up and around.
The adult humans who watch the 1 year old do not fret or show sadness as the step-step-fall pattern. They smile with appreciation because of the effort and learning experience.
What changed between then and the more "mature" age is ego and what we perceive are expectations.
In 1961 a band auditioned for a Decca Records deal. Decca Records rejected them , saying "guitar groups are on the way out" and "The band would have no future in show business,". That band was the The Beatles.
In 2003 a group of friends came together to start a gaming company. They made 51 games with no luck. Their 52nd game was Angry Birds.
Many more stories of failures by those with names you will recognize are here >
Along with a very inspirational video.
So I suppose you could say when dealing with failure - I remember when I was learning to walk and act a little more like a 1 year old. :)
I like what Thomas Edison said - "I discovered 2000 ways NOT to make a light bulb".
Failure only occurs if you learn nothing. Sure you can have your confidence shattered, lose money, etc. Not meeting your goals for success can hurt. But you choose what failure means. I would consider my company a failure if it was boring, even if it made money.
It can be useful to remember that in order to be good at something, first you have to be willing to be bad at that thing. As children we have a certain advantage - we're willing to fall down, so we learn how to walk, we're willing to mispronounce words, so we learn language. As adults, our need to "get it right" often impedes our ability to "get it".
When you learn that failure is essential to success, you start to be inspired and driven by your failures.
I feel compelled to mention that the path from failing to learning is not automatic.
Consider early failures as stepping stones to success. Failures will happen in life, you don’t have controlover them. But if you quit you will miss the ride and excitement of the journey. There is no point in returning to your comfort zone. It is but a safe place where there is no fear of failure, no threat, no danger.
After you fail, you should look for the reasons why you failed. You should make yourself a promise to not repeat your mistakes. You should try new things where you may fail again, but you should never quit the game.
People who quit make their decision out of fear. Fear of another failure, fear of uncertainly, fear of darkness. You should look at the bigger picture and take a conscious decision about your next step. Think about the core reasons why you started something which you eventually failedat. Don’t get distracted from your journey just because you missed the bus. You can always find another way to accomplish your mission.
It's perspective. When I was doing the retrospective on my first startup, I couldn't help but realize how much I learned. Yeah, I spent a ton of money, but the experience I got was worth it. Heck, it was probably cheaper than an university equivalent.
I believe the type of person who is a multiple-startup founder either sees value in failures or just doesn't care.