1. Distance yourself emotionally
Experiencing failure can be emotionally damaging, especially if it kickstarts a downward spiral that leads to depression. One of the key things that Kim says everyone should do is “not to dwell on the emotions of the situation – whether that’s ‘I’m great but the world robbed me’, or ‘I’m rubbish, I can’t do anything’. That doesn’t really help anyone.”
He says: “It’s difficult if you really feel that failure not to be affected by it. It’s also difficult if you’re feeling that the world has somehow cheated you. If you go into a venture believing that the world has somehow robbed you of your rightful reward as the greatest entrepreneur in history then you’ve got a problem because that’s going to sway your judgment.”
2. Analyse what went wrong
Many start-ups will hold a post-mortem when it all goes wrong. Kim says that this is a good idea and can help people to come back after a failure if they understand what happened. It’s especially helpful if you can sit down with friends who will be honest and give you constructive feedback on the issues.
“By analysing it, hopefully what you do is give it some emotional distance,” he says. “Then if you can get your critical friends alongside you, you can dissect it a bit and try to work out whether it was fundamentally a good idea, whether there are changes needed to the business plan, and whether there is a way that you can make it work.”
3. Perform a pre-mortem on your next idea
Psychologist Gary Klein came up with the concept of a pre-mortem to enable projects to be tested before they go wrong. The idea is that, unlike a post-mortem, a pre-mortem occurs at the beginning of the project so that the idea can be improved rather than autopsied.
“Rather than a post-mortem where you pick apart the corpse of your business to work out what went wrong, you can have a pre-mortem,” Kim says. “Imagine that you’re three years down the road and you’ve gone bankrupt and you have to predict where you’ve gone wrong. What that does is get people out of the euphoria of ‘this is a brilliant business idea, it’s going to work’.
“The pre-mortem helps to focus people’s minds on what the steps are that they need to take, what assumptions they’re making about how popular they're going to be and what those assumptions are based on, and what mind happen if they're not so lucky. By focusing on what might go wrong, it helps you to become aware when you're getting warning signs that something isn't right so that you might be able to do something before it reaches crisis point.”
4. Realise that you’re not the only one who has failed
When you’ve failed at something it’s easy to feel isolated and like you’re the only one who could make such a mistake. But that’s certainly not the reality. “Setting up a new business is always hard – if it wasn't hard everybody would do it and everybody would succeed,” Kim says. “The big thing is to try to understand that failure happens to everybody, it isn’t a judgment on you.
“Having successes doesn’t mean you’re great, having failures doesn’t mean you’re bad. It actually doesn’t mean a whole lot. But you should pick out themes, pick out objective data that might help, rather than allow the emotional stuff – over or under confidence – to dominate your thinking.”