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This week, I read a very insightful piece in the Guardian about failure and the culture of failure that currently exists in Silicon Valley. In the startup community, the concept of failure has both positive and negative connotations depending on what continent or country you are in.
The Guardian’s piece talks about Silicon Valley’s need to not just invoke failure but celebrate it as well. The oft repeated phrase most entrepreneurs have begun to live by is: “Fail fast, fail often.”
“Entrepreneurs give speeches detailing their misfires. Academics laud the virtue of making mistakes. FailCon, a conference about ’embracing failure’, launched in San Francisco in 2009 and is now an annual event, with technology hubs in Barcelona, Tokyo, Porto Alegre and elsewhere hosting their own versions,” says the piece.
In Africa, we haven’t quite reached the levels of annual conferences in celebration of failure, although many keynote speakers at conferences across the continent have started sharing their failure stories. Here on Ventureburn, we welcome entrepreneurs telling us the stories of their misfires, the lessons they have learnt and how they would do things differently. We argue that Africa needs to stop putting its “failed” entrepreneurs out to pasture. We believe there needs to be an openness about the startup up ecosystem, and how to navigate its choppy waters.
“[The] ‘failing fast’ methodology is more about acknowledging when something is not working and then tweaking and iterating it in the search for a viable and repeatable business model,” says Knife Capital’s Keet van Zyl.
But where should we draw the line?
While discussing the concept of startup failure and what it means for the ecosystem in the Burn newsroom our conversation silenced when someone said: “I read about [an entrepreneur’s] failure and all I thought was, I can’t invest in this guy, he made very stupid juvenile mistakes over and over again.”
How many times can an entrepreneur fail before they become an untouchable? Or will investors keep investing even though clearly this person has a long track record of failure? Will we soon have a new mantra of “fail the first time shame on the market, second time shame on market timing and the third time, well shame on you?”
If we really interrogate the concept of failure and how this mythos came to be so celebrated in the startup industry, it’s fairly obvious that there’s been a major shift. An investor once told me at a conference that this idea of failing somehow “got flipped on its head”. The original saying or concept was that an entrepreneur shouldn’t be tainted by failure. Now that has changed to mean that you must fail in order to be taken seriously as a company founder. Really? Must you fail to be worth investing in?
Not all failures are the same so let’s compare
Companies fail for many reasons, there is no one size fits all when it comes to quantifying what it means to have failed. Simply put: not all failures are equal. A startup could fail because the market wasn’t ready for the product or because a bigger, better-funded competitor releases a similar product. Entrepreneurs cannot always control the market or the reasons they fail. On the other hand, some of these reasons could easily controlled by the entrepreneur. This helps investors differentiate surely. This leads us back to the original understanding: it is okay to fail and you shouldn’t be punished for it.
But does it mean you MUST fail?
So now we worship at the alter of failure
“I am not one to ‘celebrate failure’,” van Zyl tells me. “But I do reflect on the downs while celebrating the ups of an eventful journey.”
I have a sneaky theory on why this is starting to happen a lot. The common thinking is that around nine out of 10 startups fail. I think that perhaps it’s more like 99 out of 100. That dramatically changes the spectrum of the failure rate. In the end, if investors don’t accept failure then there is no one left to invest in. It is not that the industry is untrue, it is more a need to perpetuate the winners. If you only pick the winners there will be no one left to create more wins. Because failure is often out of an entrepreneur’s control, with the right market, support and advice, chances are they are be one of the 100.
The need to celebrate failure is important to keep the system going, to stop it from crumbling down.
There are no magic moments in entrepreneurship
“I have a lot of respect for entrepreneurs who make the call to cull products or startups that just don’t get the necessary traction. And then share the story without the PR spin. Strategy is a lot about learning what to say ‘no’ to.” van Zyl says.
As investors tick their investment box, so too entrepreneurs must take stock of their experiences, their wins and their losses.
“As children growing up, we often think that we will come to a point in life when we reach ultimate success or complete failure. They appear as some special moment in time that will define everything, once and for all,” Rapelang Rabana founder of Rekindle learning tells me.
Is there a moment when you know that, yes, ‘I am officially a success’ or ‘I have failed at this and must give it up’? Success and failure are often measured by the industry or commenters on the industry but never the entrepreneur. I guess an entrepreneur knows to shut the doors when no one will pay the bills anymore.
“Having lived through desperate days that seemed to last a life time and enjoyed successes it dawned on me that there was no defining moment, no miracle moment. That life is simply a series of moments, a journey with ups and downs. That time keeps ticking over and even the darkest moments also come to an end,” Rabana adds.
When we look at the truth and the reality of it, should startups fail quickly?
“The harsh reality (without killing entrepreneurial spirit) is that some Startups should fail fast(er) to save the ecosystem some opportunity cost,” says Van Zyl.
Image: Ricardo Sousa via Flickr.