In a business environment fraught with fragile market dynamics, entrepreneurial success can often seem like a gamble. Yet, a close look at the trajectory of most enterprises reveals a pattern, as much about the failed ventures as about the successful ones. While successful examples have a lot of lessons to offer, the failed examples, by revealing the factors that did not work, offer equally or perhaps more enriching lessons.
“It is fine to celebrate success, but it is more important to heed the lessons of failure.”
Words that ring true to anyone who has traversed the path of the entrepreneurship. Here, ironically, I am quoting someone who built the biggest tech company and navigated the entrepreneurial space as successfully as anyone could — Bill Gates, co-founder of Microsoft.
But it makes me wonder if these words would have gained any traction had Bill Gates not become Bill Gates. In other words, what if he had failed and joined the ranks of thousands of failed entrepreneurs, mulling over their experiences in quiet anonymity and gleaning wisdom from their retrospective insight? Would his words still make us pause and ponder? The answer, it would seem, is a resounding yes.
Unsuccessful entrepreneurs play an invaluable role, simply by showing the pitfalls to avoid. In nine out of ten cases, entrepreneurs fail, not because they do not have a good idea or product to sell, but invariably because of other factors, such as, being ahead of their time.
So what are the most common lessons that failed entrepreneurs can offer us?
Demand and supply
Well, to begin with, a product or an idea is only as good as its demand. Any entrepreneur who has tried and failed will tell you that for a product or an idea to work, it has to be very closely aligned with the potential customer needs. As Jeff Bezos, Founder, Amazon, rightly said, “focussing on the customer makes a company more resilient.” A brilliant product or service with no takers is as good as a failed product or service. A deep understanding of the target audience is crucial before entering a market with a product. Also, understanding the market size and gauging potential, offers for sustained growth.
Money mentality
The other crucial question that arises in any new venture is that of money and funding. Having learned the hard way about the mistakes to avoid while raising money, a failed entrepreneur would advise you to cough up enough funds to get your business off the ground, keep it going till profits start showing and also have a buffer in case of emergencies. This means reaching out to hundreds of investors and being able to find the right one— one who combines financial strength and empathy to see your business vision come true.
Right people
Now that you have a great offering that you know your customer needs, and enough funds to get it going, how do you get it off the ground and go to market with it? An unsuccessful entrepreneur made wiser by his failures will also tell you that the distance between ideation and execution, or between execution and distribution, is strewn with many different scenarios and possibilities. Sailing through them requires varied skill sets, all in synergy with the unified vision. This means onboarding the right team to successfully take an idea to market.
Great teams
Here the iconic Steve Jobs, CEO, Apple, sums it up best, “My model for business is The Beatles. They were four guys who kept each other's kind of negative tendencies in check. They balanced each other, and the total was greater than the sum of the parts. That's how I see business: Great things in business are never done by one person, they're done by a team of people."
Having the right team also means having the right expertise to market and promote a new product or service. Many great products and services failed to take off simply because no one knew they existed! In an age when optics are everything and crafting the right brand story can make or break a business, having on board the right talent is extremely important.
Of course, there are many entrepreneurs who had all of these going for them and yet failed to make it big. The reasons, in many cases, are hard to define. But to rephrase the title of a popular business and management handbook, a failed entrepreneur teaches you ‘what they don’t teach you in all the success stories’.
(The writer is Founder, Outsourced CMO & COHIRE.)