The Wall Street Journal has an interesting article by Francis Greene titled Why Entrepreneurs Don’t Learn From Their Mistakes.
While second-chance stories are comforting, my research shows that entrepreneurs don’t learn from their mistakes. In fact, it’s the opposite: Fail once and you’re most likely to fail again. Believing in the myth only sets entrepreneurs up for more failure—and leads to disappointment and frustration.
Ouch! As someone who has had a successful and not so successful (1 failed) business, I won’t argue with what their research shows. You do learn lessons in business failures, but there are a few key problems that I see with thinking because you failed with one business that you are ready to try it again.
- What sunk your business the first time may not be the poison that sinks your business the second time.
- As this article points out, not having industry experience before launching can be dangerous. If you go from one industry to the next starting businesses, it can be risky.
- It is often easy to blame others or outside factors for your failures. With mine, I blamed a service that sole money from me. While that contributed to my business failing, I should have paid more attention to the contract and my business had internal problems that would have eventually ended the business with the same result. You can blame politicians, the economy, the market, competition, employees, etc. It doesn’t matter. If you haven’t taken personal responsibility, you probably aren’t ready to start a business again.
What can be done to better your odds of business success? One thing the article suggests is to identify what problems could sink your business and to do this exercise at the beginning. Former Intel executive, Andrew S. Grove famously wrote a book that claimed: “Only the paranoid survive.” It is true. Catching problems early on can save you tens of thousands of dollars. Perhaps you don’t enter that market or if you do, you are better prepared for the challenges you face.
While I never want to crush anyone’s dreams to own their own business, facing some hard truths early on is preferable to going bankrupt or building a business that owns you instead of you owning it.