From the Praxis blog, reposted here since I’m on the theme of failure lately.
Most new ventures fail. In fact, depending on how you define failure and what data you look at, entrepreneurial failure rates can be as high as 95%. That sounds terrifying. The costs of failure should not be overlooked when considering an entrepreneurial path. But neither should the benefits.
Data about startups end with the word failure. But what actually happens to the people who launch them? Is their life over? Do they come out worse than they went in?
When I was 19 my brother and I started our first business. We installed telephone and computer cables back before wi-fi made it mostly unnecessary. The business lasted less than a year. We had a few good jobs installing and terminating fiber optic cables (a service we sold, even though we’d never done it before. We learned. It’s not as exciting as it sounds), but many of our “jobs” consisted of me doing landscaping for relatives. I like to think I made their yards beautiful, but it was mostly charity on their part.
Novius failed. But I didn’t fail, and neither did my brother. I made a decent living for those nine months, I learned more than I’d ever learned, especially about people and businesses and how they operate (try cold-call selling people on data cable installation). Our few customers got a good service at a good price and were happy. A few relatives got some flower boxes. I learned how to have confidence in myself and my ability, even if the business I ran wasn’t going well – that was the hardest and probably most valuable lesson. We came out ahead. Not really financially, but in terms of being closer to where we wanted to be in life.
There are ventures that could wipe you out. There are ventures that could destroy your reputation, or your credit, or your relationships. But those are rare. Especially today when technology has made startup costs so low (Novius emails were @sbcglobal, because even ten years ago it was not so cheap to have your own email domain). Various crowdfunding and investment tools let you wait until you know you’ll reach a certain level of capital, or customers, before any real resources are at stake. The costs of entrepreneurial failure are falling.
The psychological costs remain high. You have to be able to see your venture as an exploration, not as an indication of your worth as a person. You have to simultaneously be so passionate about your idea that you can’t stop working on it, but so open about what might happen that failure won’t kill you.
If you make a go of it and fail, it is possible to reap amazing rewards in the process. The analogies are endless. 95% of first attempts to ride a bike probably fail. That doesn’t mean you shouldn’t ever ride a bike, or that you should wait until first-try success rates get higher.
If you are only interested in launching something that has a very high chance of success, it’s probably not a good idea to pursue it. Failure will ruin you. If, on the other hand, you are so excited about an idea, product, service, or vision that you feel you must give it a go even if it fails, just to discover for yourself whether it’s doable, then it’s probably not a bad idea to try it. Ask yourself, “If I knew this idea was going to fail, but I didn’t know how or why, would I feel better having tried it to learn those things than never having tried at all?” If the answer is yes, try it.
There’s a point at which repeated failures can begin to accumulate costs. If you’re the person who always has a great new idea you can’t stop talking about, then two months later you never speak a word of it but focus on the latest idea, it will diminish your credibility fast. The costs don’t come so much from failing, but from how you go about trying to succeed, how many other people’s assets you risk, who you blame and how you respond to failure.
Be real with yourself about the costs of entrepreneurial failure. But be real about the benefits too. How many people who make up the failure statistics are doing great stuff and living wonderful lives right now, in part because of the failure they created? Sometimes the best way to the next level is to fail up.
There’s no rush. Take time to immerse yourself in a lot of experiences, gain a lot of knowledge and self-knowledge, and poke your toe in the waters of the world a bit. If you get bit by the entrepreneurial bug at some point, be realistic but don’t fear the failure. It might be the best route to your goals.