“Success benefits the body, but failure develops the mind.”- Herb Cohen
There’s always a great deal of news coverage that draw many people with entrepreneurial spirit to venture into their own business. The media amplifies founders such as Mark Zuckerburg and Elon Musk, highlighting these Cinderella success stories. Stories of young entrepreneurs, kids almost, that have made it big and even some experienced entrepreneurs that have “broken” the market wide open. Entrepreneurs alike will often tout all of the urban legend successes they have “witnessed”. The draw of fame and a seat at the table with the likes of a Mark Zuckerberg (Facebook), and Travis Kalanick and Garrett Camp (Uber), is enough to make anyone get excited and chase after a dream. What we do not hear about nearly as often are the millions of start-ups that fail.
The harsh reality that faces start-ups is that 9 out of every 10 start-ups fail…that’s 90%! The 10 start-ups in that sampling are also the ones that even made it beyond the idea state to be tracked and considered a “start-up”. It’s almost impossible to determine the millions of ideas that are unable to even raise enough capital to get to the early stages. Taking into account all companies from early idea stage to the VC backed “start-ups” failure rates are likely to be closer to 99%. This means that only 1 out of every 100 start-ups will likely “succeed.” A quote that was highlighted on twitter by David Hornik, “Number of companies that get Series A funding in US in a year is fewer than the number of $1M lottery winners that year.” This truly shows just how difficult it can be for start-ups to succeed.
There are always those Million Dollar lottery winners, however they are very much the exception to the rule. Unfortunately, people have come to understand and accept this with the lottery yet still do not translate those odds when venturing out to start their own business. The key differentiator however is that the lottery is a completely random chance, whereas a business at its inception CAN have a chance to succeed and win the preverbal lottery. If businesses all have the same chance, what then separates the winners from the losers, the successes from the failures? How do we know if our idea is the next BIG ONE? What drives the success that is experienced by some seemingly odd businesses over others? It is all of these questions that we intend to shed light upon.
As a long time start-up supporter and an entrepreneur myself I have learned that failures can offer us much more insight than the successes we so often hear about. Perhaps one of my favorite quotes is from a book by Herb Cohen “success benefits the body, but failure develops the mind.” The simple statement rings so true especially when we begin to evaluate the success in the world of start-ups. The excitement that we feel when something goes well. That rush that is experienced after a big win. All of these are great experiences however they may not be helping us improve. Don’t misunderstand me, I am all about celebrating the wins. I do however firmly believe that an early stage company must also celebrate and understand it’s failures.
Although we are all driving to that dream of success, it is through our failures that we will learn and develop. Even within the life of a start-up, failures along the way help to develop a stronger company. Thomas Edison said it best in his famous quote ““I have not failed. I’ve just found 10,000 ways that won’t work” that first highlighted the value to learning from our failures and continuing on to experience success. In looking deeper into the failures of a product or a plan there a key nuggets that can help a company to really focus in and by working hard to overcome those failures or shortcomings, greater success can occur.
Let’s take Ford Motor Company for example. Henry Ford was a true entrepreneur and way ahead of his time. His name has become a staple in the automobile industry. The interesting part about Henry Ford however is that he actually built and failed at 2 other car companies prior to finally finding success with the Ford Motor Company. This “third times the charm” success is attributed to the many lessons learned through the failures of his first 2 ventures.
I myself have been intimately involved in 9 start-ups to date, 1 of which has been “successful” (so far) and have been an advisor to countless more over the years. My goal in writing this blog is to expose the harsh truth and the real challenges that start-ups can face, but also to encourage those brave and bold founders that failure isn’t the end, it is simply another step towards success. Keep dreaming, keep pushing forward and pay attention to the failures you experience as they will be what ultimately make you successful in the end.
