How to learn from any business failure
By ATB Financial 2 September 2020 5 min read
If there’s one constant in every entrepreneur’s life, it’s failure, says Jason Bacon, senior manager, entrepreneur education at ATB.
“The story you’ve been told your whole life is that failure is the worst thing that can happen, but that’s not true. Failure is never the end of the story.”
In fact, many famous entrepreneurs failed repeatedly before seeing major success. Thomas Edison created 10,000 prototypes of his electric bulb before succeeding. Fashion designer Vera Wang didn’t make the US Olympic figure skating team before she got into design. The founder of GoPro, Nick Woodman, had two failed startups—one of which had $3.9 million in funding—before he created his unique camera. Even Oprah was fired from her first TV job.
Every entrepreneur is going to face failure in their journey. Entrepreneurs who take the time to grieve, explore and reflect on their failures are creating space for powerful and game-changing learning.
Why failure is a teacher for entrepreneurs
While mistakes and failures in business can be uncomfortable, embarrassing and challenging, most successful entrepreneurs have come to embrace failure as the path to greater success. Amazon founder Jeff Bezos has acknowledged that he’s made literally billions of dollars of mistakes while building and growing his company. Mistakes are a natural part of experimenting, trying new things, and ultimately, innovating for business.
Lethbridge-based Kris Fleckenstein has been a serial entrepreneur since his university days and is now the founder of Marked Stone Advisory, an entrepreneurial advisory company. He’s also working on his PhD in entrepreneurial learning, exploring how entrepreneurs transform experiences like failure into knowledge. He says failure is such a powerful teacher because it forces entrepreneurs to change their behaviour.
“We often don’t reflect very much on things that go well. There might be lots of opportunity to learn from successes, but when they happen we’ll typically exploit them and not reflect,” he says. “Failures transform an entrepreneur’s thinking from an exploitation mindset into an exploration mindset as they figure out how to correct or what to do next.”
Bacon adds that entrepreneurs’ ability to continually collect feedback and learn in the face of failure, combined with taking action on this information, is what can make the experience of failure so powerful for learning. In fact, this approach can lead to valuable pivots and open up new opportunities, like how Calgary’s Doodle Dogs closed their grooming salon when it wasn’t driving the kind of business success they wanted.
Fleckenstein has termed this process of deep reflection, learning and growth as “regenerative failures*” and believes that with focused intention, entrepreneurs can transform each of their mistakes and challenges into this kind of valuable insight.
It’s okay to grieve failure in business
Before pushing yourself to learn from a failure, Fleckenstein recommends taking time to grieve the loss associated with the experience.
“Entrepreneurs experience a significant sense of grief and need to understand that there is a grieving process. If we look at grief recovery, there are two mindsets: loss orientation and restoration orientation. Loss orientation is when you process the loss until you can detach yourself from it. While restoration orientation is avoiding and instead focusing on dealing with the indirect stressors of the loss,” he says.
Basically, while you’re processing a loss, it’s natural if you find yourself waffling between ruminating on it and distracting yourself with other work. Fleckenstein says according to his research the best way to move through failure is to go back and forth between the loss and restoration orientations.
One critical thing is to not beat yourself up while you’re processing through the grief.
“It’s important to be able to recover with some level of confidence,” he says.
How to learn from failure
If failure is one of the best sources of learning for entrepreneurs, how can they ensure the experience is productive and leads to success in the future? Fleckenstein has four tips:
Be honest with yourself that failure is happening: Don’t try to sugarcoat details or be overly optimistic about what’s happening. Try to acknowledge that a failure is underway and see its details as objectively as possible. “This will also allow you to spend the right amount of energy, time, resources and money on the issue instead of holding on to something for far too long,” he says.
Take time to reflect: Think about what went well and what didn’t. Again, be honest and objective here, so you can draw out the lessons as clearly as possible. Ideally, write them down, says Fleckenstein, as you’ll not only have a record of them for the future, but you’re more likely to remember them if you put pen to paper.
Talk to people about it: If your banker or accountant is willing to talk to you about what went wrong and what could have gone differently, take time to have those conversations. Be sure to talk to employees, customers and anyone you can get feedback from to help you deepen your understanding around the failure. It’s important to take the opportunity to learn as much as possible about what went wrong, he says. “You’ve already had the failure, why deny yourself the chance to reap the benefits of it?” Also, talk to people who are not connected to the business, like fellow entrepreneurs, mentors or consultants. They’ll provide a different perspective and remind you that not only is failure a regular part of entrepreneurship, but also, it’s not the end for you.
You don’t need a timeline: This process doesn’t need to happen in a set amount of time. Fleckenstein advises that you do it when you’re ready and take as much time as you need to reflect, have the conversations and understand the lessons. He says to try to approach the process with a positive mindset—as tough as that can be—because it’ll help you get through it more quickly.
No one likes failing. But for entrepreneurs, it is one of the greatest learning opportunities they’ll experience.
“If you act like an ostrich and stick your head in the sand when failure happens, things will feel worse and you’ll be more lonely,” says Bacon.
Fleckenstein adds that learning from failure will allow you to recover a lot quicker next time.
“Once you experience a failure and, in due course, get past it, you learn that it didn’t take you out completely. This gives us a little more confidence. While difficult, these experiences make you more resilient and better prepared for your next business challenge,” he says.
If you’re looking for a deep dive on everything you need to know around how to become more resilient and agile as you work to grow your business, our ATB X Accelerator program might be just the place for you. Alternatively, feel free to reach out to one of our entrepreneur strategists to explore where you are with your business, where you want to be and how to get there!
*Fleckenstein has borrowed the term, “regenerative failure” from the late Dr. Jason Cope.