Much is made of the statistic that the half-life of a small business startup is 24 to 36 months. But I’m not sure that we’re doing the right thing by measuring the success of an entrepreneur by the longevity of the business. I think we need to encourage more failures.
Having gone through two short-term businesses (36 months and 18 months) that eventually triggered a personal bankruptcy, I can confidently say that I’ve learned more about entrepreneurship in my failures than with any course or coaching experience.
A very interesting article in a Russian blog about startups, Russia 2.0, examined the role of failure in Silicon Valley startups: “If one looks at actual time spent by entrepreneurs, as distinctively different class of people then salaried employees of successful startups that became big, they spend the most of their time and effort creating, enduring and recovering from failure rather then creating success.”
So what I propose is not necessarily to encourage is not more success, which limits innovation, creativity and resilience, but rather to encourage more churn. You need to do what Tom Peters calls “Fail. Forward. Fast“. Each time you fail, you gain valuable knowledge that will improve your chances of success.
You need to be continuously prototyping, testing, innovating, trying. Try things that are outside of your current area of expertise, take on a client you would not normally take on. But be ready to kill the project or jettison the client if things get out of control. Each time, do an “after-action” analysis of what you learned and what you can change.
The danger of aiming for success is that you will achieve the zombie-zone of mediocre success: just good enough so that you keep your head above water, but not enough so that you can declare victory.
So by assuming from the start that your best-made plans will go awry, you can learn to adjust your aim as you learn from your mistakes, and build something that eventually works in a big way.
The real-world measure of how good you are as an entrepreneur is not how long you have been in business, but how many times you’ve failed and got back up to try again. Long-term success is built on a solid foundation of failures.
For more information
From Dharmesh Shah‘s blog OnStartups.com: “Six Interesting Stats About Startup Success” http://onstartups.com/tabid/3339/bid/79/Six-Interesting-Stats-About-Startup-Success.aspx
Dharmesh links to an interesting paper: “Skill vs. Luck in Entrepreneurship and Venture Capital: Evidence from Serial Entrepreneurs“: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=933932 (Free PDF download) Note: I haven’t had time to completely read it yet but I wanted to share it with you because it looks very interesting.
Image: Photo by Dagny Scott (Fireflythegreat) on Flickr
Direct link: http://www.flickr.com/photos/fireflythegreat/2845637227/
Used under Creative Commons 2.0 licence