Entrepreneurship | Psychology
How to become a successful entrepreneur? Learn from failure, experts say
“Success consists of going from failure to failure without loss of enthusiasm.” – Anonymous
Learning from setbacks is the key to business success
We all know that failure is a part of life—it’s crucial to how we learn. So, it should come as no surprise that an entrepreneur’s past setbacks can be beneficial to the success of their current ventures. A recent study by SFU Beedie professor Pek Soh, published in the International Small Business Journal, found that entrepreneurs with positive attitudes towards failure gain insight from setback experiences and are more successful in their future ventures. In other words, setbacks help many entrepreneurs learn to become more resilient and capable of coping with the impact of loss.
Soh and her co-authors, Wenwei Zhang of Xi’an University of Architecture and Technology and Wenhong Zhao of Xi’an Jiaotong University, surveyed a pool of serial entrepreneurs and examined the relationship between their prior setbacks and the success of their current businesses. They found that while experiential learning through setbacks is important for entrepreneurs, the key to getting the most out of these experiences is having a positive attitude towards failure.
Setbacks are different from complete venture failures. They are characterized as sporadic, unannounced interruptions to operations that can trigger high-level learning. Missing deadlines, logistics foul-ups, being passed over for funding—these are all examples of setbacks in the study.
Soh suggests that a positive attitude towards failure helps entrepreneurs handle challenges and setbacks better and learn from their mistakes, rather than getting discouraged by them—good news for entrepreneurs, who face myriad challenges on the path to success. Those who experienced prior setbacks with a positive attitude were more likely to see them as valuable learning opportunities, rather than as permanent failures.
Other key success factors in business
The study also found that the relationship between attitude towards failure and business success was influenced by other factors, such as the support they received from their network. Soh and her co-authors show that having a supportive network that reinforces, rather than discounts, positive attitudes can strengthen the benefits of setback experiences for entrepreneurs.
There is a veritable bevy of entrepreneurship seminars, accelerator programs, and networking and mentorship programs available these days. While these opportunities often focus on the “X’s and O’s” of business planning for new ventures, a big draw for many novice entrepreneurs is the networking and the chance to learn from other entrepreneurs.
While talking to others and drawing on their experience is a great way to learn, Professor Soh cautions novice entrepreneurs on relying too much on others’ past experiences, suggesting that they should instead focus on their current experiences.
“People tend to misremember or be biased in reporting their past experiences,” Soh says. “Relying on these narratives may result in inappropriate guidance or change an entrepreneur’s worldview. It is better for novice entrepreneurs to ask about recent or current experiences, and keep a positive attitude towards the process of failure.”
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