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Entrepreneurs Panel

Laura Tenison
Jennie Johnson
Richard O'Sullivan
Michael Oliver
Julie Meyer
Debbie Pierce
David Pollock
Brian Hay
Charlie Mullins
Steve Purdham
Jeremy Roberts
Tony Caldeira

No fear of falling

Author, writer and marketer Ryan Holiday on how entrepreneurs need to interpret failure.

"What is defeat? Nothing but education; nothing but the first steps to something better." - Wendell Phillips

In Silicon Valley, start-ups don't launch with polished, finished businesses. Instead, they release their Minimum Viable Product (MVP) - the most basic version of their core idea with only one or two essential features. The point is to immediately see how customers respond. And, if that response is poor, to be able to fail cheaply and quickly. To avoid making or investing in a product customers do not want. As engineers now like to quip: Failure is a Feature. But it's no joke. Failure really can be an asset if what you're trying to do is improve, learn, or do something new. It's the preceding feature of nearly all successes. There's nothing shameful about being wrong, about changing course. Each time it happens we have new options. Problems become opportunities.

The old way of business - where companies guess what customers want from research and then produce those products in a lab, isolated and insulated from feedback - reflects a fear of failure and is deeply fragile in relation to it. If the highly produced product flops on launch day, all that effort was wasted. If it succeeds, no one really knows why or what was responsible for that success. The MVP model, on the other hand, embraces failure and feedback. It gets stronger by failure, dropping the features that don't work, that customers don't find interesting, and then focusing the developers’ limited resources on improving the features that do. In a world where we increasingly work for ourselves, are responsible for ourselves, it makes sense to view ourselves like a start-up - a start-up of one. And that means changing the relationship with failure. It means iterating, failing and improving. Our capacity to try, try, try is inextricably linked with our ability and tolerance to fail, fail, fail.

On the path to successful action, we will fail - possibly many times. And that's okay. It can be a good thing, even. Action and failure are two sides of the same coin. One doesn't come without the other. What breaks this critical connection down is when people stop acting - because they've taken failure the wrong way. When failure does come, ask: What went wrong here? What can be improved? What am I missing? This helps birth alternative ways of doing what needs to be done, ways that are often much better than what we started with. Failure puts you in corners you have to think your way out of. It is a source of breakthroughs.

This is why stories of great success are often preceded by epic failure - because the people in them went back to the drawing board. They weren't ashamed to fail but spurred on, piqued by it. Sometimes in sports it takes a close loss to finally convince an underdog that they've got the ability to compete that competitor that had intimidated (and beat) them for so long. The loss might be painful, but as Franklin put it, it can also instruct. With a business, we take most failures less personally and understand they're part of the process. If an investment or a new product pays off, great. If it fails, we're fine because we're prepared for it - we didn't invest every penny in that option.

Great entrepreneurs are:
Never wedded to a position
Never afraid to lose a little of their investment
Never bitter or embarrassed
Never out of the game for long.

They slip many times, but they don't fall. Even though we know that there are great lessons from failure - lessons we've seen with our own two eyes - we repeatedly shrink from it. We do everything we can to avoid it, thinking it's embarrassing or shameful. We fail, kicking and screaming. Well why would I want to fail? It hurts. I would never claim it doesn't. But can we acknowledge that anticipated, temporary failure certainly hurts less than catastrophic, permanent failure? Like any good school, learning from failure isn't free. The tuition is paid in discomfort or loss and having to start over. Be glad to pay the cost. There will be no better teacher for your career, for your book, for your new venture. There's a saying about how the Irish ship captain located all the rocks in the harbour - using the bottom of his boat. Whatever works, right?

Remember Erwin Rommel and the quick work he made of the British and American forces in North Africa? There's another part to that story. The Allied forces actually chose that disadvantageous battlefield on purpose. Churchill knew that they would have to take their first stand against the Germans somewhere, but to do that and lose in Europe would be disastrous for morale. In North Africa, the British learned how to fight the Germans - and early on they learned mostly by failure. But that was acceptable, because they'd anticipated a learning curve and planned for it. They welcomed it because they knew, like Grant and Edison did, what it meant: victory further down the road. As a result, the Allied troops Hitler faced in Italy were far better than those he'd faced in Africa and the ones he ultimately faced in France and Germany were better still.

The one way to guarantee we don't benefit from failure - to ensure it is a bad thing is to not learn from it. To continue to try the same thing over and over (which is the definition of insanity for a reason). People fail in small ways all the time. But they don't learn. They don't listen. They don't see the problems that failure exposes. It doesn't make them better. Thick-headed and resistant to change, these are the types who are too self-absorbed to realise that the world doesn't have time to plead, argue, and convince them of their errors. Soft bodied and hard-headed, they have too much armour and ego to fail well. It's time you understand that the world is telling you something with each and every failure and action. It's feedback - giving you precise instructions on how to improve, it's trying to wake you up from your cluelessness. It's trying to teach you something. Listen.

Lessons come hard only if you're deaf to them. Don't be. Being able to see and understand the world this way is part and parcel of overturning obstacles. Here, a negative becomes a positive. We turn what would otherwise be disappointment into opportunity. Failure shows us the way - by showing us what isn't the way.

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