Does failure mean you’ve failed?
History is filled with stories of entrepreneurs who’ve failed at first. Bill Gates and Paul Allen started—and failed at—a computer company before they started Microsoft. Steve Jobs was fired from Apple; went on to start a new company, NeXT, that was widely considered unsuccessful; then was brought back to Apple and led it to become the most valuable company in the world. The founder of FedEx, Frederick W. Smith, while a student at Yale, got a “C” on a business paper outlining his idea.
Great entrepreneurs know how to fail
One critical key to entrepreneurial thinking is to learn how to think differently about “failure.” True, nobody wants to fail, but, for most entrepreneurs, some failure is inevitable. Or at least it is if you ever hope to succeed. Virtually all success depends on trying things that may fail.
Successful entrepreneurs possess the ability—or rather, the determination—to view failure as an opportunity to learn and then apply that lesson to their next business attempt. Indeed, many venture capitalists say they prefer to finance entrepreneurs who’ve already failed in at least one business, because they’ve learned a lot from failure. “Let them learn on someone else’s nickel,” one VC once said, recognizing that the best entrepreneurs learn from their setbacks.
Great entrepreneurs are good at failing. But there are different ways to fail. To succeed, try to fail the right way:
■ Fail fast. Try the minimal viable product approach. Develop things quickly, then get them out the door. You need real-world feedback from customers, users, and partners, to be able to fix your mistakes. Google’s product development mantra reflects this reality: “Experiment, Expedite, Iterate.” Other companies that grew quickly also embraced this kind of failure. One of Facebook’s mottos is “Move fast and break things.” To fail fast, give employees the authority to make decisions and act on them independently. They will make mistakes—fail. If things don’t work out, move on quickly—without a lot of criticism. Start, fail, change. Fast.
■ Fail forward. If you’re going to fail—and you will—fail in a way that moves your company, products, or services in a new direction. Failure only leads to success if you’re stretching yourself, trying new things, innovating. Remember, innovation doesn’t require perfection. It’s now a “version 1.0” world. There’s great tolerance for new products and services that aren’t perfect at first. Move fast and forward.
■ Fail smart. You don’t learn much, or gain much, if you fail because you’re doing something stupid and avoidable: partnerships imploding because of a lack of communication, employees unmotivated because they’re treated poorly, or management not taking care of business fundamentals, such as getting contracts signed or sending out invoices. Failure is only useful if you’re learning something from it.
Version 1.0
One concept that has taken hold in the development of certain products is the “minimal viable product.” The idea is to quickly get a product to market, and later make improvements based on the experience of actual customers.
Clearly you don’t want a minimally viable product for a medical device or automobile. But in some categories, such as online services, mobile apps, and personal electronics, consumers are willing—even eager—to pay for version 1.0.
■ Fail cheap. Try to keep your financial losses from a failure as minimal as possible. One way to do this is to start “lean”—try new things with the least amount of investment, to test the concept. The idea is to launch the “minimal viable” version of whatever you’re trying. Remember, it doesn’t usually have to be perfect to test a concept.
■ Fail with integrity. Character matters. Even if you fail, there’s a very good possibility that people who worked with you before—even invested in you—will be willing to team with you again in the future. But that’s possible only if you’ve proven to be a person they trust and respect. If you’ve failed because you are dishonest, because your word is not reliable, or because you cheat, then your one failure is likely to become permanent failure. Experienced and intelligent people will forgive your failures if they’re honest attempts to accomplish something.
Keep in mind, an unexamined failure is just a plain failure. You’ve got to learn from your mistakes and failures to grow.
The Advantages and Challenges of Entrepreneurship
It seems cool to be an entrepreneur. Movies are made about young entrepreneurs, portraying them as contemporary heroes. Being an entrepreneur seems exciting. The possibility of becoming fabulously wealthy is enticing. It seems easy to create the next big thing.
Yet, as in all things in life, there are advantages and challenges to entrepreneurship. And it’s wise to understand both as you consider becoming an entrepreneur.
Advantages
The advantages of entrepreneurship fall into three general categories: personal, professional, and financial.
PERSONAL BENEFITS
Many people focus on the financial rewards of being an entrepreneur, but much of the payback that people get from their entrepreneurial ventures is personal, increasing the possibility that you’ll derive greater satisfaction from your working life than you would as someone else’s employee.
First and foremost is the ability to do something that interests you. You almost certainly will choose to start a business in some field that attracts your attention. It may not be “sexy” to others—perhaps you’re finding a new way to crunch data, to manage mobile networks, or even to improve cleaning supplies—but it holds interest for you. It’s a great personal benefit to have the opportunity to do something you have a passion for, rather than spending the majority of your waking hours performing tasks in which you have little real interest.
Next, you get to create something of your own making. Being able to make something from nothing brings tremendous satisfaction. It can be something as simple as a food truck or a corner bakery, even being a self-employed consultant, but the idea of having created a job and a business yourself is highly rewarding and empowering and will give you a tremendous sense of pride.
Oprah OWNs up to failure
Hopes were sky-high when the extraordinarily popular TV personality Oprah Winfrey launched her own television network—OWN—in January 2011. But by the end of the first year, OWN was, by virtually any measure, a failure. Winfrey was committed to the long-term success of the network, however, and took a realistic view of her entrepreneurial failure, saying, “Who hasn’t made mistakes? The beauty is you can say, ‘I learned from that.’ I don’t worry about failure. I worry about, ‘Did I do all I could do?’”
You also get more personal choice over where, when, and how you work. Many people want to live in a particular geographic area—say, close to the mountains or by the ocean—or perhaps in a place where there aren’t an abundance of jobs. Creating your own business enables you to have more location choice. Having the independence and flexibility to make time for