If at first you don’t succeed… you’re one of literally thousands. If your startup fails, it’s not the end of the world: Work it out, share the pain and move on.
By Leticia Gasca Serrano (Co-Founder & Director, FuckUp Nights)
I can’t deny it: I love talking to people who had a business that failed. It seems to me as an unusual conversation from which you learn a lot about business and about human nature.
I am co-founder and director of FuckUp Nights, a global movement created to publicly share stories about business failure. It was born as a hobby in Mexico City in 2012 and has now reached more than 40 cities in 15 countries.
As you can imagine, I talk every day to a lot of people whose businesses have failed or are about to do so. In those conversations my journalistic instinct kicks in (I worked as an editor at business newspapers and magazines for several years) and therefore I tend to ask my interviewee about all sorts of things about his or her failure, just to reach the nitty gritty of their story.
The Seven Whys
Long ago, one of the journalists I admire most told me that in order to get to the bottom of any issue, you had to ask WHY? seven times.
For example, if someone tells me that their business failed because there were no sales, I ask:
Why were there no sales?
Because people did not enter our store.
And why people did not enter the store?
Because it was very dark inside, maybe.
Why was it dark? Not enough light bulbs? Why was that?
The electrical structure of building we were renting was broken and the neighbors could not agree to raise the money to fix it.
Why were you so long in that building without good lighting and bad neighbors?
Because nobody was in charge of finding a new place.
This incisive technique has allowed me to learn much from their stories. I have discovered that there are businesses that are on the brink of failure but can be rescued. On the other hand, there are businesses that are born to fail.
Failure is Likely
The first fundamental (and rarely mentioned) truth about business failure is that when a business is born, it is more likely to fail than succeed... but no one tells you that.
In Mexico, 75 percent of businesses close before their second year of operation. All over the world, there are more businesses that fail than businesses that succeed.
It seems that the only people who are aware that businesses have a high failure rate are investors. In 2014 I was invited to participate in an investment forum to talk about failure so I decided to invite as a panelist the director of a large impact investing fund.
Before the panel, I asked her something really naive: What happens when a company of your portfolio fails? She smiled and told me that they had it covered. "We know that most of our companies will eventually fail."
Most of the funds that invest in new and small businesses assume that of 10 companies:
- Three or four will fail
- Three or four will return the original investment
- One or two will scale and have substantial returns
Fixing Your Ego
I'll never forget the first time I heard someone say that when his business failed, the experience was so terrible that he contemplated suicide.
The reality is that getting back up is not easy. Though some deny it, every time a business fails, there is an emotionally affected founder.
Everyone lives and overcomes failure differently, but in all cases, the first part of the process is like mourning: You have to accept failure and realize that you and your business are not the same.
In other words, you are not your business. If your business fails, it does not mean you are a failure. A failed business simply means that your project did not work, which happens to nine out of 10 people trying to start a business. You are not the only one.
Many people have told me that sharing their failure story in public has been the most relevant step of the therapeutic healing process. If you want to tell your failure in a FuckUp Night, or if you want to take this movement to your city, write to email@example.com and tell us your history.
Want to know how to maximize your chances of startup success? Join us at the Women 2.0 conference on Sept 30th and Oct 1st.
About the guest blogger: Leticia left her post as feature editor at Expansión Magazine to co-found Fuck Up Nights, a world movement where seasoned entrepreneurs and community leaders share a tale of a failure they’ve lived on the road to success. She previously worked for New Ventures Mexico and coordinated the First Latin American Conference on Impact Investing in Mérida, Yucatán. She founded a social enterprise that failed.