By Fatmanur Erdogan, Hürriyet Daily News, Savor Success, Speed Through Failure
I love the copious amounts of research and writing that come out of Harvard University. Whatever kind of information you are looking for, you can bet someone at Harvard has already studied the subject. All universities should expect such a prolific amount of publication activity from themselves. Being more research-oriented would certainly benefit universities in Turkey, more so than adding another me-too MBA program.
One report from Harvard’s Entrepreneurial Management Unit looks into the interesting question: Are successful entrepreneurs more likely to succeed in their next ventures than first-time entrepreneurs and entrepreneurs who previously failed?
The answer, according to the report, is yes.
The study finds entrepreneurs who succeeded in their previous ventures have a 30% chance of succeeding in their next venture. By contrast, first-time entrepreneurs have only an 18% chance of succeeding, and entrepreneurs who previously failed have a 20% chance of succeeding.
Another study from the Massachussets Institute of Technology agrees that serially-successful entrepreneurs are more likely to succeed in future ventures. Their research shows past entrepreneurial success increases the likelihood of future success when measured by company revenues. While luck might play a role in success, it seems that there is a skill to entrepreneurship, too.
Researchers attribute success in subsequent ventures to several factors, including the fact that investors prefer to put their capital in the hands of people they can depend on, and so once an entrepreneur has a good track record, it becomes relatively easier to get funding again.
They’ve also found that industry experience increases the likelihood of success – many former employees of Fortune 500 companies got their ideas for their new startups while working for their previous employers.
On the one hand, these reports tell us that if you’ve succeeded in the past, you are more likely to succeed in the future. It might make heading out on your own for the first time as an inexperienced entrepreneur seem even more daunting. But actually, if you look at this data from a different angle, it throws an entirely different light on the value of experience in entrepreneurship.
What is that different light? Well, the flip side of a statistic like “30% of previously successful entrepreneurs succeed the next time around” is, “70% of previously successful entrepreneurs fail the next time around”.
So don’t worry too much about failure. If 70% of even the best entrepreneurs fail at subsequent ventures, maybe failure isn’t something to take so personally. In the past, when you read motivational quotes in papers and magazines, you got excited and forwarded them to your friends, but then you went back to what you were doing before. Instead, now go one step further and put that advice into action, even if it might not work the first time you try it. Failure is just part of the game. Fail early, fail quickly, get it out of the way and move on.
But that doesn’t mean you should be cavalier about your entrepreneurial leap. Remember that you know yourself better than anyone. If you think you lack some essential business skills, invest in some training for yourself before setting out on what will most likely be a rough road. According to the U.S. Small Business Administration, 50% of small businesses fail in the first five years, and the top three causes of the failure are lack of experience, insufficient capital, and poor location.
Once you’ve got that basic understanding of the ins and outs of business, just go for it, and be prepared for failure. Be on the alert so if it comes your way, you can recognize it early, fail quickly, cut your losses, and move on.
There is no short cut. Even the successful ones fail often, they just learn how to recognize it quickly, so they can speed through it and spend more time enjoying the scenic drive through the successful parts of the journey.