This post originally appeared at www.chrisamarks.com in 2013
If you’re a serial entrepreneur, or a venture capitalist, then you’ve probably experienced failure. In many ways, it’s the price of poker in the world of high risk start-ups.
If you have experienced failure, then you already know — it sucks. As a result, people generally don’t like to talk about it (myself included). One thing I’ve learned, however, is that there are different ways to fail, and some are better than others. Therefore, I thought I would break the silence and share some of my observations.
First, just to be clear, when I talk about failing, I mean complete and utter failure. I don’t mean missing the plan, reducing headcount, or re-forecasting after a bad quarter. I mean admitting that the idea that was so great just a few short months ago is no longer worth pursuing. I mean lock the doors, unplug the phones, update the resume, and write it down to zero. Complete. Total. Failure.
Second, each of my observations applies to both entrepreneurs and investors. When a company fails, they are in it together. Both parties can exhibit good or bad behavior, and both parties can help or hurt the process.
Ok, here we go…
- Separate the Emotion. The biggest challenge with failure is often the emotion that comes with it. If you are the founder of a failed company, then you have probably dedicated years of your life to get to this point. You have passed up more lucrative career opportunities, abandoned other hobbies and passions, and strained (if not ruined) several of your close personal relationships. There is a lot of anger, ego, and angst that comes with letting go. Therefore, when navigating the failure of your company, do whatever it takes to check your decisions (use a sounding board, avoid quick decisions, etc…). The goal is for logic to prevail over emotion. You’ll thank yourself later.
- Don’t Point Fingers. When a company fails, there is always more than enough blame to go around. But once the decision has been made to shut things down, does it really matter why you’re there? Allocating blame only adds emotion, stifles communication, and creates ill will going forward. Focus on the job at hand, and allocate blame when the heavy lifting is in the rear-view mirror.
- Learn From It. As I said, everyone in this business is going to taste some failure. The only way to achieve success in the long run is to learn from the mistakes, and avoid them the next time around. It sounds simple, but it’s not. One of the hardest things to do after living through the trauma of a failed start-up, is to go back and honestly assess the progression of events that got you there (if you do, you may be surprised at how you ultimately allocate the blame).
- Don’t Bail Out. No one wants to stay on a sinking ship. I get it. But just because you decide to shut down a company, it doesn’t become someone else’s problem. Too often, people assume that time and distance will fix everything. Unfortunately, that’s not the case. You will be much better off (legally, relationally and emotionally), if you take the time to wrap things up. The next opportunity will still be there when you’re done.
- Don’t Burn Bridges. Whether you are an entrepreneur or an investor, you operate in a small ecosystem. Don’t let the frustration of the current situation leave an indelible mark. Failure is not the end of the road — for you, or for those around you.
Hopefully, you will never fail, and this post will be irrelevant. If, however, you do experience failure, then choose to fail well. In doing so, you will live to succeed another day.