It is no surprise that most new businesses fail, whether started by first-time entrepreneurs or seasoned founders with prior successful exits. Indeed, launching a company is risky business and the odds are stacked against every start-up. Given that reality, in developing a new business, one might believe that failure is okay.
Several weeks ago, I had an opportunity to interview a candidate for employment at the company I co-founded, Consero Group, which focuses on creating senior-level executive events. One of the selling points that we use in recruiting is the start-up environment, complete with mismatched carpet, a ping pong table that doubles as our conference table and a passionate team that enjoys working together. During interviews, the appeal of the start-up always arises. But in this case, the candidate expressed his interest in our start-up a bit differently than usual. In particular, he told me that he was excited to have an opportunity to take risks and be creative in an environment where failure is okay.
He didn’t get the job.
In fairness to this candidate, plenty of others casually use the F-word in talking about start-ups. For example, I recently attended a meeting at my alma mater, the University of Maryland, which is leading an effort to bring more innovation and entrepreneurship to the D.C. area. During the meeting, I listened while several entrepreneurs and academics discussed our mission to create new businesses on campus — a safe environment where students and faculty need not fear failure.
While I could not be more of an advocate for entrepreneurship — perhaps our most powerful catalyst for technological innovation, job growth, and economic health — I took issue with this trivialization of failure. In my view, start-up founders must be intolerant of any notion of failure in creating a business. Otherwise, respectfully, they have no business in entrepreneurship.
To be sure, there is no inherent dishonor in managing a start-up that goes down in flames. Most entrepreneurs fail, and I have certainly experienced my own intense challenges of various kinds in business. My point is about the mentality of the entrepreneur, rather than the end result. An entrepreneur’s early, unwavering confidence in the business is critical to the start-up’s success. He or she must believe with certainty from the start that the business will work, and be prepared to give everything necessary to achieve that result, knowing that the effort will pay dividends later. Failure simply cannot be among the list of conceivable outcomes contemplated before launch.
The importance of the right opening mindset cannot be overstated. There are risks and challenges at every turn in business, the severity of which are magnified during a company’s infancy. Fierce competition, adverse market changes, execution problems, cash flow issues and plenty else test the mettle of every entrepreneur — often all at once.
If you jump into that minefield already anticipating failure, or even just prepared to tolerate it, it will be that much harder to stay focused on your game plan when times are tough, much less keep your team motivated on the mission rather than pursuing new jobs. It will be too easy to give less than your all, or pack up prematurely, leaving your great concept too little effort or time to succeed.
There does come a point for many new businesses when failure is the inevitable outcome. It may be because cash has dried up, the clients are gone, or the business model just simply won’t work. At that time, the leadership should accept reality, shutter the business quickly and move on.
But if you get into business believing you could fail, I recommend that you save yourself the trouble, as you have no doubt reached that point already.
Paul Mandell is chief executive of Consero Group, an event development firm in Bethesda.