With COIN’s Glorious Failure Innovation Challenge (their summit on August 28-29th) and some recent posts on risk and entrepreneurial failure by Venture Capitalists, Brad Feld and David Gold, I’ve been doing a lot of thinking about the role of entrepreneurial failure in our startup community. I’ve been pretty vocal about how my entrepreneurial failure has shaped me, but thanks to some words of wisdom from Carrie Van Heyst, she challenged me to think about how adversity to failure affects the broader global entrepreneur community. Here are just a few of the things I found:
- The Global Entrepreneurship Monitor has identified cultural adversity to failure as one of the key indicators of a country’s entrepreneurial potential. They have conducted a study to estimate the percentage of the population who view a fear of failure as a barrier to starting a business.
- In Sweden, their conformist culture is both a positive and a negative entrepreneurial force. It is not widely acceptable to be “different” and failure comes at a high social cost. However, once something starts to take off, their herd mentality makes it REALLY take off. Additionally, the country’s generous welfare system reduces the feat of financial failure for entrepreneurs and enables them to make more financial risks.
- A fear of failure is also a significant barrier to innovation within large corporations. This is also a plus and minus for startups. There are fewer opportunities to start a business within corporations, but corporations are likely acquirers because buying innovation allows them to innovate without taking the risk of early stage failure.
Through my exploration of failure, I am starting to think that a fear of failure and a willingness to fail are equally important factors of success. Which……probably explains why the US falls right in the middle of the The Global Entrepreneurship Monitor failure adversity scale. You have to be comfortable enough with failure to get started, but if there isn’t enough to lose, it is hard to keep going.
What do you think? And how should this shape our role and strategy as angel investors?
Should we only invest in entrepreneurs and fund managers who have a track record of success?
Would you invest in people who have only experienced failure, but have learned from their mistakes?
How many failed investments should we as investors allow ourselves to make?
….Any thoughts would be appreciated.
In closing, I’d like to pass on a few inspirational thoughts on failure that others have passed on to me:
From my mother: “You can’t finish a race unless you start, and walking is the worst case scenario.”
From my father: “If you don’t fall, you aren’t trying.”
From my lifelong friend Lauren Snyder: “I’m not lost. I know I am going the wrong direction.”
From Thomas Edison: “I have not failed. I’ve just found 10,000 ways that won’t work.”
From Winston Churchill: “Success is the ability to go from failure to failure without losing your enthusiasm.”
And lastly, from successful entrepreneur, Len Fassler (Brad Feld’s Mentor): “Just remember – they can’t kill you and they can’t eat you.” (unless you watch the local news :))
Any words of wisdom from you?