Understanding and Accepting the Risk of Failure
The entrepreneurial journey isn't all sunshine and rainbows. It's like embarking on a roller coaster ride, where ups and downs are part of the thrill. Hopefully, the ups are large enough that help you propel yourself during the lows.
What I find important is to acknowledge that the risk of failure is very real. We normally don't discuss it enough, but it's important to normalize it to make a quicker regroup.
Common knowledge, perhaps poorly documented, states that roughly 90% of startups bite the dust. So-called deep-tech companies have a slightly more favorable chance of success.
Why do so many startups fail ? There's no one-size-fits-all answer, but common culprits include not pinpointing a real market need for the product or service, running out of cash, not having the right team on board, getting outcompeted, issues with pricing, partners, and costs, and last but not least, a product that just doesn't hit the mark.
In the previous chapter, we discussed the affordable loss principle and how it is used by entrepreneurs. The risk of a startup not succeeding (in the sense of becoming an organization that generates enough money to keep performing its main activities) is large. Having a clear perspective on what can be lost is crucial to deciding if it's the path you want to take at this moment, in this life condition.
These stats and reasons aren't here to discourage you. Quite the opposite, actually. They're here to give you a clear-eyed view of the entrepreneurial landscape. Forewarned is forearmed, as they say. So, let's roll up our sleeves, learn from the mistakes of others, and dive in with our eyes wide open. Remember, every successful entrepreneur you admire today has likely faced and overcome these very challenges. You're not alone in this.
Personal Reflection: Experiences with Failure and Lessons Learned
Alright, let's get personal for a moment. I've had my fair share of faceplants on my entrepreneurial journey. There were projects I was sure would be a hit, but they fizzled out.
Earlier I mentioned my experience with Python for the Lab and how I leveraged who I was , what I knew , and whom I knew . But that is only the bright side of the story.
At some point, I decided to focus on organizing workshops instead of developing software. I was tired of sitting behind a computer and troubleshooting bugs. I was convinced the workshops would address a common problem and people would rush to register for them. I went to find spaces in my city where I could organize them. Made a list of people that could be interested.
I started reaching out to professors, postdocs, and PhDs. I sent personalized message after personalized message. Started going international. But it flopped. I didn't manage to secure a single workshop outside of my existing network. It took years until someone reached out asking me to organize one.
I won't say I was devastated by the outcome, but I had a very clear deadline to refocus my life. While I enjoyed the freedom of working freelance the first year, if I couldn't secure at least one workshop per month by the end of the second year I would simply stop and look for opportunities elsewhere.
My entrepreneurial journey didn't end at Python for the Lab. I went on to create Dispertech , but that's a different story.
It's also not that gloomy either. The website I built, the book I published, they gave me (and still do), a lot of credibility in the space. It's been used (and copied without recognition) in university courses and in companies of all sizes (including Amazon).
It just didn't give me enough to keep focusing exclusively on it.
But here's the thing about failure – it's a heck of a teacher. One of my biggest 'aha' moments was realizing the absolute necessity of market validation. It's not enough to love your idea; your customers need to love it too. I learned to ask, listen, and adapt based on what the market, and what people were telling me, not just what I hoped to hear.
But perhaps the most valuable lesson from all these missteps was the importance of adaptability and continuous learning. The ability to pivot, take in new information, and change course accordingly, is invaluable.
Every failure nudged me towards this realization that the journey is about evolving , both as a business and as an individual.
Each failure was a stepping stone, albeit a sometimes painful one, towards where I am today. They shaped my approach, honed my instincts, and, ironically, gave me the confidence that comes from surviving and learning from setbacks.
There is no magical advice on how to learn from failure or tough times. You'll probably see it all around you, people making the same mistakes over and over again.
Perhaps the best is to listen mindfully to advice, finding mentors, coaches, and trusted advisors can be the biggest differentiator, provided that you are willing to listen to them.
Impact of Failure on Personal Life, Career, and Finances
Now, let's talk about the not-so-rosy side of failure, the part that hits close to home – literally. When I realized Python for the Lab was not going where I expected, it wasn't just a professional setback; when a personal project fails, it's hard not to take it as a personal failure.
The stress was like a constant background noise, self-doubt crept in, and let's just say it wasn't a fun time for anyone in my inner circle. Balancing work and personal life is tough when you are passionate about your project, and when things start falling apart it's hard not to bring those around you into the spiraling feeling of descent.
It's crucial to talk about these things , to not bottle them up. Having a support system, people who get it can be a game-changer.
It's also crucial to think about what comes next. If you want to stop the project, then what comes next. Having your eyes on something (a sabbatical, another startup, a job) is a good way of improving your mood and gaining momentum yet again.
