Why failing a startup sucks

For decades, the startup world has been promoting failure as something we should all aspire to. Successful entrepreneurs boast about their war stories with pride; each dead startup in their graveyard representing a badge of honour they wear on their chest. 🛡☠️

Venture capitalists favour entrepreneurs with ‘scars’ because they know they’ve been through hell yet they’re still standing.

The popular saying ‘fail fast’ encourages us to have a crack and see what happens. “Just get started, and learn from your mistakes!” they’ll say.

But it’s all bullsh*t.

It’s time for the startup community to recognise that failing actually sucks. 

How can we call everything from unsuccesful marketing experiments through to companies losing millions of dollars exactly the same thing? We’re confusing entrepreneurs by using oversimplified language.
 

Let’s talk about what real failure is..

Real failure is taking $200K in investment from people around you to build a product that the market never wanted.

It’s damaging your relationship with your spouse because you remortgaged your home and promised your idea would work, and it didn’t.

It’s wasting seven years pursuing a bunch of crappy ideas that were never truly validated.

It’s making easily avoidable mistakes that you would have avoided if you knew the trap you were walking into.

None of these things should be glorified.

There is nothing cool about losing.

The only benefit of failing is what you learn from it but there are far easier ways of learning.

 

If doctors were like entrepreneurs 👨‍⚕️

Imagine if doctors were as irresponsible as entrepreneurs. They’d kill multiple people during their ‘learning process’ before finally knowing how to do things right.

I certainly wouldn’t want a doctor ‘winging it’ for an operation on my vital organs.

If the entrepreneur was the only person hurt through failing, it wouldn’t be so bad. But that’s not the case. Failing hurts your family, your investors, your partners, and your customers.

It’s the most selfish (and costly) way for entrepreneurs to learn how to build great companies.

 

Marketplaces as a common example

For those who don’t know, a marketplace is a business model where you facilitate two parties transacting with each other. Think eBay, or AirBnb.

The hardest part about making a marketplace work is balancing the supply and demand. Yet, I rarely meet a founder attempting a marketplace that truly understands just how hard this challenge will be.

This lack of knowledge usually results in them burning a bunch of cash (a combination of their own and their personal networks’) and their startup dies a slow, painful death.

So what’s the right thing to do?

Let them waste hundreds of thousands of dollars and hurt a bunch of people to learn this lesson the hard way?

F*ck no! 😣

Just tell them the mistake they’re about to make before they make it. Same lesson learnt. Way less people hurt in the process.

I want to be clear that I understand the saying ‘fail fast’ DOES have good intentions. The creators were trying to encourage aspiring entrepreneurs to get over their fears so they could start building something.

The issue around failure is terminology.

If you have an idea, the worst possible thing you could do is build a product straight away. There are simple and inexpensive experiments you can use to test whether or not your idea is viable BEFORE you build your product.

If you have a marketplace idea, start a Facebook group and manually get people transacting with each other.

If you have a SaaS idea, figure out a way of doing it without a platform by offering a concierge service.

If you have a physical product idea, get some digital 3D renders made up and run Facebook ads to see if people will click on them.

If these experiments go well, then great! You can then take serious steps towards getting investment and building your product.

If the experiments have shitty results, that’s also good. At least you’ve proven it wouldn’t work before you hurt anyone in the process. And you’ve learnt a bunch of cool new things. Think of a new idea and move onto experimenting with that.

Great startups take 5–10 years (or more) to build. So it’s not fair for us to encourage founders to fail a bunch of times in the road leading to their success.

So let’s all start calling experiments “experiments” and failure “failure”. That way when entrepreneurs hear someone talking about their failure story, they won’t need to ask, “do you mean the good kind of failure, or the bad kind?”