Entrepreneurs love few things more than their own ideas. These sparks of inspiration fuel the endless hours entrepreneurs devote to their businesses, and they compel investors to open their wallets in the hopes of making these ideas come to fruition. But even the greatest ideas can’t overcome fundamental flaws.
In 2017 alone, many concept-fueled businesses have shut their doors. Beepi, a used car marketplace, was founded on a great idea but stumbled under bad prioritization. Quixey, a digital app assistant, folded as competition flooded the market. Yik Yak, an anonymous social network whose popularity was underscored by its young user base and a valuation nearing $400 million at its peak, shut down after cyberbullies ran rampant.
The failures of these well-funded companies sent ripples throughout the startup world. But failure itself isn’t the problem — the inability to let go of a beloved idea is. Being an entrepreneur is all about having a healthy relationship with failure.
Failing to fail.
Many entrepreneurs are so fearful of ultimately failing to create a profitable and sustainable company that they overlook the smaller failures that litter the path to success. Failure can also be found in the lackluster marketing campaigns, ill-conceived software updates and rushed hiring decisions that occur while trying to realize an idea.
I’ve fallen in love with a lot of ideas, but I eventually gave up or put on hold the ones whose weaknesses became so noticeable that even I couldn’t deny them. For example, my company, ONTRAPORT, held Implementation Days to provide strategy, copy and design services to support our clients in launching successful marketing campaigns. We knew small business owners would benefit from this additional insight on top of the capabilities our software tools offered.
This concierge service program met with some real success; we had a few deeply happy customers who were thrilled with the above-and-beyond efforts of our staff. A few cried while talking to our employees.
Meanwhile, we had thousands of people waiting. We had let the program veer off course while trying to serve individuals instead of our broader audience. I looked at the numbers and had a hard conversation with myself, concluding that although I loved the program, the business was suffering. These few happy people weren’t covering our costs.
To deliver on our mission, I had to serve thousands and that required putting Implementation Days on the chopping block. I now make a point to cancel programs at the end of each year if they don’t make business sense or don’t result in worthwhile ROI. Determining which ones make the cut, as well as how to rebound from such a loss, isn’t easy, but a few steps can soften the blow.
1. Clarify why an idea must be abandoned.
The financial devastation of throwing good money after bad can’t be overstated. If an idea was once successful but is now struggling, its owner must attach a dollar amount to its current failure. To come up with the full cost, determine how much each stage of the process costs, how much it costs to pay your employees to do that work and how costly it would be to replicate the process in the future.
Then, ask yourself, “If I have $1,000 to spend, what will truly get me closer to my goal?” You may determine that it’s worthwhile to have your designers and writers implement marketing strategies for your customers because the results will outweigh the labor costs. Or you may, like me, come up with an alternative that still supports the goal. In our case, we decided to offer templates with guidance about copy and design strategy, allowing us to provide similar value to our customers, but at scale.
2. Don’t abandon the lessons hidden in the experience.
Failure is hard, which is why most people don’t want to go through it. Even watching other people fail is hard. My 1-year-old nephew is on the verge of walking, but he keeps losing his balance and falling. But he’d never learn to walk if people kept grabbing him before gravity took hold. There’s a payoff to his pain.
Likewise, if you’re going to fail, you might as well make it worth your while. Write down the skills you obtained as a result of your failure. Get competitive with yourself: Compare the current version of yourself to last year’s model. What are you now capable of doing differently to lead your company? What do you know now that makes you more valuable?
I did this at the end of 2015, a challenging year for my business. I found lots of problems, all of which were our own design. I could see exactly why we’d managed to find ourselves in the position we were in. However, we escaped layoffs and grew the company by 3 percent. Looking back, I realized that I hadn’t prioritized data and analytics in my decision-making; I had failed to incorporate the right KPIs and how they were reported.
Today, everyone in the company receives a Daily Stats email first thing in the morning with what we call “cash the plane” KPIs. We then set up better weekly, monthly and quarterly reporting for each of our teams during our weekly leadership meeting.
3. Develop a grateful mindset toward failure.
The idea of thinking of failure with gratitude may feel like salt in the wound. But without the failures of 2015 that forced us to look at what we were doing, our company wouldn’t have uncovered and resolved so many issues that would have prevented us from becoming the scalable business we are now.
I didn’t just get comfortable with the list I’d made of the lessons I’d learned. I sat down with a colleague and put our lists together. There was overlap, but we’d each zoned in on different failures and overlooked others. That meant there was even more learning to be done. We adjusted our perspective and began embracing a new attitude: “How can we be open to that?” There’s no longer a penalty attached to failure.
We also put our work in perspective. In our line of work, unlike that of doctors or firefighters, people’s lives aren’t in danger when we fail. Remembering that makes it easier to absorb the beauty of failure — it’s part of the cost of learning, and it’s why you’ll be paid more down the line. Failing as an entrepreneur is a lot like surviving the grueling rigors of a difficult college program: You pay thousands of dollars, get no breaks and endure lots of pressure. But the “Is it worth it?” question is answered at the end, when you wear that experience like a badge of honor.
Failure resembles grief: The only way out is through. And that makes sense because failure means grieving an idea that didn’t pan out the way you’d hoped. But evaluating the data, embracing the lessons and adjusting your attitude ensures that your failure will pay off with a much stronger company that can take a few blows and remain standing.
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