Give yourself the chance to fail

How working at a start-up can give you the key to entrepreneurial success

From my experience, there are many fundamental differences between life in a big corporation and a small tech start-up. Many of these differences are obvious. Others are more subtle. Many are hard to realize without experiencing both environments.

Startups have less people, less bureaucracy and, more often than not, less money. There are fewer people to tell you what to do, there are fewer rules to follow and your budget will be considerably smaller than almost all corporations. Along with these differences, however, comes a freedom to create, to try things, to make mistakes and ultimately, to learn.

Startups don’t have all of the answers and part of any employee’s job is to help them figure out solutions to problems that are yet to be solved. Startups are hard but the opportunity to learn and develop new skills is unmatched anywhere in the corporate world. As Paul Graham writes in his 2004 book:

“Economically, you can think of a start-up as a way to compress your whole working life into a few years. Instead of working at a low intensity for 40 years, you work as hard as you possibly can for four.”

Working at a large corporation will teach you many important skills. Many of these skills will be transferable, in some form, to life in a start-up and will be part of the reason why you are hired and why you are able to succeed. However, there is one important thing that you won’t learn in most big companies which just happens to be vital for success at any young venture; the idea that it is ok to fail.

Failure happens a lot in startups, no matter what the size. It also happens in large corporations but the way it is handled could not be any more different. Of course, nobody sets out to fail and failure is never the optimal outcome to any situation but failure really is ok within reason.

Whether failure comes in the form of hiring the wrong person, chasing the wrong leads or even building the wrong product, it is inevitably going to happen a lot in a startup. Startups are trying new things, approaching new problems and are often operating in young or, even brand new, industries. Startups will get things wrong — even Google fails.

But failing is ok if it is appreciated and understood by those involved. Failing is the quickest way to learn in a startup. Failing means that you have tried something, it has not worked, but you have learnt that it was not the right approach in a particular situation or the right solution to your problem. You have learnt that employing an individual with this background may not be the right approach, that targeting businesses of a certain size is not right for this stage of the startup’s life or that this particular product is not solving a tangible problem. These learnings are key to your future success and failing must be grasped with both hands. The more often you fail the more likely you become to succeed and the quicker you fail, and learn from the mistakes that have been made, the more often you are able to fail. Hence the quote by Tom Kelly, GM at Ideo:

“Fail often so you can succeed sooner”

But of course, failing can be bad. It can be very bad. Failing over the long term is catastrophic and is often caused by failing to admit failure early enough, failing to learn from the mistakes made along the way or sometimes by not giving yourself the chance to fail at all. The best start-ups and the best employees are those that are able to fail fast, learn a great deal and to iterate away from earlier mistakes to a position where failure is a lot less likely and success shaped by previous learnings. There are very few start-ups that have not failed — it is how failure is treated that really matters.

Of course, large companies fail too. In fact, they fail often. You need not look much further than the publishing industry where many large businesses have failed to grasp the impact of the digital age yet failure in large enterprises distinctly different result and fundamentally different impact upon the company, its employees and often the industry as a whole.

Failure in large enterprises is slow. They already have customers, revenue and market standing. These do not disappear overnight and often hide the symptoms of failure until it is too late. Short-term goals lead to short-term thinking which in turn results in short-term decision-making that generates long-term failures. Failing slowly in a new venture is catastrophic as money runs out, potential customers are lost and employees look elsewhere for opportunities whilst failing fast provides a chance to learn, to adapt and often to uncover opportunities that were previously hidden.

Moo.com, an online business card company, offers the perfect case study in start-up failure. Richard Moross, Moo.com CEO, admits that the company learned from its mistakes and moved quickly in a new direction:

“I’m glad I made those mistakes, it was a huge failure.”

The company originally set out to take business cards into the non-business environment. However, they soon realized that people did not want a social equivalent of the business card but businesses did want an easier and more cost-effective way of procuring business cards. And so they changed course, pivoted, and are now a thriving enterprise.

Let’s end on a quote by Brad Feld of Techstars fame among other things:

“Give me the experienced entrepreneur whose last company was a failure 100% of the time.”

Despite the obvious hyperbole (I am sure he would rather invest in Mark Zuckerberg than the guy behind the now defunct layoffspace.com social network for the unemployed), his point is clear — failure provides an opportunity to learn things that books, courses and even his own blog cannot teach. We should embrace failure, learn from failure and fail fast such that we can give ourselves another chance to succeed before it is too late.