The up­side of fail­ure

Set­backs a nec­es­sary in­gre­di­ent to many business suc­cess sto­ries, ex­perts say

Ottawa Business Journal - - SMALL BUSINESS WEEK - – Spe­cial to OBJ

Ev­ery en­tre­pre­neur feels it at some point: the fear of fail­ure. Only half of new busi­nesses make it to their fifth birth­day, and that can cause en­trepreneurs a lot of stress. How­ever, ex­perts say fail­ure can ac­tu­ally lead to ma­jor ac­com­plish­ments.

In fact, fail­ure has been a key in­gre­di­ent in some of the business world’s great suc­cess sto­ries, says Michel Berg­eron, se­nior vice-pres­i­dent of mar­ket­ing and pub­lic af­fairs at the Business De­vel­op­ment Bank of Canada (BDC).

“Cana­dian en­trepreneurs and the pub­lic at large need to be more for­giv­ing about fail­ure. Fail­ure – and learn­ing from mis­takes – is of­ten an im­por­tant mile­stone on the path to suc­cess,” Mr. Berg­eron says. “We have to change our per­cep­tion about fail­ure in or­der to help business own­ers stay in the game.”

Deb­o­rah Con­roy of EY agrees. She points to the new BDC En­tre­pre­neur­ial Re­siliency Award, an ini­tia­tive that rec­og­nizes a Cana­dian business that has suc­cess­fully un­der­gone a turn­around or piv­otal event in the past and come back stronger be­cause of it.

“Many en­trepreneurs talk about some kind of mas­sive fail­ure or hur­dle they’ve over­come,” says Ms. Con­roy, vice-pres­i­dent of trans­ac­tion ad­vi­sory ser­vices at EY. She is also pres­i­dent of the Mon­treal chap­ter of the Turn­around Man­age­ment As­so­ci­a­tion, a group for cor­po­rate turn­around ex­perts that teamed up with BDC for this award.

No business is too big or too small to con­front road­blocks. Berg­eron cites the ex­am­ple of Groupon, the gi­ant deals web­site.

The company got its start as a so­cial me­dia site called The Point, which was cre­ated to help peo­ple con­nect for so­cial ac­tivism pur­poses. After a year of ef­fort and US$1 mil­lion in op­er­at­ing costs, the startup was go­ing nowhere.

“The founders shifted gears and turned their of­fer­ing into the dis­count coupon ser­vice Groupon. They learned, adapted and made a for­tune,” Mr. Berg­eron says. Two years later, the shift in fo­cus proved prof­itable: Groupon bal­looned from a few dozen em­ploy­ees to 10,000 and was the fastest company in his­tory to make US$1 bil­lion in rev­enue.

Mr. Berg­eron ad­vises en­trepreneurs to adopt a “try, try again” phi­los­o­phy. At its core: learn­ing from mis­takes and show­ing re­silience, a new business ap­proach that is grow­ing in pop­u­lar­ity in to­day’s rapidly chang­ing econ­omy, he says.

In­stead of the old model, which em­pha­sized ex­ten­sive plan­ning be­fore launch­ing a new ven­ture – by which time tech­nol­ogy and mar­kets may change sub­stan­tially – the new ap­proach favours a lean and nim­ble startup.

The idea is to en­gage cus­tomers early with a ba­sic prod­uct, even if you haven’t worked out all the bugs. The sec­ond step: Learn quickly from cus­tomer feed­back and mis­steps. Third: Con­stantly re­fine your ef­forts.

And the fi­nal se­cret in­gre­di­ent: Don’t give up.

“I don’t think fear is all bad. It can be healthy and rea­son­able. It keeps en­trepreneurs from mak­ing rash de­ci­sions,” Ms. Con­roy says. “But it’s im­por­tant to avoid ex­ces­sive hes­i­ta­tion and wait­ing for the ex­act per­fect mo­ment. Try­ing, fail­ing and try­ing again is much bet­ter than not try­ing at all.”

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