Can a Startup Failure Actually Propel You to Success? A Close Look at Bouncing Back
In the entrepreneurial landscape, failure is often seen as the opposite of success instead of a stepping stone towards it. With over 90% of startups winding down, it’s evident that the journey of building a company is fraught with challenges and setbacks (source). Yet, it’s also a path paved with resilience, learning, and, ultimately, growth. As you navigate the aftermath of a startup’s closure or are contemplating moving on, it’s crucial to remember that this end could very well be the beginning of something new and even more impactful.
“My mother used to call failure a stepping stone to success, as opposed to the opposite of success. When you frame failure that way, it changes dramatically what you’re willing to do, how you’re willing to invent, and the risks you’ll take. I don’t mean you have to try to fail. That will take care of itself. But, in my own life, a key component of whatever successes I’ve had has been what I’ve learned from my failures.” — Arianna Huffington (Founder of The Huffington Post).
Learning from Those Who’ve Walked This Path
The tales of Reid Hoffman, Jeff Bezos, Evan Williams, and Nick Woodman shine a light on the resilience required to navigate the entrepreneurial journey. Let’s take Even Willians as an example. Before his success with Twitter (now X), Blogger, and Medium, he faced two startup closures with Odeo and Pyra Labs. Blogger, initially a side project of Pyra Labs, and Twitter, a project within Odeo, serve as prime examples of how the conclusion of one venture can indeed sow the seeds for the next (source). Williams’s experiences underscore the importance of leveraging the “unfair advantages” acquired through past ventures to navigate future market complexities with a renewed perspective.
The Unfair Advantage of Experience
A study by Ali Tamaseb (Partner at DCVC and author of “Super Founders”.) reveals that nearly 60% of CEOs and C-suite executives who have founded startups valued at over $1 billion brought prior founding experience to their roles. Many of these individuals had experienced failure in their initial ventures. For many of them, their first or even second startups failed. This statistic highlights the invaluable lessons learned from past experiences, regardless of their outcomes. Second-time founders are equipped with a clearer understanding of the startup ecosystem and an enhanced ability to navigate its ups and downs (source).
Ryan Hoover, founder of Product Hunt and investor at Weekend Fund, encapsulates this sentiment: “Second-time founders have more experience building, recruiting, raising, selling, and scaling a startup. They’ve encountered challenges that were previously invisible; unknowable to those without the experience. Their network is larger, opening doors to potential customers and future hires. And they have more credibility in the market, even if their previous venture failed. There’s a reason VCs pay a premium to back second-time founders.”
Embracing Vulnerability and Customer Feedback
Adam Forbes highlights the shift in approach often seen in experienced founders: “Second (and third, fourth, and fifth) time founders know there is no business without a customer, so everything starts here. They talk and talk and talk to customers. Non-stop.” This mindset of humility and openness to feedback contrasts sharply with the overconfidence sometimes displayed by first-time entrepreneurs. It fosters an environment of rapid experimentation and adaptation, key ingredients for a successful startup.
“We innovate by starting with the customer and working backwards. The focus is not the product, but the customer” — Jeff Bezos (Founder of Amazon)
The End Is Just a New Beginning
Closing your startup can evoke a whirlwind of emotions, but it’s crucial to see this not as the end of your entrepreneurial path but as a pivotal moment that shapes your journey ahead. As Winston Churchill once said, “Success is not final, failure is not fatal: It is the courage to continue that counts.” In the world of startups, this sentiment rings especially true. Each failure is a stepping stone, each setback a lesson, and every end a new beginning.
At UNWIND Ventures, we recognise the complexities involved in winding down a startup. More importantly, we believe in the potential that emerges in the aftermath of such decisions. Closing one chapter heralds the opening of another, brimming with new opportunities and possibilities. Let’s embrace the lessons learned and the spirit of resilience as you venture into the next chapter of your entrepreneurial journey.
