I’ll be the first to admit, watching your startup fizzle out feels like the end of the world. You’ve hyped everyone up over the last year or two explaining how great your idea is and now you have to face the same people that told you it would never work. Where million dollar hopes once lived, now stands a broken dream and an entrepreneur wondering if they really have what it takes.
I know that feeling very well. Five years ago, I had huge dreams to build a musician-based social media site to take the world by storm. It didn’t. In fact, it didn’t even generate a light sprinkle.
I bootstrapped my way through product development. I exhausted my nest egg until there were no funds left to go forward. However, with a bit of creative thinking, I was able to turn a failed business into triumph – and with the right know how, you can too!
If you’ve experienced a business failure or setback, it’s not the end of the road. If you take the right steps, you can come back stronger and more capable. Here are the 5 steps I took to turn my business failure into a successful venture.
1. Examine the failure
After a business has failed, many entrepreneurs hope to forget everything about the situation and move on. However, those who find success in business are individuals who continue to persevere against the odds.
Just because one venture didn’t work, doesn’t mean the next will suffer a similar fate. The key is to identify the exact reasons why you failed. It’s not how many times you fall, it’s how many times you get up; but it’s better to figure out why you keep falling in the first place!
Failure in business doesn’t necessarily mean you failed, it just means you were unable to effectively overcome obstacles. Obstacles aren’t always negative either. There are immense learning opportunities in every success and failure.
In fact, studies show those who have started previous businesses are more likely to succeed than first time entrepreneurs. According to the National Bureau of Economic Research, serial entrepreneurs have a major advantage, “If the owner of a new establishment has owned one prior business, the probability of exit for that new establishment falls by 7 percent.”
Before you launch your next venture, perform a real analysis of your business and identify the weaknesses. In most cases, multiple factors led to the demise of your business. Be honest in the assessment of your journey. Find solutions to avoid or overcome those obstacles.
2. Never make the same mistake twice
As an entrepreneur, you will make a million mistakes on your way to success. The key is to avoid making the same mistake more than once. Now that you know why things didn’t work out with your previous venture, you can avoid the same mistakes in the future.
It is impossible to launch a business that is void of any challenges. Yet when you have identified prior obstacles it will allow you to reach success much quicker.
Don’t just learn from your own mistakes, learn from other people’s mistakes too. Read biographies about other successful entrepreneurs. Become familiar with the obstacles they faced. You’ll notice a pattern. Some of the most successful people suffered and overcame their biggest failures.
It was during this step that I found the inspiration for my second business, a venture that actually succeeded. In my first startup, I built too large of a solution without testing it along the way. As a result, our budget quickly wore thin prior to launch. When we finally launched, we found that no one really wanted what we had spent so much time building.
3. Learn new business skills
Sometimes, failure is a result of lacking skills. Fortunately, it’s never too late to learn a new skill. The only thing holding you back from learning is time and effort. You can easily find online courses to strengthen almost any skill if you are willing to invest the time needed to do so.
Your current skill set may limit your ability to find new inspiration. If you have a strong financial skill base, many of your ideas are going to revolve around what you are good at – finance. As you expose yourself to different skills, you create the ability to find new problems that can inspire innovative solutions. Successful businesses solve problems. The more problems you can identify, the more opportunities you will have to create something that succeeds.
After my business failed, it became my mission to learn everything I could about launching a startup. I dived deep into learning new ideas, market test validation, funding documents, pitching to investors, marketing and more.
I also started to volunteer some of my time to help promising startups with my newfound knowledge. The startups benefited greatly from the free labor I provided, but I was the one who received the most benefit. While volunteering, I noticed issues that startups faced, and was able to see exactly how they managed obstacles as they rapidly expanded. As I noticed more patterns, I couldn’t stop coming up with great business ideas!
4. Find mentorship and community
Good athletes become great when they surround themselves with other talented athletes and accept mentorship by amazing coaches. Likewise, succeeding after a failure means building community with others who have been there, done that!
Become a part of your local startup scene and join online entrepreneurship communities. There is power in active membership with likeminded peers. This allows you to access people from a variety of industries with different levels of experience. It’s likely you will find someone who can offer valuable insights and support.
When you’re recovering from a failed business, being in a community will allow you to discover that you aren’t alone. Many entrepreneurs lost out on one business only to find success later down the line. Their stories will inspire you as you move forward in your journey and motivate you through difficult times.
In my case, I searched to find a startup founder that had already achieved the goals I had set. Unfortunately, we didn’t have a preexisting relationship so, I had to be creative in my approach. I applied for a job at his startup. To my surprise, I was hired. I worked as close with the founder as possible; paying attention to how he solved problems and grew his business. He mentored me multiple times a week without ever even knowing he was mentoring me. Entrepreneurship is about solving problems. If you have a problem, find a mentor, be creative and solve it!
5. Get back on the horse
Just because you missed a swing doesn’t mean you’ve struck out. Even if you did strike out, it doesn’t mean it’s the last chance you’ll get at bat. There is one certainty though – if you never step back up to the plate, you’ll never hit a home run.
Fail fast to succeed
Once you’ve discovered and strengthened your weaknesses, sharpened your skills, and have been inspired by communities and mentors to come up with a new business idea; it’s time to saddle back up on the horse and take another ride. You may fail again, maybe even five more times – but if you continue to correct your mistakes and ride again, your business success is inevitable!
Mike Sims is the owner and founder of ThinkLions; a team of app developers and business plan writers that has helped dozens of startups bring their technology to life. With a background in business development and marketing, he works closely with entrepreneurs around the world – consulting them through challenging situations and identifying valuable strategic opportunities to advance their businesses.