Failure, learning and keeping going

Most new businesses do not last, and most founders have several failed attempts behind them. Seeing failure as data, not as a verdict on who you are, is one of the most valuable skills entrepreneurship can teach you, whatever career you choose.

What the numbers say

• The US Bureau of Labor Statistics tracked private sector business establishments born in March 2013. 79.6 per cent were still operating after 1 year, 50.6 per cent after 5 years and 34.7 per cent after 10 years.
• The steepest drop came in the first year, when about one in five closed.
• These are US figures and include many kinds of business, but they show that closing is common, not shameful.
• Paul Graham argues that most start-ups that fail do so because they made something customers did not want, which is why testing early (lesson 2) matters so much.

Fail small, fail cheap, learn fast

• The safest failures are small experiments: a stall that sells nothing costs one afternoon and a stall fee, not your savings.
• Harvard's Rock Center advises treating 'every iteration like a new experiment': decide what you want to learn, test it, then run the next test.
• Set limits before you start: the maximum money and hours you will spend before reviewing whether to continue.
• Never borrow money or use buy now pay later to fund an untested idea. The Banking and Credit module explains why debt makes failure far more painful.

A post-mortem that actually helps

• After any experiment or project ends, answer in writing: What did we expect? What actually happened? Why was there a difference? What will we do differently?
• Separate decisions from outcomes. A good decision can have a bad result because of luck; a bad decision can get lucky.
• Look for evidence, not blame. 'We only spoke to 3 customers before buying stock' is useful; 'we are hopeless' is not.
• Keep these notes. They become examples for CVs, interviews and university applications (see the CVs and Interviews module).

Change direction or keep going?

• Keep going if customers are using it and paying, even in small numbers, and the numbers are slowly improving.
• Change direction if people like talking about the problem but not your solution: keep the problem, change the offer.
• Stop if, after honest testing, nobody has the problem badly enough. Stopping a weak idea frees time for a better one.
• Talk it through with a mentor or enterprise adviser before big decisions; an outside view helps.

Looking after yourself

• Your worth is not your business's sales figures. Feeling disappointed after a failure is normal.
• Protect sleep, study and relationships. If a project is hurting your grades or health, scale it down.
• The Understanding Your Emotions module's lesson on self-compassion, criticism and failure gives practical tools for bouncing back.
• If low mood lasts or you feel overwhelmed, talk to someone you trust or your university wellbeing service, and see the Mental Health module for where to get help.