Thursday, 3 November 2011

How do you know you have failed?

"99 percent of success is built on failure." -  Charles Kettering
I have recently heard much talk about how all good entrepreneurs have lived through failure and that, in fact, an entrepreneur needs to fail on the road to success.  The Guardian's Tech Weekly Podcast recently discussed this when talking about the new 'Silicon Roundabout' area of London rich in technology start-ups and why none have achieved comparable success with their 'Silicon Valley' counterparts.


Apparently the British don't tolerate failure the way those in the US do.

If one peruses the millions of words recently written about Steve Jobs, much is spoken about his products which failed, his personal failure in being sacked from Apple, and how he spoke in the (now famous) Stanford Commencement Speech about how he learned from those mistakes.

But no one seems to know how to answer one simple question:
How do you know you've failed?
There are hundreds, if not thousands of potential entrepreneurs worldwide who have great ideas.  Many of them put the ideas into practice and develop those ideas into a functioning product or service or artistic endeavour (such as a composition, an artwork or a novel).  Many of them are persistent in trying to get funding for their company or to get others to back their ideas both financially and morally.

Some are lucky. Through friends, family and serendipitous connections with investors and mentors, they are able to get their business off the ground. They might get a mention in the local press or even the national media. They might present at trade shows or speak at conferences.

But they do not achieve the critical mass necessary to make the business profitable.  Some investors are patient and, as with Amazon, will wait up to seven years before seeing even a modest profit; but many investors are less patient and will stop funding a start-up after a few years of operation.  Would Amazon have survived if it had taken two more years to move into the black?  Bill Gates said "Microsoft is always two years away from failure".

When should creatives, in business or the arts, decide to cut their losses and try a different direction?  Pulp, the Sheffield band, took sixteen years from forming to reaching national and international success.  In 2009, The Economist wrote how entrepreneurship was finally 'cool'.

So all the angel investors, VC funding, government grants and deregulation of start-up bureaucracy is great, but perhaps what is really needed is some objective guidance and advice for when someone should persist with their idea because their time will indeed come; and when they should just pack it in and try something different.  We could call them "Reality Checkers".

For those who do wish to persist, I recommend reading the quotes on innovation on ideachampions.com.

Perhaps the best quote for me, however, is by Douglas Adams:

"A learning experience is one of those things that says, 'You know that thing you just did? Don't do that.'"