How To Cope With Startup Failure

Maybe your first business will be an amazing launch and bring you fame and fortune, but there's every chance that your business will fail.

No matter how amazing your business idea, despite how brilliant your business plan, something you are likely to require coping skills for is the fact that your first idea—potentially even your second, third, or fourth!—may fail.

After all, nine out of ten startups do not survive their first three years. Maybe your first business will be an amazing launch and bring you fame and fortune, but there’s every chance that your business will fail.

How do you recover, and start again?


Embrace the Postmortem

So many startup businesses fail that an entire culture has developed around the failure postmortem. Googling the term “startup postmortem” links you to hundreds of essays written by entrepreneurs about how and why they believe their businesses failed. Autopsy.io was even created, tongue in cheek, to help entrepreneurs consider why their businesses might not have succeeded.

Reflection onto what went wrong with your business is important. Focus on elements that you could have controlled, such as better marketing, a clearer communication of your company’s mission, or slower scaling. Consider:


  • Could you have had a clearer and more developed customer profile?

  • Were you reaching your target customer?

  • Was your message compelling and customer focused?

  • Did you scale too quickly?


Determine How to Move Forward

Assuming that you want to continue on the path of entrepreneurship, just knowing what you did wrong isn’t enough. You also need to consider how you will approach things differently next time.


Photo:  © Alliance
Photo: © Alliance

Fortune has written before about the downsides of postmortem culture. While some business postmortems are written with an honest and unflinching clarity, others point fingers and lay blame, with their writers seeming to feel that by making a list of the reasons they failed, any bad behavior is excused.

The purpose of analyzing why your last business failed is to help your next business succeed.


  • If you scaled too quickly, mock up a plan that would have been more successful.

  • If you didn’t reach your target customer, make notes on what you could have done differently.

  • If your customer profile wasn’t sufficiently specific, decide what questions you’ll consider next time.


Knowing why your business fell apart is important, but knowing how to avoid the same mistakes next time is the actual point of analysis.


Own What You Did Right

With any business, there are mistakes, but there are also things you did right, even if they were small. You might have created an amazing team, or focused carefully on employee morale. You might have done a great job sourcing products and managing your supply chain. You might have had an innovative idea about how to provide feedback on employee performance.

Make sure your business postmortem includes the things you did right. Acknowledge the things that went well, and what you will incorporate into your next business plan.


Take Time to Mourn

As startup entrepreneurs, we invest our blood, sweat, and tears in our businesses. When they fail, it is inevitable that we feel a personal sense of loss and failure. Mourning can look like:


  • Taking some time off from entrepreneurship. Even if it’s just a day or a weekend, don’t feel like you need to dive into your next project right away.

  • Venting to friends and family. This is what support networks are for; talk to the people who love you about how you’re feeling.


When you’re ready, start to consider what you will do next.


What Comes Next?

Let’s be honest: entrepreneurship isn’t for everyone, and that’s okay. If you tried it out, and found that the long hours, the sense that you were on the line for every decision, and the pressure to constantly evolve and respond to the market wasn’t for you, there’s no shame in deciding to look for a 9-to-5 job to move forward.


Photo: © Ammentorp
Photo: © Ammentorp

Spin your entrepreneurship as a benefit on your resume and during interviews. You now have a deeper understand of how much work goes into smooth business operations, and are excited about the opportunity to deep dive on a particular topic, instead of needing to focus on the big picture.

But if entrepreneurship is still your passion, it’s time to move forward. What went wrong is going to inform your next decision.

Is there a particular area where you failed, and you need to sharpen those skills? Perhaps classes at the local community college, or a full-time commitment to an MBA program. You can also connect with other local entrepreneurs through your SBA chapter or Chamber of Commerce.

Whatever you decide to do, commit to it. Entrepreneurship is a hard road, but an exciting one. If it’s for you, then embrace it to the fullest, and search for success.

How did you keep focus after your business failed?


This article has been edited and condensed.

Margarita Hakobyan, CEO and Founder of MoversCorp, is a serial entrepreneur, creator and a business consultant. She is a business woman, wife and mother of two with a bachelor’s degree from the University of Utah with a concentration in International Studies and a Masters Degree also from the University of Utah with a degree in International Business. Connect with @moverscorp on Twitter.


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