We hear that, as entrepreneurs, we musn’t be afraid of failure. It is a step and we must be able to rebound on it. We learn from our failures. Yes, indeed. But failure can have adverse effects, especially on our self-confidence.
Much has been said about the virtues of failure — it’s a learning opportunity, it happens to everyone, it’s character-building. Failure is becoming some romanticized rite of passage, invoking images of young entrepreneurs burning the midnight oil and yelling “Eureka!” I can say from experience that any entrepreneur who fails repeatedly before finding the golden ticket had better be ready to coat themselves in protective armor, because your stakeholders may not be as understanding of your failures.
I’ve often said that failure is a great teacher, but its lessons are too harsh. Entrepreneurs will fail all the time, yes, and there’s no alternative to failure. You can’t avoid it altogether. What you mustavoid, however, is letting it consume you and destroy your self-confidence. If you let yourself become afraid to innovate — to go for it — you haven’t just failed. You’ve become a failure.
Failure makes many of us less confident and less aggressive. We become gun shy. That’s not surprising. Unfortunately, the cold reality is that once you’ve failed as an entrepreneur, you need to have blind confidence and a healthy sense of aggression to prove to people that you actually cansucceed. You need to try again, and brace yourself to be criticized, lectured, doubted, and flat-out ignored by investors and sometimes even your own team. If at first you don’t succeed, you’re in for the fight of your life.
When I first started Bullhorn in 1999, our original concept was the product of some brainstorming between me and my co-founder. His idea was, “Why don’t we build a platform for people to display their creative work on the internet?” Then I added, “We could make it a marketplace for those people to get jobs.” Nobody had ever told us that this was a problem that needed solving, yet we thought it was a great idea. So did our original investors. In fact, when we took the idea to creative professionals, they really liked it as well. Unfortunately, when we took it to the businesses that were making hiring decisions, it was a total flop.
So our first business model failed. After a few months, as our cash dwindled, we thought up yet another problem that we could solve. Our investors loved that idea too. But, much like our previous efforts, we discovered that no one actually suffered from the problem we were out to solve. Our second business model failed, as well. Then the dot-com bubble collapsed. Our early investors quickly turned from loving their investment in Bullhorn to hating it and they shut us off from any additional capital. We decided to forgo salaries to stretch our cash. I was paying my rent by maxing out my credit cards. Then a business dropped in our laps. We met someone with a problem that needed solving and we were uniquely poised to solve it. We realized we had a game-changing idea on our hands: creating the first software-as-a-service applicant tracking system for recruiters. When our new product started to take off, we needed more money to get to the next level. Unfortunately, our investors looked at me like I was the boy who cried wolf and rejected the idea out of hand. The sales traction and momentum was not compelling to them in any way. They told us it would never be a big business. Fortunately, they were dead wrong, but we didn’t feel so confident at the time.
I had identified our winning product, but I was late to the game. So what did I do? Did I pick myself up off the floor, dust myself off, and power ahead? Not really. My team and I still had total faith in our concept, but the reality of having failed before made me nervous to take risks. I didn’t have the confidence to push my investors to support the idea and decided to essentially bootstrap the business, which worked, but cost us precious time. The business succeeded and the rest is history 13 years later, but we would be three times the size we are now had I been stronger.
We entrepreneurs are often good at one of two things — identifying when something isn’t working, or ignoring the risks and suspending disbelief. When you’ve failed before but now know you have the right idea to succeed, you need to silence your inner skeptic and then work to silence your outer skeptics. You’ve learned to identify failure. You know what it looks like. Now, you need to focus on identifying success. Once you’ve done that, you can move on to suspending your critics’ disbelief.
Just because you pursued the wrong idea once (or twice, or even many times) doesn’t make you incapable of recognizing the right idea. A calming dose of skepticism can be great, but as an entrepreneur, sometimes you just need to charge ahead, no matter how many times failure knocks you down.
(Source: Harvard Business Review)