Being an entrepreneur is to know that feeling of arriving home at the end of a horrible business day and thinking to yourself, “I cannot feel any more beaten down than I am at this moment.” And then, after a good night’s sleep, returning to the office the next day and realizing that you were wrong the night before. It is possible to be more beaten down.
That is what it means to be an entrepreneur.
One of my students at University of Maryland asked me about this last week. “Hey, Professor Aberman, you always tell us success stories. What about flops? Do entrepreneurs ever fail?” I told him yes and no. Let me explain.
First, let’s look at the concept of “failing fast.” Entrepreneurs who take investments or involve other people should not adopt this pithy premise. Once you involve others it is not a matter of honor to “fail fast” — that would be pure selfishness. When you take other people’s time, hard work and money, you have a responsibility to do everything to prevent failure. Period.
Nevertheless, failures of businesses occur all the time. It is the nature of entrepreneurship. There are countless ways for a business to fail, and only one way for it to succeed. Success is always measured in the here and now as the absence of failure, and for a business there can be gradations of success. But, ultimately, there is really only one gradation of failure.
While a business’s ultimate result is binary — failure or success — an entrepreneur’s performance is not. A true entrepreneur never fails. A true entrepreneur fails upward. In other words, for an entrepreneur, both failure and success can have gradations.
When faced with the eventuality of a business that goes bust, or a fact pattern that could lead to a failure, people with the right mix of personality and experience find a path forward. They use the defeat — or possibility of defeat — to frame what comes next. For instance, entrepreneurs who are told “no” will ask why and try to learn from what they hear. A lesser entrepreneur takes no for an answer.
Note that this is very different from being blind to failure, or never giving up. An effective entrepreneur will reach a point at which the possibilities of success are so remote that a collapse of a business is a better outcome and find a way to fail upward.
Failure matters. It is a data point for an individual’s entrepreneurial nature. How they handle potential failure is a useful predictor of their skill set and entrepreneurial temperament. You learn a lot more about people when they are under stress, and having to make tough choices. And, you learn a lot more about their intellectual ability, sensitivity to their surroundings and ability to read and work with others at these tough moments.
The reason successful entrepreneurs tend not to tell many stories about defeat is not because they haven’t got any. For a true entrepreneur, failure is not absorbed as a loss; he or she always finds a way to turn lemons into lemonade. Their businesses might not always succeed, but they will.
Jonathan Aberman is a business owner, entrepreneur and founder of Tandem NSI, an Arlington-based organization that seeks to connect innovators to government agencies. He is host of “Forward Thinking Radio” on SiriusXM, a business and policy program, and lectures at the University of Maryland’s Robert H. Smith School of Business.