4 Ways to Handle Fear of Failure as Entrepreneur
Fear of failure is the most natural thing in the world. For many, including myself, fear of failure can be a stronger motivation than the chance of success.
If you do not fear to fail when starting a company, you do not risk enough.
When entrepreneurs are talking about failure, there are two main distinctions that need to be made:
- Personal Failure
- Technical Failure
If you never feared personal failure you should stop reading right now and start vesting more of yourself into your company.
I’m vesting myself into my companies to the point that I have gotten physically ill due to fear of personal failure. If you are like me, we might be able to share some experience.
1. Compare within your League
Do you compare your business to public traded corporations in your industry?
I did, and it made me sick to see how well my much larger competitors could do in the stock market while I had to struggle keeping a positive cash flow in the exactly same industry.
When comparing my company to these public traded monsters, I looked like a failure. The reality was that a few years later, when the stock market collapsed, the balance of success changed.
It is good to pick competitors that are larger than you, but nothing good will come from comparing results out of your league.
I’m sure that the players of Sporting Devils FC in the English 10th division wished they played like Manchester United in Premier League, but constantly comparing their own team with Manchester United would make them look like failures even when they win matches.
2. Never Focus on Failure
If we should believe modern motivational theory, the brain is working in strange ways. It will attempt to achieve what you focus on, but it does not understand negative context.
If you are in doubt, try the following experiment:
“Do not think about the Eiffel Tower.”
What was the first thing that came into your mind when reading the sentence above?
(I guess the Eiffel Tower).
Instead of obsessing about the likelihood of your company to fail and spending all of your time finding the pitfalls, you should try to find out how great businesses turned around difficult situations successfully.
3. Be a Leader, Change your Business Before it Fails
It has been fancy lately to talk about “Pivots”. The pivot refers to a complete change of business area due to a previous failure.
Changing your business completely can seem like a risky task, but it is the only right thing to do if you head towards failure.
The book “Wikinomics” by Don Tapscott features a great example, showing how changing the business against all common sense helped the Canadian gold mining company, Goldcorp Inc., to bankruptcy:
“Expensive internal geologists were having trouble finding the exact location and needed more time and money. Using Open Source business logic the company decided to give up terabytes of the company’s proprietary information online and prize money to anyone who could find gold on the company’s land
Responses from around the world, many from disciplines outside geology, led to discovery of 8 million ounces of gold. The change in business strategy moved Goldcorp Inc. from an underperforming $100 million company into a company with a market cap of $9 billion.”
4. Do not Embrace Personal Failure
In business, as in life, there are winners and losers. Even though you are a good entrepreneur, you will have success and you will have failure.
As mentioned at the beginning of this article, there are two types of failures: there is technical failure and there is personal failure.
It’s common wisdom that you should learn from your failures, but all failures are not equal. There are plenty of things to be learned from the technical failure.
Technical failures are enterprises that fail because the R&D didn’t turn out as hoped for or expected. These failures should be embraced and shared so nobody in the future tries to create squared wheels or cars without breaks.
The problem is that most of the failure corresponds to entrepreneurs that fail, fail on the personal level. Typical cases of personal failure include:
- Hired the wrong people
- Our timing was wrong
- We ran out of money
- The customers were not willing to pay enough
Despise what any failed entrepreneur is trying to tell you, this is all personal failure. You will be better off spending 15 minutes learning about Marc Benioff’s strategies to hire a winning team in Salesforce.com than listening to 100 failed entrepreneurs trying to explain that their company failed due to the team they hired.
There are more to be learned from success than from failure and you do not need to take my word for that. Harvard Business School has published a study showing that failure is not an effective way to learn entrepreneurship.
Image courtesy of Flickr user Hjem.