Fail to Succeed
Could failure be a vital component in the formula for entrepreneurial success? Reyana Nacerodien explored this possibility. This article was first published in In Focus issue 10 magazine.
Serial entrepreneur, Richard Branson, amassed a following who are almost desperate to learn from his experience and replicate his success. One of his famous quotes relays, ‘You don’t learn to walk by following rules. You learn by doing and by falling over.’ He alludes to failing as a necessary step in the process for entrepreneurial success. Do we concur?
The idea of failure comes with social stigma. We’ve been programmed to consider failure negatively and to expect resultant unfavourable consequences only. Success and reward are seemingly synonymous, while their links with progress are assumed. However, many seem to hit a mental stumbling block when considering the idea of failure or indeed, failures, as steps towards that same progress, if not better. And there are many examples that demonstrate it.
These days, you would struggle to find anyone in the working world who does not know about Amazon. What few realise is that Jeff Bezos, the famous founder of the e-commerce platform, had to overcome a number of failures on his road to becoming a household name to the extent that he is now one of the biggest proponents of a culture of experimentation.
Flopped ideas like an auction site to compete with eBay and diversification strategies resulting in the launch of Kozmo.com and Pets.com that never quite drew the new customers they were, in Jeff’s words, ‘like getting a root canal with no anaesthesia. I’ve made billions of dollars off failures at Amazon.com.’ Today, he is hardly considered a failure.
Jeff Bezos is not alone in being an example of failure fuelling future success. Big names like Warren Buffet, James Dyson, Steven Spielberg and even Lady Gaga have their tales of failure to tell. What’s more significant is how they proverbially picked themselves up, dusted themselves off and moved on. Admittedly, that’s easier said than done and the stigma of failure can seem insurmountable.
ThinkYoung, the first of its kind think tank focusing on young people, has tackled this head on. Founded in Brussels in 2009 and having expanded to Geneva, Hong Kong and Nairobi, the non-profit organisation aims to make the world a better place for young people, by involving them in decision making processes and by providing decisionmakers with high quality research on key issues affecting young people.
ThinkYoung is convinced that entrepreneurs, whether prospective or experienced, are facing a mix of both social and institutional pressures that cast a shadow over their future entrepreneurial activities. From October 2013, it conducted the first research of its kind across with 1227 participants aged between 18 and 35 from across 30 EU countries, with the aim to understand young Europeans’ interpretations and perceptions of failure. It launched the campaign Fail2Succeed with the goal of changing the perception of business failure and of harmonising the bankruptcy legislation at European level.
According to the European Commission even though only four to six per cent of bankruptcies are fraudulent, public opinion makes a strong link between business failure and fraud.
ThinkYoung’s survey found that, in terms of personal growth, young people perceive failure positively but, in terms of reputation failure, it is generally perceived as negative. Data highlighted a striking gap – on the one hand, 83 per cent perceive failure as positive for personal development, more than 70 per cent would give someone who failed a second chance and 50 per cent prefer financing a project of an individual who has experienced failure.
On the other hand, 50 per cent are convinced that after failure future professional partners will perceive them negatively and 62 per cent think that individuals close to them will not grant them a second chance. Ultimately, 75 per cent are convinced that social expectations are the main cause hindering the recovery after a failure. ThinkYoung wants to change the cultural stigma surrounding entrepreneurial failure in Europe and says that policy should reward those who take risks, but Europe is often reluctant to give a second chance to those who have failed honestly.
ThinkYoung acknowledges that much of the change that’s necessary does not stem from new rules and regulations, but rather from a change in mentality among European citizens and economic actors. The ability to discern how much failure depends on luck and how much on the lack of personal abilities or personal mistakes is a key requirement for good leaders. Those who are able to embrace failure in an analytical and smart way can improve their ability to better discern luck and ability, thereby increasing their probability of success.
Failing the Right Way
What’s even more striking from ThinkYoung’s survey is that only 10 per cent of respondents relayed that they had experienced failure directly. This means, nine out of 10 young Europeans do not know how to recover from failure. US-based Neil Patel is co-founder of NP Digital, Crazy Egg, Hello Bar and KISmetrics. ‘Don’t be afraid of failure,’ he says and speaks from experience since he suffered two failed companies and was USD1 million in debt all before the age of 21.
Big names like Amazon, HP and Viacom call on him to help them out. Wall Street Journal calls him a top influencer on the web. Forbes says he is one of the top 10 marketers. Entrepreneur Magazine says he created one of the 100 most brilliant companies. Neil was recognised as a top 100 entrepreneur under the age of 30 by President Barrack Obama. A top 100 entrepreneur under the age of 35 by the United Nations. And the list goes on.
‘Learning from your mistakes as an entrepreneur means expecting to fail and being okay with that. More than okay, welcoming it. Take the lessons you learned from one project and move on to the next great idea. Failure doesn’t even have to mean the failure of your entire business. It could be just one aspect,’ Neil says and reiterates that failure is not permanent. ‘As long as you have an open mind, you can learn from every experience you have, whether it’s good or bad. Your goal should be to make your next venture more successful than the last.’
Neil regularly shares insights into his own experiences and associated processes as an entrepreneur. His personal approach not only embraces failure, but reminders of his past mistakes. ‘This might seem weird to some people, but I like to keep a list of all my mistakes. I don’t do it to torture myself about the past, I do it so that I’m always prepared for the future,’ he admits. ‘I look at my list to own my past mistakes and say: Yep, I really did that, or, I really messed that up.’
Too often people want to forget about their mistakes right away and move on, Neil observes. ‘But that doesn’t help you learn. When I look at my list, I’m reminded not just of what I did wrong, but how far I’ve come and what I’ve learned since then. Looking at my mistakes is a positive thing for me. I want always to be learning and growing. So, for me, keeping a list is essential,’ he adds.
Neil discovers that the road to success is often long and winding, ‘You need determination to get to the finish line. You also need to treat every experience as a learning experience. Your mistakes are the greatest source of learning you could possibly have.’ Like the many renowned entrepreneurs out there, he is a huge advocate of rising from failure and even using it as a launching pad for future success. ‘Be grateful for your successes, but never forget your failures. Successful businesses are built on the ruins of failed ones,’ Neil concludes.