Over 44% of businesses fail within three years. Elbert Hubbard, an American writer, publisher, artist, and philosopher, once said that there is no failure except in no longer trying.
I recently saw a video of a speech by Frans Johansson entitled, The secret truth about executing great ideas, which explores the topic of failure within business and is the inspiration behind this article.
I have been working at Fasthosts for the past four and half years, and I have seen a lot of businesses come and go, many websites and blogs being launched and unfortunately many others that have closed.
These days there are thousands of new businesses being launched online each week and with crowdfunding sites like Kickstarter, the growth is on the up.
However, the unsavoury truth is that most of these ideas will fail. What is it that separates the likes of Steve Jobs and Richard Branson from the rest of us?
Herb Kelleher, CEO of Southwest Airlines
There is a common path for almost all breakthrough ideas. When we look at a successful idea, we look at the person and think they are brilliant, a genius and visionary. But when you look at how they made the idea happen it was really about taking risks and having lots of failures.
Muhammad Yunus is one such example of these geniuses. Muhammed is a Bangladeshi banker, economist and Nobel Peace Prize recipient. He is the man who developed the concept of microcredit and microfinance, something that is revolutionising the third world.
He realised that most people who are poor have very little debt, but enough to keep them poor. They do have some small assets and if someone can give credit to that asset we can create a micro loan.
When Muhammed first came up with the idea he went to the banks to ask if they would provide the small loans for these people in the third world. But that failed. He then tried to use his own assets to back these microloans but that also failed. He went back to the banks and said why don’t we try it on an experimental basis. That failed as well.
He then goes to International Foundation and has some success there. But the key was to make it into a company mostly owned by its customers. This was a great success and led to the growth of the whole industry.
If you look back through history it is a story that repeats itself.
Pablo Picasso, one of the greatest and most influential artists of the 20th century, a man who co-founded the Cubist movement, made over 20,000 works of art in his lifetime — most of which are in someone’s basement gathering dust. Do you know why? Because they were rubbish!
Albert Einstein, the most famous physicist of all time, published over 240 papers. Many of these have zero citations. No-one references them.
Does this diminish their brilliance? Absolutely not.
All of the greatest movie directors have made films that are duds. The Beatles wrote some songs that were terrible. Wikipedia started out as Nupedia and failed. Sweden’s biggest tourist attraction, the Ice Hotel, started out as a sculpture and failed to bring in visitors.
The point is that history suggests your first attempt at reaching your goal will not be the success you’d envisaged. It is just as likely that the goal will change from the one you have right now.
Failing is not a bad thing. It often teaches you far more than succeeding ever does.
However, this point of view does raise a valid question: “So why do we need strategy?”
The purpose of strategy is to convince yourself that it is going to work. It is not to come up with the right answer straight away. The purpose of strategy is to enable you to act.
Take the smallest executable step. Invest a small amount of resource (time, money, help from friends, scale back, locally first) and try lots of different ideas.
James Hay is the editor of the Fast Hosts blog.