Failure: An Entrepreneur’s Best Plan for Success
Angie Stocklin is the co-founder and former COO of One Click Ventures, an eyewear ecommerce retailer. Angie also is an Investor and Board Member with The Startup Ladies.
We’re programmed from a young age to be ashamed when we make mistakes. I vividly remember volunteering an answer in Kindergarten and instantly feeling a physical reaction to being wrong in front of my peers. I quickly learned the best way to avoid that embarrassment again was to only raise my hand when confident in the correct answer. This type of play-it-safe thinking follows us throughout our lives. It limits our opportunities for growth because it restricts the amount of risks we’re willing to take.
As entrepreneurs, avoiding risk just isn’t an option. Every day that we’re building and running our businesses, we’re making decisions and taking risks that might lead us to failure. Just listen to any episode of How I Built This and you’ll be reminded that all entrepreneurs fail. Let me repeat that: all entrepreneurs fail. The good news is there are steps for increasing our chances of success and getting us more comfortable with the idea of failure.
Practice Makes Perfect
Failure comes in all shapes and sizes. One surefire way to get more comfortable with failure is failure itself. No, really. Every time we fail and get back up, we’re increasing our confidence that we can mitigate that failure and move on. At One Click, we had a Lame Duck Award designed to celebrate failure. Not failure related to procrastination or poor execution, but failure because we made a decision that didn’t turn out like we hoped. We knew we needed everyone in the company to be comfortable with new ideas, experimentation, and taking risks so we could meet our aggressive growth goals.
The Lame Duck removed the stigma of failure from our culture and gave our team permission to take risks and fail more often. While our team members practiced failing on a smaller scale, they got more comfortable with the company taking risks on a larger scale. They learned to trust that we were taking calculated risks and that not every idea needed to be a win for the company to win overall.
Find Your Worst-Case Scenario
Wouldn’t it be lovely if the probability of our idea’s success could be calculated with a simple math equation? Most of our decisions are better served with a thoughtful scenario analysis:
Do I know all the possible outcomes of this experiment?
Am I comfortable with the worst-case scenario?
Is the best-case scenario worth the risk?
In elementary school, I stopped volunteering answers because I wasn’t comfortable with the worst-case scenario of being wrong. As an adult, I’ll take that risk every time because I’m comfortable not being right. The best-case scenario of learning something new is always worth the risk. In business, we’re generally weighing the risks of gaining or losing customers and money.
In our first year of business with Sunglass Warehouse, we decided to spend money on attending an industry trade show. We hoped to find new suppliers that could help us improve our selection and COGS (cost of goods sold). We also knew that we may end up wasting money that could have been used on marketing to acquire new customers. We weighed the potential outcomes before deciding that the ability to help our margins long term was worth the risk of reducing our short-term marketing budget.
Make a Plan
When taking a risk, it’s important to have a solid plan of action. No plan is perfect, but a thoughtful one can increase your chances of success or help you see where things went wrong. Looking back on our first trade show visit to purchase sunglasses, our plan was aggressive, but we were determined to come home with no regrets. Before the show, we analyzed products that were selling well on our site, looked at what our competitors were selling, researched what styles were popular with celebrities and fashion labels, and looked at our customer feedback. At the show, we visited more than 80 sunglasses booths and graded each one based on key points like quality, price and selection. We narrowed the list to our top vendors and placed small test orders with three of our favorites. Most importantly, we sat down a the end of each day to discuss what went well and what we’d do differently next time. The sheer size of the show was overwhelming. Lacking a plan could have paralyzed us at a time when we needed to take advantage of every precious second.
Create Your Fan Club
Surrounding yourself with a community of support and encouragement is essential for learning to tolerate risk and appreciate failure. Being part of a group like The Startup Ladies gives early entrepreneurs access to like-minded peers on a similar journey. This type of group fights the isolation common in entrepreneurship by giving insight into the wins and failures of your peers and allowing you to gather feedback on your ideas. In addition to fellow business owners, your personal fan club can have a variety of members that serve different purposes for where you are on your journey. Someone that offers never-ending encouragement is helpful when you need a little push to get going. Other times you may need someone able to help think through a problem and decide on an action plan. You might need someone to poke holes in your existing plan or pick up the pieces when an idea falls apart. Fill your fan club with people that love you, and then utilize them at the right times. Celebrating success is always better with friends but celebrating failure with your personal fan club can be just as fulfilling.
When it comes to being an entrepreneur, always raise your hand. When you’re right, you celebrate. When you’re wrong, you learn. Either way, you grow.
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