If you’re going to do startup, you’re eventually going to fail. It will be shocking, painful, and costly. And until you’ve failed a few times, you won’t be ready for it, because failure is one of the most misunderstood topics in startup.
Let’s fix that.
Look, I’m obviously not the first person you’ve heard bang on failure as an inevitable outcome of startup, or for that matter any type of business. In fact, I’m willing to bet that you’ve also heard a lot of noise about how it’s good to fail, you need to fail, you will recover, and the business community will be right there waiting with open arms when you’re ready to try again.
Having done startup for the better part of 25 years, let me assure you that there’s a lot of truth there. But also a lot of little white lies.
Failure comes out of nowhere
About a month ago, I had an hour’s discussion with a co-founder of a compelling startup. During that call, I mostly listened as she talked about their model, their progress, and where they felt like they were headed next. It was all good, verging on great, and I hung up the phone excited to hear from her the following month.
Last week, she sent me an email. The startup was done. Just like that. So we hopped on the phone again the next morning.
The reasons for the failure were neither unique nor surprising, to me anyway. To her, they were like sucker punches to the gut. Basically, her company lost a massive contract they had spent a lot of time and money preparing for, and almost immediately after that, their largest investor got cold feet on their next round. It was a perfect storm that shrunk their runway from comfortable to zero.
Heard it. Lived it. More than once. Still felt awful for her. But not as awful as she felt.
What I told her was that this was a terrible thing that will become a good thing, if she plays it right. And that is indeed a truth. In my bio, I call myself a “multi-exit, multi-failure entrepreneur,” because if the failure part wasn’t there, I’d just be a bullshit artist. Those failures came for me well before any of the exits, and what I learned from those failures paved the way for those exits.
Don’t be afraid to fail
All those failures I went through on my way to success — Am I grateful I went through them? Yeah, sure. Would I want to go through them again? Hell no.
We’re told to chase failure without fear. This is even a mantra I try to instill in my kids as they cope with everything from their education to their sports to their social lives. But I’m also aware that when they get to failure, climbing back out of it is on them, not me. As a responsible parent, I can’t let them hurtle headfirst towards doom without giving them a heads up that doom is going to suck.
So you should be afraid to fail, at least a little. It’s that fear that’s going to partly fuel your motivation and drive. The key is not letting that fear completely influence risky decisions.
When it comes down to go-for-it versus lay-up, if you go for it every time, you’ll crash. If you lay up every time, you’ll lose. Fear can be a governor for a lot of those decisions.
There’s no stigma with failure
Yeah, there is. There is stigma with failure. It’s looked upon as a weakness and a blemish. I hate saying that, but I know from experience that saying failure is OK is one of the bigger white lies in startup.
Here’s what it comes down to. There are two parts to any support structure, in startup or in any other pursuit of achievement.
The first part is your personal support group. This is your friends, your family, your close associates, basically anyone who has more than just a financial or business outcome staked on your relationship. This group can and should back you through any failure, any mistake, and most letdowns. They have a vested interest in you as an entrepreneur or even as a person.
Example: My son can make as many mistakes on the baseball field as he wants — mental errors, lapses in judgment, even outbursts of anger or frustration. I’ve got his back and I believe in him and his ability to learn from those mistakes.
But if he makes too many mistakes too often, his coach will eventually stop forgiving and start benching, then cutting.
This is because his coach is in the second part of that support structure, what I call the machine.
In startup, the machine is your customers, your backers, your competitors, your partners, and basically everyone else in the business community. Navigating the machine is necessary in order for you to succeed. The machine can do great things for you and might even love you when you win. But the machine does not care about you.
Don’t get me wrong. The machine is not evil. In fact, most of the people who make up the machine are genuinely good people who, if they had that personal relationship with you, would probably fit into that former support group. But we can’t be friends with everyone.
Don’t expect the machine to give a shit about how you feel about your failure. But definitely don’t beat yourself up about how the machine reacts to you when you fail. The machine is part of the process, not a part of who you are.
Recovery 101: Get over yourself
I’m not a tough love guy, and this isn’t tough love, but the first step out of failure requires taking ourselves out of the equation. Don’t worry, there will be plenty of time for self-loathing later.
Obviously, the first thing we want to do when we fail is figure out how it happened and why it happened. But we shouldn’t dwell on it or try to fix it, not yet. For now, we just need to understand it.
Then, first things first — focus on taking care of the other people who wound up being collateral damage of your failure. These are the people who worked with you, for you, inside or outside your company, and those who believed in you enough to support you. That includes those in the machine.
Entrepreneurs who fail and scamper away are never heard from again. Those who start trying to repair the collateral damage are not only going to be held in higher regard, but are also going to find it easier to get past their own pain.
Turn failure into growth
There’s a really easy way to stare into the face of the daily impending failure that comes with startup, and that’s understanding that the majority of your reward in startup is delivered not in money, accolades, or even opportunities, but in personal growth.
Accolades fade — even the brightest stars of startup are only as heralded as their last exit. Opportunities can be traded off your name once, maybe twice, but those dry up too. And money, I can tell you, it doesn’t bring happiness. In fact, the more money you have, the harder it is to be happy.
Let that last one sink in, because a lot of folks blow that notion off.
Anyway, failure is a freaking treasure chest full of personal growth. Figure out what to take out of that treasure chest. Leave the rest of it behind.
Of course, we live in the real world, and personal growth isn’t a currency, so that philosophy only goes so far.
Figure out what you need in the immediate. Do you need to go right back to earning an income? Or can you take some time to recover and try again? There is no wrong answer. In the former scenario you’re going to have to find a job, in the latter, you’re going to have to make a job.
Either way, it’s time to wear that failure as badge of honor.
Let’s get down to the root of all business. If you’ve been able to get people to buy something you’ve made (or helped make), that’s a success. In fact, it’s far more success than the vast majority of people who try. And then, consider that the people who try are just a tiny minority compared to the people who never try even once.
Sure, failure isn’t something to flaunt, but it’s not something to hide either. It’s not fun, but it isn’t the end of the world. People will tell you all kinds of things about failure, from the blindingly optimistic to the over-dramatically dark. Just take it from someone who’s been there more than a few times: I understand that I had to fail in order to succeed, but I do everything in my power to not have to do it again.