Failing to Succeed

Failing to Succeed

I'm convinced that starting a business in a free-market society is one of the best learning laboratories known to man. Where else does a person have the opportunity and the impetus to be constantly learning so many new things just to survive? In addition to the number and variety of learning opportunities, the "invisible" hand of the marketplace is a fair and consistent schoolmaster that doesn't play favorites and always responds with the appropriate "grade." Thus, while starting or running a business, you are never more than your bank statement or cash register away from knowing how well you are learning what the market wants. If you don't learn quickly enough, you will eventually fail--and many do.

There is a lot of discussion around small business failure statistics. Nobody knows for sure, but it is agreed that the number is large. The SBA says says 40% of new businesses go down in the first year. Eighty percent are gone within five years and another 80 percent of the remaining 20% are gone in the next five years. Given that 400,000 new ones start each year, that is a lot of failure. As I've thought about that (and yes, added to those failure statistics myself more than a few times) I've struggled some with exactly what is the right way to think about failure?

Let me say this straight up: I'm not looking to rationalize failure into some kind of moral success. My college football team, Brigham Young University, has had several rough years of late. This year they seem to have the tools to start consistently winning again. A few weeks into the season they took on Boston College, a ranked team at the time, and lost in overtime. We gained more yards, had more first downs and should have won. We didn't. Some called it a moral victory. Maybe--but it felt a whole lot like failure. A few weeks later we played TCU, another ranked team, this time the team got the job done and we won 31-17. It felt much better than losing. In any endeavor where the method of keeping score is known and agreed to in advance, not winning on the scoreboard is losing no matter how much you learn or how close you come. As one of my son's high school friends said the other day, "second place is just the first loser."

Having said that, there is much evidence to support the premise that failure can lead to success. Abraham Lincoln has to be the poster child for experiencing failure after failure before finally being elected President and masterfully leading the United States through it's most gut-wrenching experience. Were his failures a waste? He may have thought so at the time. In retrospect, it's clear that he was learning what he needed to learn in order to do his greatest work.

The innovation experts also encourage us to embrace failure as part of the creative process. Innovation Truth number 2 is apparently "pay people to fail" (if I wasn't having so much fun trying not to fail, I'd find me one of those jobs). And one of the things that makes Silicon Valley the hot bed of technology and business innovation is its willingness to forgive failures as long as one eventually succeeds.

Also intriguing to me, is the concept that those who don't do it for the money may be more innovative. Seth Godin did a post on the topic and named several individuals and companies as examples. He says, "when you try to make a profit from your innovation, you stop innovating too soon." Most of us have no option but to make a profit from our innovation because we have to support ourselves (those consistent market forces at work). But, if that weren't the case, would profit no longer be how we keep score? And would what we call business failure (lack of profit) no longer be a failure?

Final thought. If failure is so likely and there are valid benefits from it, why don't we plan for it?

"So how's work?"

"Well, I'm halfway through my failures. The first one was really something. We pulled out all the stops and completely 'crashed and burned' as they say. I'm hoping to get my second failure wrapped up by the end of next year so I can get on to my successful venture. This one is giving us some real trouble right now."


"Well our customers keep telling others about us, so we're selling more and even worse--we're making a profit!"

"Ah, I wouldn't worry about it. I'm sure you'll figure out a way to turn it into a failure. Have you thought about bringing in a few consultants?"

It's ridiculous I know, but sport teams practice, doctors do internships, and entrepreneurs jump right into the real game--there is no practice. Sure you can work for someone else and learn, but until you actually jump in and start doing it yourself, it's not real. And here is the really interesting thing: what makes it "real?" The risk of failure. Take away the risk of failure-- of losing your resources, your livelihood, your dream--and I guarantee you that you won't learn as much, you won't try as hard and you likely won't accomplish anything great.

Though we work like crazy to avoid it, the risk of failure is an integral part of being an entrepreneur and something that most of us will get a chance to face in one way or another. With that in mind, here are my 10 Tips to Deal with Failure:

  1. Avoid it--winning is so much funner than losing.
  2. Embrace it--when it does happen, quit avoiding it. You went through all the pain to get there, now accept the fact that it happened and learn everything you can from it so that you'll be in a better position to succeed at number 1.
  3. Never End on it--failure is only fatal to your career if you let it be.
  4. Uh...can't think of anymore. Rats--failed again!
Unhappy customers tell on average 22 other people. If you ticket price is $50 that is $1100 in revenue. How would you like to know before they tell 22 others? Learn more

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