I see it a lot — entrepreneurs don’t like to talk about their startup failures. It becomes even more evident when an entrepreneur pitches me for money.
“Have you ever failed?” I ask entrepreneurs during the investment pitch. There's typically a long silence, followed by a hesitant response.
“Ugh … yeah.”
How each entrepreneur answers my failure question tells me something about the psychology of their entrepreneur mind. I have never met a successful entrepreneur that liked failure. I have never met a great athlete that liked to lose either. But failure is part of life and business and how people reflect on their failures can make a huge difference in the future. There is a close correlation between the mentality of athletes losing and startups failing.
When you fail, or at least when I did, you get pissed, despondent or even depressed. From a psychological perspective, the lower you go in your failed mind, the harder it is to come back up into the positive and high-energy zone of your entrepreneur mind. You have to remain mentally strong. You have to know who you are. You have to dissociate failure from your self-image.
I spoke to one of my children and asked them a simple question.
“Hey, how are you doing?” I asked enthusiastically.
“Fine” he replied. But his tone was extremely negative.
“What’s wrong son? You sound down,” I said.
“Dad, things are not going right for me right now,” he said in an extremely frustrated and depressed tone of voice.
“Well, being depressed because things are not going well for you is not going to solve your problem … whatever it is. If it were, I would be right there with you. That is negative energy you’re projecting on your mind and the easiest thing to do to get out of your negative mode is to start thinking positive.”
“Okay, Dad,” he hung up quickly on me. I am not sure he wanted me to be his psychologist for that day.
I don’t know if he listened to me, but I hope he does. But this same type of solution can be applied to any startup failure.
I know you’re going to say something like, “That’s it? That’s how you deal with failure, Damir?”
Well … I do — now. I didn’t deal with failure like that in the past, whether it was in sports or business. I used to get pissed off and depressed after losing a big game or failing in a startup. But what I realized is that being in that negative state of mind doesn’t really help or even matter — in the scheme of all things.
Yes. I have failed more than once in a startup. If you haven’t — you are one of the lucky ones. Let’s go to Las Vegas together and bet the tables.
If you've experienced failure, you know the painful mental process you go through when you fail in a startup. It’s worse when you fail and lose a lot of money. It’s hell when you really fail big. I have been on both sides of the failure spectrum. But it is relative. What some entrepreneur might feel is a huge failure in terms of monetary losses may be a drop in the bucket for another.
Still … if you fail, you will go through the mental roller coaster ride of failure where you get pissed, despondent, or even depressed — because some of the business decisions you made will come back to haunt you. And then you will beat yourself up psychologically over and over again, and this cycle continues full circle until you get to the point where you get tired of thinking about failure and you decide to pick yourself up mentally and start thinking in a different direction — the direction of positive energy.
Once you get into the positive state of mind, you start seeing the world differently. You start seeing different words appear to your entrepreneur mind. Words like opportunity, possibility, goals, dreams and innovation. But you can’t get there unless you change your state of mind to the positive side of the emotional spectrum. That’s why I told my son simply to just start thinking positive.
I know this sounds simple, and it is simple, but when you fail in your startup, it is hard at times to control your roller coaster, emotional ride, down the failure memory lane.
Look at your startup failure as a normal journey of life. It's another step forward to your personal success. When you fail, you do learn a lot about what worked and what didn’t. You learn that the mistakes you made might have been avoided with different business strategies.
However the initial conditions of your startup are different every time you start a startup. Some lessons might not be applicable to your next startup — even if you learned some hard lessons from them. Just because you learned your lessons from your failure doesn’t guarantee that next time you'll succeed.
Where I see failure variables play out the most in unpredictable ways is on the market and management side of the equation. It's difficult to predict the evolution of any new or emerging market. The lessons learned from your market failure may or may not be helpful in your next startup.
On the management side, ironically, the unpredictability plays out the same way if you form another startup with new people. If you start another company with the same people as before, you will have a startup advantage. The problem is that most entrepreneurs disperse after the startup fails — instead of trying to stay together and chase another startup idea. This usually happens because the founding team starts pointing fingers at each other for the startups failure. It’s human nature.
If I can give you any startup failure advice, from an entrepreneur and venture capital perspective, after failing in startups more than once, it's this: Analyze your failures as quickly as possible, and then do what most entrepreneurs fail to do after they fail — move on. Move on … move on … move into a positive direction. Start working on your next, big thing. Don’t give up.
If you can’t psychologically move on in a positive direction because the startup took a huge financial, physical and emotional toll, then the best thing is to take an entrepreneur vacation. This can be done in many ways. If you have the money, take a two-week vacation to figure out what to do next, or take a business consulting assignment, or join another startup and work hard until you figure out your next startup idea. I have done all three. They all worked for me.
Most importantly, if you reframe your entrepreneur mind into the positive side of the psychological spectrum after your failure, you are one step away from starting your next billion-dollar idea.
Whatever I recommend, I've been there myself as an entrepreneur and venture capitalist. It is so much more fun to see the world from a positive set of eyes. Tell me what you think by commenting below.
© 2013 entrepreneurdex
Analyze your failures as quickly as possible, then do what most entrepreneurs fail to do — move on. [tweet this quote]
Just because you failed and learned your lessons doesn’t guarantee success next time. [tweet this quote]
Failure variables play out in unpredictable ways on the market and management side of the equation. [tweet this quote]
An entrepreneur and investor, with more than 25 years experience, he's worked with ventures in the technology, internet, media and publishing, entertainment, energy, and manufacturing sectors raising more than $300 million in capital for various companies and investing more than $50 million into startup and emerging ventures. He's sat on the boards of 11 companies, served as editor-in-chief of Futuredex, a private equity magazine. Follow Damir on Google+