5 Valuable Lessons Entrepreneurs Can Learn from Failure

More people than ever are taking the plunge into entrepreneurship. Many are following their lifelong dreams or pursuing ideas they believe could change the world. However, a sizeable percentage of people are turning to entrepreneurship as an alternative to employment.

While anyone has the potential to run a successful business, entrepreneurship is not for the faint of heart. You must be willing to take great risks to reap great rewards.

To overcome common entrepreneurial challenges, you must be ready and open to encountering failure. However, most workplaces discourage or even punish experimentation, so many of us lack experience in managing failure.

Failure is one of the most potent learning tools. Entrepreneurs can gain valuable insight into their companies and themselves by learning the following lessons from failure:

1. Failing Fast Narrows Down What Works

“Fail fast” is an ideology that embraces the learning opportunities generated from failure. Entrepreneurs who follow the fail-fast principle approach their business as an experiment.

Rather than expecting perfection the entire way, these entrepreneurs tinker with every aspect of their business, from marketing to product design. The success of each change is based on audience response, sales, or another metric. If a new approach doesn’t yield the desired results, then the entrepreneur can quickly reassess and relaunch an improved version.

There are many benefits to the fail-fast principle. It encourages small but constant innovation rather than implementing large and costly ideas all at once. While failure is more frequent, its effects are less detrimental to the function of the company.

Additionally, taking this incremental approach makes it easier to analyze what is and isn’t working. At each step, entrepreneurs can reassess their goals and their processes and implement immediate changes.

2. Failure Leads to Fail-Proof Systems

One of the paradoxes of failure is that it can prevent larger and more catastrophic failures in the long run. That is because failure shines a light on weak spots or missed opportunities. Entrepreneurs can use this information to create more robust systems.

The airline industry is a pinnacle example of this. Every near miss or gear malfunction is thoroughly investigated to determine the source of failure. As a result, the industry implements new systems and regulations to protect against these failures. After decades of failure-driven innovations, the airline industry maintains one of the best safety records in transportation.

Entrepreneurs can replicate this process in their business by having a standard process for reviewing failures. The process should note any areas for improvement and enable business owners to implement changes accordingly.

3. Failing Encourages Growth

Failure is also an essential part of professional and personal growth. Being afraid to take risks and avoiding failure can prevent entrepreneurs from reaching their full potential.

Embracing failure is a foundational trait of the growth mindset. Entrepreneurs with a growth mindset believe in their ability to achieve, process, and learn. In their view, failure is simply the price of success, not an indication of one’s potential.

Entrepreneurs can develop a growth mindset by acknowledging their struggles. It is also essential to view obstacles as catalysts for growth and innovation. Similarly, criticism and negative feedback also hold immense value.

4. Failure Boosts Resilience

Resilience is the ability to bounce back from setbacks and navigate obstacles. Both entrepreneurs and the businesses they build must demonstrate resilience to survive in a dynamic economic environment.

Operating with a static approach makes businesses vulnerable to unavoidable changes. The threat of disruption is even more profound as emerging technologies rapidly change the business landscape.

Entrepreneurs who are willing to face and learn from failure are better equipped to lead their businesses with agility and foresight.

5. Failure Can Increase Productivity

Failures can happen for any reason, including a lack of skill, information, or simply unfortunate timing. However, purposeful failing also has its merits and benefits for entrepreneurs.

Productive failing is a learning approach that works in the classroom as well as the business world. In this concept, entrepreneurs purposefully engage in a task that they do not have experience in. They are entering into the challenge knowing that failure is a very high possibility, and that learning is the only outcome that is guaranteed.

Productive failing gives entrepreneurs the chance to work with a problem open-endedly. Rather than implementing a tried-and-true approach, they can test different solutions. Productive failing also requires thorough reflection.

After comparing and contrasting solutions, entrepreneurs can identify the approaches that generated the best results and apply this insight to future decisions.

Entrepreneurs who purposefully challenge themselves can gain insight into their limitations and identify what they need to push them to the next level. Whether this means hiring a consultant, finding a mentor, or enrolling in a course, failing in the short term can translate into long-term improvements.