Failure is something we don’t talk about enough in the business world.
We hear a lot about start-ups and growing companies; not so much about retrenchment and shutdowns.
But there’s much to be learned in a company’s demise.
I often tell the story about my own career trajectory. At the start of 2000, I took over as technology editor. I thought I had just made about the best career move anyone could make: the Internet was changing all the rules. The dotcom industry was booming. Then three months later the bubble burst and I thought, what have I done?
Except I learned a lot about what is real in business by watching the market implode. And I found myself becoming more interested in business, not less. So my ears perk up when people talk about failure.
Mitt Romney, in his remarks the other day before the Northern Virginia Technology Council and Consumer Electronics Association, talked about why government incentives are necessary to promote innovation.
“Starting a business is risky,” he said. “There has to be an incentive to take that risk because most of the time you will lose.”
I wonder how many people heard “most of the time.”
The Republican presidential contender criticized the Obama administration’s $535 million investment in Solyndra not because the solar energy company ultimately went bankrupt.
“Any venture capitalist knows you make terrible mistakes — from time to time,” said Romney, who once ran a private equity firm.
Instead, he faulted the government for putting such a big chunk in, scaring off any private investor who might want to put “$2 million in some idea from this person in Montana.”
Last week, I was chatting with some folks at Rockville Economic Development Inc. and we got to talking about a series of classes the group sponsors to help people create a business plan. Many participants bring their ideas for start-ups, eager to be their own boss. But it doesn’t take long for some to realize that enthusiasm and good ideas don’t always equate into good businesses.
Organizers call that realization a “fast fail,” and that’s the best kind, before people have made a big financial and emotional investment.