Failure is a fact of life. But the most successful people have learned the hard way to use their failures as an opportunity to learn – and bounce back.
Along the way, these entrepreneurs have learned secrets about failure that carries them through the business challenges they face. Let’s look at the most common mistakes made in business and what the people who made those mistakes learned.
1. We didn’t plan and we didn’t budget.
Targets are useless if you don’t have a road map to know how you achieve them. Failure to plan for sustainable growth is a common mistake that can take any business down.
In 1998, Boo.com was set to be the Amazon of fashion and sportswear. Founded by three established entrepreneurs, who had already made their millions in an online publishing venture, Boo.com generated over $130m in investor funding, rapidly established its global brand and made the most of being the first on the scene.
But spiralling marketing and technology costs soon exhausted $185m in just 18 months. Thousands of tasks were farmed out to hundreds of employees who had yet to be hired. The founders couldn’t answer simple questions about the business or financial models to potential investors.
And so Boo.com became one of the most famous casualties of the dotcom bubble. Today, one of the three founders, Ernst Malmsten, is the chief executive of London-based luxury-goods company Lara Bohinc, and has learned his lesson: "we spent maybe £10,000 on the website. Back in the Boo days, I’m a bit embarrassed to say, we spent £30 million".
2. We didn’t know what our customers needed.
You can have an incredible world-changing idea, but if you don’t understand your customers’ problems then the time bomb is always ticking. When Devver, a hotly tipped start-up specialising in developer coding tools, shut up shop in 2010, co-founder Ben Brinckerhoff knew exactly where they had failed:
"Our mistake at that point was to go 'heads down' and focus on building the accelerator while minimizing our contact with users and customers (after all, we knew how great it was and time spent talking to customers was time we could be hacking!)
"Now I spend time asking clarifying questions and focus on building simple interim solutions so I can rapidly get feedback.”
3. We got comfortable. We didn’t innovate.
Blockbuster must have rued the day they refused to buy Netflix for just $50m back in 2000. With the bursting of the dotcom bubble fresh in their minds, they were risk-averse. They thought online DVD rental was a niche market and paid lip-service to 'video on demand' streaming.
By the time they realised their mistake in 2004, they were a bricks and mortar store competing in the digital marketplace. When the scores were finally tallied, Netflix was valued at $13bn whilst Blockbuster was worth $24m, less than half of Netflix’s original price tag.
Failure to innovate with new products, solutions or markets can see even corporate behemoths brought down and consigned to the history books. "This is a pattern we see over and over," says Jim Keyes, former CEO of Blockbuster. "If a company is not able to keep up with the changing needs of its customer, it will become irrelevant."
4. Other people didn’t believe in us, so we stopped believing in ourselves.
There are countless businesses that lost faith when faced with adversity. Scepticism, mockery and flat-out refusal test whether you have the will and the drive to succeed, even when the only person cheering for you is you.
So remember James Dyson, who spent 15 years creating over 5000 versions of his Dual Cyclone vacuum cleaner, before making one that worked. Remember Steve Jobs, whose financial recklessness got him fired from his own company?
Remember JK Rowling, a single-mother on the brink of poverty, reading each and every one of her rejection letters as five years of work collapsed into financial non-viability.
They persevered. They turned their failures into the kind of success that dreams are made of. And in doing so they learned a secret, that failure has another name: feedback. It inspires creative problem solving, offers different perspectives and entrenches tenacity and resilience.
Failure may not be fun, but it is inescapable. So when it happens to you, embrace it as an opportunity for growth, change and, ultimately, success.