Then there's the career aspect. In academia, a failed experiment is a blot on your record, a reason to doubt your capabilities. Depending on the moment of your career the impact will be different. During a PhD or postdoc, it can change your career path. PIs normally leverage many parallel projects to absorb the risks of a failed one.
But in the entrepreneurial world, it's almost a rite of passage .
It's like wearing your failures as badges of honor because each one teaches you something invaluable. Data shows that most successful entrepreneurs have in their careers a previous failed company. It's a different mindset, one that sees value in the attempt, not just the success .
Failing sucks, without a doubt, but it's never the end of the game for an entrepreneur.
And we can't forget about finances . When a business goes under, it's not just your time and effort that go down with it. There's often a tangible financial loss, and that can hit hard. That's when the affordable loss principle (discussed in Chapter 2) comes into play. If you have a clear threshold set since the beginning, then you already know what to expect. All the preventions you put in place will kick in.
The secret is being realistic . "One more iteration and I'll get it right" is a risky path.
Clearly evaluating what happened up to now, why things are not working, and executing your predefined strategy, the one you made when you were not in love with what you were building, are normally the best courses of action.
Navigating the choppy waters of entrepreneurship means being prepared for these impacts on your personal life, career, and finances. It's about building resilience, not just in your business, but in yourself.
Remember, every setback, and every failure is not just an ending. It's an opportunity to regroup, reassess , and come back stronger.
Strategies for Developing Resilience and Coping with Failure
In the journey of entrepreneurship, resilience isn't just a buzzword; it's an essential tool. Let me share some strategies that I've found invaluable in cultivating resilience and coping with failure.
Mindset Shift : The first step is a fundamental change in mindset. We must view failure not as a crushing defeat, but as an inevitable step towards success. I learned to see each failure as a lesson, a stepping stone that brought me closer to my goals. It's not about negating the disappointment of failure, but about not letting it define your journey. It's not easy and it takes time. More importantly, it takes people around you.
Support Systems : The importance of a solid support system can't be overstated. I've leaned heavily on mentors who provided invaluable guidance, peers who offered fresh perspectives, and family and friends who gave emotional support. These relationships have been my safety net, offering comfort and advice when things didn’t go as planned. Building and maintaining these connections is crucial. That is why I have always offered support to other entrepreneurs at different stages of their journeys.
In terms of reflective practice, taking time to look back at both successes and failures has been enlightening. This process helps me understand what worked, what didn’t, and why. I also learned that the process is different for each person, and talking to people who are not involved daily in our activities is sometimes the most impactful.
I also learned that I needed breaks of more than 2 weeks to free my mind. During the first couple of weeks, I found myself often still ruminating about daily challenges, but I was never disconnected. The third week made the difference .
It was that bit of extra time that allowed my mind to reach creative places and to fully recharge before coming back.
Engaging in activities that build resilience has also been a game-changer for me. Many people are in favor of mindfulness practices, regular exercise, and hobbies to disconnect from the stresses of work. In my case, I picked up sailing. I know it's not an accessible sport for everyone, but I found that it took all my focus. It was a time when no other thoughts were possible. I'm sure there is something you enjoy doing that takes all your headspace, even for a few hours a week.
These activities are not just pastimes; they’re vital for recharging and gaining clarity.
Risk management is another critical skill, but young startups can't normally implement full strategies. The difference between risk and uncertainty is that the first has a defined probability distribution of outcomes, while the latter is rooted in the uniqueness of the process.
Some approaches, like the one proposed in the Lean Startup , allow us to explore the uncertainty landscape quickly and somewhat efficiently . Developing the ability to identify, assess, and manage risks has enabled me to make more informed decisions. It's a balancing act. Focusing exclusively on problems will not allow you to move forward, being blindsided by optimism can kill a business.
A good team composition will balance both approaches: caution and optimism.
Maintaining a balanced lifestyle is essential for long-term success. Personal health and relationships often take a backseat in the hustle of building a business, but neglecting them can quickly lead to burnout.
I've learned that taking time for myself and my loved ones is not a luxury, but a necessity for sustained productivity and creativity.
Those who claim that starting a business should take founders' lives and that they should grind 24/7 are not doing anyone a service.
Lastly, embracing a philosophy of continuous learning has kept me agile and adaptable. I quickly found myself reading papers about topics I could barely grasp, but it was enough to trigger conversations at conferences. I focused on filling my knowledge gaps and expanding my footprint as much as possible. The biggest difference with my academic experience was the time limits I imposed myself.
Every experience, good or bad, is an opportunity to learn and grow. Staying curious and open to new knowledge and skills have not only helped me in my business but also enriched my life.
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