The F-Word in Entrepreneurship
I recently spoke with Diana Kander, a successful entrepreneur with experience in the legal, technology, and service sectors and Entrepreneur-in-Residence at the Kauffman Foundation. Diana has founded and sold multiple enterprises, raising a lot of angel investment in the meantime. But we weren’t getting together to talk about her successes. Instead, we dove into a taboo topic … failure, which she attributes to both the ups and downs of her entrepreneurial journey.
Failure is incredibly common in entrepreneurship; rates have been reported at up to 95 percent. But as Diana points out, you wouldn’t know that based on media coverage of the “typical” startup story. The classic plot of a startup’s biography unfolds as such: a startup is launched, it raises funding, then it exits. But Diana knows better, from both personal experience and interviews and research, and would like to share the more common but untold story of failure.
To tell that untold tale, Diana has launched a series of articles on entrepreneurship.org called Lessons in Failure. For the first interview in the series, Diana talks to Laura Sanko, a founding member of a startup that raised $3.5 million to rent (via website) high-end jewelry for a fraction of the retail value of each piece. But three years later, the investment money was gone and, even though the site continued to operate, it had failed to meet the investors’ expectations. (Read the interview to find out why this happened and what it meant for Laura and her startup.)
There are so many reasons why sharing stories like Laura’s is a powerful and positive idea, but the title of her series tells it all—these failures are lessons. By sharing them, we hope entrepreneurs who have yet to make the mistakes that can lead to startup death (such as not preserving cash or not testing the business model early on) can learn from the entrepreneurs who did.
I know that failure in entrepreneurship is common and I hear that it should and needs to be accepted. But that’s simply not the case on a widespread basis and it needs to be. Entrepreneurs need to know that failures happen, but they should serve as educational opportunities that make them a wiser entrepreneur the next time around and not reasons to give up on creating something new and innovative. The more stories of startup fails that are told in a way that doesn’t shame the entrepreneur, but celebrates both the creation and death of an idea—and most importantly the lessons learned along the way—the better every entrepreneur will be.
Watch the interview with Diana: