Failure for an entrepreneur is heartbreaking. So is the threat of it. But if Elon Musk survived that threat, you can, too.
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“Success is a lousy teacher. It seduces smart people into thinking they can’t lose.” — Bill Gates
Research by Kathryn Shaw of Stanford University and Francine Lafontaine of the University of Michigan shows that failed entrepreneurs are more likely to find success the second time around — and that the longer they remained at their first business, the higher their chance of success at the second. So, there is a silver lining behind every failed venture.
Still, failure is heartbreaking. After all, entrepreneurs desire to build startups that won't fail. And failure is particularly painful when they've invested a lot of their time and money. But in every failure, there is a valuable lesson to be learned and experience to gain.
The takeaway: If you don’t give up, you’ll bounce back bigger and better than you'd imagined. So, if your startup is going through a rough patch right now, check out these heartening comebacks:
1. Build something you love and investors will become fans.
“The only way to do great work is to love what you do.” — Steve Jobs
The biggest mistake entrepreneurs can make is to go "all-in" to create a product they neither love nor believe in. Just for the sake of hitting it big in the market, some entrepreneurs build businesses around something that is trending — not because they have the passion to pursue it.
In short, it’s the love, belief and passion for the services you offer and the products you create that will sustain you even when the chips are down.
Take Phil Libin's story: After selling two businesses, he wasn’t particularly passionate about, Libin wanted to make sure that his third company would be different. He and his team made themselves the target audience and created a product that they loved and a business they wanted to keep. This product was Evernote.
However, due to financial constraints, Libin got to the point where he was just about to pull the plug. Then, at the eleventh hour, he received an email from a Swedish investor who was a fan of Evernote and offered to put $ 500,000 on the table, allowing the company to keep running. Today, Evernote is valued at more than $ 1 billion.
2. Address what’s not working.
“Leaders get out in front and stay there by raising the standards by which they judge themselves and by which they are willing to be judged.” — Frederick W. Smith
Don’t shrink from feedback, no matter how bad people’s reaction to your service may seem. Instead, be open-minded and creative to find solutions to the problem you face, to get out of the rut.
The sports giant Adidas made a big mistake in its email marketing campaign when it featured the subject line, "Congrats, you survived the Boston Marathon!" Of course, it was impossible for viewers not to associate the line with that earlier, 2013 Boston Marathon and terrorist bombing that killed three and injured 260.
But Adidas quickly backed off and faced its reputation issue head-on by issuing a heartfelt public apology. This was the right move because it headed off a lot of bad press.
As Cameron Poetzscher, VP of corporate development at another company — Uber — that's faced reputation issues, said: "It is important for companies to be transparent about their mistakes. Every mistake is an opportunity to improve."
3. Create opportunities for your business to survive.
“If opportunity doesn’t knock, build a door.” — Milton Berle
There are times when your startup gets to the brink of closure and you’ll need to be creative in sourcing solutions to your problem. Here, no matter how crazy a possible solution may seem, you’ll never know what might work until you give it a try.
Elon Musk was stuck at a crossroads of how to save his ailing businesses SpaceX and Tesla. Musk himself described his dilemma saying, “I couldn’t pick SpaceX or Tesla or split the money I had left between them.”
Still, Musk's tricky situation inspired a proactive solution. To save SpaceX, he applied for a contract with NASA. That $ 1.6 billion contract with NASA succeeded and saved SpaceX. Then, to save Tesla, Musk took out a loan from SpaceX and sourced $ 50 million from his investors, saving Tesla hours before the company was to go bankrupt, on Christmas Eve 2008.
4. Stay tenacious until things work out
“Whether you think you can, or you think you can’t — you’re right.” — Henry Ford
Some entrepreneurs see failure as a sign that the business will never work, but that is far from the truth. They may have tried everything to boost productivity and efficiency in their business just to make sure that their startup works. But in such situations, it's important to be tenacious and refuse to believe that failure is inevitable.
Arianna Huffington is known to be successful in the online publishing space but early on encountered challenges getting to that success. When she wanted to publish her second book, for instance, she had to go to 36 publishers to get a "yes."
Then, when she established Huffington Post in 2005, the critical reaction was lukewarm, but still Huffington didn’t give up. She worked hard, and in 2011 HuffPo hit over a billion page views and was later bought by AOL for a whopping $ 315 million.