Many would be entrepreneurs don’t start their
own venture because they are afraid of failure. And quite frankly, they
have every right to be afraid. After all, we are constantly bombarded
by vague sayings like “9 out of every 10 startups fail” or “chalk up
your first startup as a learning experience”, or my favorite, “most
relationships and marriages can’t survive a startup”. After you hear
enough of these cliches, you soon start believing them.
The
problem is that these ideals are further reinforced by the various
entrepreneurship blogs out there that are telling everyone to fail
early and fail hard because that is how you learn. Everywhere we turn,
we are constantly reminded that statistically speaking, there is an
extremely high probability that your first startup is going to die so
it’s better to get that first failure out of the way.
Seriously
folks…If I went into a startup believing that it was going to fail,
then why the heck would I risk the money and heartache in the first
place? Would I really want to spend all of my time on a business,
potentially destroy my social life and personal relationships just so I
can gain a new learning experience? No way! If I’m going to do
something, then it’s going to have a high probability of success.
Failure Is Misinterpreted
The
main problem is that the term “failure” is way overused and rarely
defined. To me, the term failure in an entrepreneurial context is far
different than that of failure in a more traditional sense.
For
example, outside of entrepreneurship, failure simply means to give up
or to be unsuccessful. Sally opened a flower shop, didn’t make enough
money and decided to close up her shop. Game over. She failed.
Rick challenged Gary to a game of 1-on-1 basketball and lost. Rick failed to beat Gary.
In
any case, you get the picture. Failure in a traditional context is just
that…you are unsuccessful at something you have tried to do. But
something magical happens when we talk about “failure” coupled with
entrepreneurship. Failure becomes a good thing and you know why? It’s
because failure has a different definition altogether in the world of
entrepreneurship.
Failure Means To Experiment
Failure
is just a way we entrepreneurs gather data. When my wife and I were
trying to decide what to sell, we tried selling many different things
on Ebay and Craigslist. I went through this phase where I was buying
computers on Craigslist, stripping them down and selling each part
piece by piece on Ebay. This little experiment netted me very little
money for the effort I was expending so in fact it was a “failure”. It
just wasn’t worth my time so I stopped doing it.
When
my wife first wanted to sell embroidered goods, she tested out over 30
designs, but very few of them ever sold. So you could say that roughly
90% of her designs failed.
When my wife and I made our
first inventory purchase for our online wedding linens store, 50% of
the items we bought never sold and are still gathering dust on our
shelves. Our first purchase was a failure because we bought too many
items that were undesirable to our customer base.
Even
though my first venture was a 100% failure, my wife’s designs failed at
a 90% rate and 50% of our inventory was unsellable, these didn’t feel
like real failures to me. It’s because as an entrepreneur, I considered
every failed experiment a success because it brought me that much
closer to finding out the right thing to do. By finding out what didn’t
work, my wife and I could stop wasting time going down the wrong path.
Failure Means To Adapt
When
an entrepreneur fails, it’s not the end of the business but merely a
detour. When one path is blocked, entrepreneurs adapt and find new ways
of doing things.
My wife and I hit so many roadblocks
with our online store that I’ve since lost count. But looking back,
probably our biggest failure was that we targeted the wrong set of
customers and the wrong target market when we first launched. This was
a big deal because we tailored our entire website towards these
customers who didn’t want to buy from us.
Without
going into to much detail, we initially targeted our linen products
towards embroiderists looking for materials for crafting projects.
Because we wanted to do as little manual work as possible, we tried
selling our goods with no value added to the end consumer. In a
nutshell, we simply repackaged the goods from our vendors and tried to
sell them directly just like every other store.
Turns
out that most embroiderists prefer to purchase their embroidery
materials from one stop shops. Sure, we had the largest selection of
handkerchiefs but we couldn’t compete because we didn’t sell anything
else. In addition, the margins for embroidery supplies was not very
high either.
In any case, when we found out that
targeting embroiderists wasn’t working, we did a 180 and positioned
ourselves in the wedding market which worked out much better for us.
Failure Means To Bounce Back
Nothing
ever goes according to plan. You can’t predict the future nor can you
anticipate all of the little things that will happen. The most
important thing that defines failure is the ability to bounce back.
The
marketing plan for our online store was a textbook example of failure.
We kept trying every method to get traffic to our store, and when one
method stopped working, we simply went onto the next. Looking back,
there were many dark days when we both wondered whether we were wasting
our time, but gradually, our business eventually picked up. While it is
difficult to quantify exactly which marketing tactic was the most
effective, I can say that collectively, all of our marketing efforts
did make a difference.
Especially with web based
businesses, websites need time to sink in and to be indexed by the
search engines. Sometimes, all it takes is perseverance and faith.
Think Like An Entrepreneur
When
failure is cast in a different light, it doesn’t seem so bad right?
Instead of listening to the statistics or falling for the negative
hype, go in with right attitude and you’ll eventually discover what
works.
By Fried James
