VENTURE CAPITALISTS ARE LOOKING FOR FAILURES
by Maribeth Kusmeski
Did you know failure is one of the biggest indicators of future success in an entrepreneur? According to an article in the April issue of Harvard Business Review, “Failing By Design,” many venture capitalists won’t invest in a new enterprise if the founder has never undergone failure. In other words, they’re looking for… failures! Why??
There are two types of failures: the first are those that do nothing and fail; the second are those that take a risk and end up failing. We’re focusing on the second type. If you’ve ever had a failed effort, I hope you feel the same about the reams of research on this. I know I do. Failed efforts can provide invaluable learning experiences, as we grow, and gain the experience necessary for future significant successes. The fact is that businesses won’t assume the risks necessary for innovation and development if they’re not okay with the idea of failing on some level.
I know people who are so afraid of failing that they’ll do anything to avoid it. The problem with fearing failure is that you ultimately avoid risk, don’t bet on yourself or your business, and stunt your richest experiences. Apparently, those who have never faced a failure in a product, division, or business don’t have the experience that is valued in business. However, no one wants to fail!
I recently heard someone quote a high-ranking executive and head of a US division of a multinational company saying that nearly 20 times in his career he was sure he would be fired – for standing out, speaking his mind, and taking relatively risky actions. However, he was never fired, only promoted (of course, this can be a very fine line at times).
Failure doesn’t just come in the form of losing money. If you commit to working incredibly hard, day and night, to get your business off the ground, or move your career forward and it doesn’t work – it’s also a failure (and perhaps a blow to your ego after pouring your heart and soul into your failed initiative). One might assume that it’s simply less disappointing and easier to not work that hard and not reach success. The excuse is already built into the equation. What would happen if you tried your hardest and it didn’t work out? The real question is – what if you didn’t? What could you be losing out on by never trying at all?
I’ve had some failures in my business over the years: painful lessons I certainly don’t want to repeat. However, I now know the key is to manage for failures. Be prepared to share what went wrong and dissect it. I’ve also learned how to create a “disengagement process” for getting out of a project that’s showing signs of failure. The more things we try, the more of them will inevitably fail – and the more that will succeed!
Maribeth Kusmeski is president of Red Zone Marketing, LLC; 1509 N. Milwaukee Avenue; Libertyville, IL 60048; phone: (847) 367-4066; fax: (847)-367-5226; e-mail: [email protected]; Web site: www.redzonemarketing.com.