Not so long ago, failing as an entrepreneur wasn’t very well perceived. You simply didn’t speak about it. It was considered a better option to work for someone else your entire life than trying out entrepreneurship and facing failure.
The tide has slowly turned these past few years, and entrepreneurial failure has become less and less taboo. Then, it became a star. Failure is now praised as a driver to learn key lessons during an entrepreneurial project. Entrepreneurs and start-up coaches all agree that failure is the starting point to business success.
At first glance, you’d think that fear of failure in entrepreneurship would have greatly diminished in the past years. But it’s actually the other way around. In the past 15 years, fear of entrepreneurial failure has increased by 12% in the general population (GEM, 2016). While failure is no longer taboo today, that doesn’t mean it scares aspiring entrepreneurs any less.
Knowing that fear of failure is what stops most people from becoming entrepreneurs, it’s important to continue to reduce the stress associated it. That battle is far from over.
While stories of valuable failures exist aplenty, I’ve decided to introduce the phenomenon on another lens entirely. Although it’s good to know that a failure won’t kill you, it’s also important to know that failure can actually contribute to success. We’ll therefore see how failure can be valuable in entrepreneurship. Why do we speak to it in a positive light? Why is it necessary to fail?
The first question to ask ourselves is this: what does it mean to fail on an entrepreneurial level, per se? Let’s check out its definition according to the Merriam-Webster dictionary:
“Failure: omission of occurrence or performance; specifically: a failing to perform a duty or expected action; lack of success: a failing in business”
Doesn’t really invoke anything positive, does it? By definition, failure is a negative thing. It’s in fact the opposite of success. The word failure therefore has quite a negative connotation. Yet, in entrepreneurship, failure is simply part of the process. It’s actually not negative; in fact, it’s an inevitable reality.
From the first tentative steps of a business project, an entrepreneur is destined to come across all sorts of challenges. Whether it’s the product, operations, marketing initiatives and tech solutions, entrepreneurs will face small, medium and big failures.
Knowing that fact, is “failure” really the right word to use to define these challenges an entrepreneur will face along the way? Wouldn’t hurdle, obstacle, reorientation, inefficiency or iteration better describe these challenges?
In entrepreneurship, there is a difference between small and big failures. For example, an inefficient marketing campaign would constitute a small failure, while bankruptcy would generally be considered a big one. We can therefore allow ourselves to rank failures so we can take a step back and look at them in a constructive way. A failing marketing campaign does not mean a failing business project. It’s rather the failed initiative among many others within a project that’s still alive and well.
Now, here are my questions to you: Are small and big failures linked? Do they influence each other? Does a small failure increase or decrease the probability of a bigger failure in the future?
Let’s go back to the failed marketing campaign example. Let’s assume you’ve invested 2 000 $ in this campaign and it didn’t generate any sales. It’s an almost certainty that you’d consider it a failure. And that’s completely normal!
That said, a step back will allow you this see this episode as nothing more than a learning opportunity. More importantly, the lesson you take away will be a key factor for you to avoid a bigger failure in the future, namely an even more costly but still ineffective marketing campaign, a decrease in clients or even, ultimately, insolvency for your business.
Overall, a big failure can be avoided by accumulating little failures you can learn from. In our example, an unsuccessful marketing campaign will become a key learning experience which will give the entrepreneur the knowledge to avoid one or multiple, much bigger, failures in the future. (To learn more about effective marketing for small budgets)
While we now see the difference between small and big failures, we can still have the tendency to think of a business project failure as the pinnacle of entrepreneurial failure. Yet, it still doesn’t represent the ultimate failure. Taking a step back again, we can realize that a failed business project can occasionally be considered as a learning opportunity within an overall entrepreneurial pursuit.
In other words, if your project doesn’t work out, this doesn’t mean that all your entrepreneurial project will also fail. Quite the contrary! A lot of entrepreneurs go through three, even four failed attempts before giving life to a successful project.
As it is the case with small failures, big failures should be considered within a bigger perspective, meaning someone’s entire entrepreneurial life pursuit, their professional and personal life as a whole, and even for their generation as well as the next.
Within a generational perspective, how much significance does a failed business project really have? With that step back, it’s quickly easier to see small, medium or big failures in more relative terms.
The entrepreneurial pursuit is an iterative procedure, which means it’s based on the principal of trial and error (Stuart et al., 2011).
Without failed attempts, entrepreneurs can’t fully know what works and what doesn’t. Whether we speak of the typical client, the industry, the business or even the entrepreneur themselves, the principle always applies. In other words, each component of the entrepreneurial project needs trials and errors to progress into the optimal options.
Who is more likely to buy the business products and services? How do we go about informing them of the product benefits? What is the optimal level of service we should provide them? These are some of the fundamental questions only the iterative process can answer.
As you can well see, what holds the most value in a business is knowledge and skills acquired through experience. These skills and knowledge underlie the good business decisions that drive small businesses to the top. Yet, this know-how and knowledge can only be acquired through trial and error. In other words, the ability to make good business decisions develops over various failed attempts.
In short, remember this: (1) Failure shouldn’t hold any negative connotations in your mind, (2) small failures move you away from big ones, (3) in retrospect, a big failure is rarely as big as you think, and finally (4) the iterative process is the basis of the entrepreneurial pursuit. Making mistakes is therefore the only sure thing about entrepreneurship. And this is why, my dear entrepreneurs, failure is necessary to success in business.
Written by: Jean-Philippe L’Écuyer, entrepreneur-in-residence, Futurpreneur Canada