Failure is an inevitable part of startups. Even if your new innovative venture doesn’t fail, undoubtedly your expectations will clash with reality in one way or another.

This shouldn’t scare you. Innovation is born out of theoretical ideas that are modified by the real world. To win at the game of startups, you need to endure hundreds of (hopefully) small failures that lead you to the right iterations and direction changes (pivots) until you discover the right formula that would give you an oversized success.

Since failure is a part of the game, you need a good plan for how to deal with it.

If you are unprepared, startup failure could come close to ruining your entrepreneurial journey, especially on a personal level. If you learn how to meet failure with grace, however, it could be a source of professional growth and personal development.

1. Startup Failure On A Personal Level

We could argue that failure impacts you as a startup founder on two levels – on a personal, and a professional level.

As the biggest stakeholder in your business, the failures in your own venture impact you the most.

The unfortunate truth is that a lot of startup founders end up divorced and unhappy. It’s very hard to maintain a healthy work-life balance if your new venture requires your attention 24/7. And it’s even harder to justify the required sacrifices if, in the end, you have nothing to show for it.

Don’t deceive yourself – being a successful startup founder is an extremely hard goal. Not everyone is at a point in their life that can afford the full commitment required for success. For example, the time commitment and extremely high emotional and financial volatility of an early-stage startup don’t mesh well with a young family with small kids.

Jumping all-in into a startup venture might be better suited to entrepreneurs without a lot of responsibilities (i.e. straight out of college), or to older professionals that have built up enough stability and can bear the risk with little drama (i.e. your kids are older and you are financially well-off).

Moreover, you need to avoid the land of the living dead at all costs: a situation in which you are struggling with a barely alive startup for extended periods of time. To do this, you need to learn to validate your ideas quickly and efficiently and to discard the ones that don’t show promise fast.

2. Startup Failure On A Professional Level

In most professions, total failure can erode your reputation and make professional growth hard.

The opposite is true for startups: the people who are experienced in the field know that failure is a part of the game, and a person that shows the ability to deal with failure gracefully can be an asset to any project.

The most important thing that allows you to do this is honest communication with your startup stakeholders:

  • Investors: Be truthful about the business and spend your investor money frugally and responsibly. Investors are well aware that you could lose their money, but the manner in which you lose it determines if they would be happy to invest in you more than once or to promote you in their network. Good founders are just as valuable as good ideas.
  • Customers: Try to avoid situations in which you don’t deliver on your promises. This usually means keeping things simple in the early stages. Early adopters are flexible and they would be happy to forgive missteps if they can clearly see good effort and good intentions.
  • Employees: Don’t overextend by hiring too many people too quickly. If your cash flows are volatile it might be better to keep the in-house team small and to outsource most of the work to freelancers and consultancies. By doing this you minimize the chances of needing to cut employees once the times get tough. Building meaningful relationships with your employees is vital – even if this startup project isn’t successful, you might want to work with them for your next project.

In summary, failure is expected. You need to plan for it and learn to deal with it in a way that doesn’t leave burnt bridges and hurt feelings behind your back.

  1. Don’t fully commit to a startup project at a stage in your life in which you cannot afford it.
  2. Communicate truthfully with all your stakeholders. This way instead of burning bridges, you’d be building relationships. These relationships will be vital for your success in the long run.


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