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.
Sadly, the simple answer is that you cannot, unless you have very deep pockets.
This is especially true if your idea is based around the provision of new and improved services. You can be sure that your existing competitors and new entrants to the market will try and copy your ideas, once they see they are popular and profitable.
To counter this you must have additional service improvements ready to be launched as soon as you see competitors beginning to catch up. Constant innovation is a fundamental part of entrepreneurship; some might argue it is also its most enjoyable aspect.
If you have a great product idea you should always take expert advice from an intellectual property lawyer about patent protection. In the first instance it is usually possible to receive some free advice and then to put in place basic and inexpensive protection in the UK.
Later, you need to be wary about spending too much money on trying to protect your idea all over the world before you have proved there is a significant market for your new product. But even if you decide to do so, it is always very difficult to take legal action against unscrupulous manufacturers in distant markets.
My advice for aspiring inventors is always to secure a strategic relationship with a reputable organisation locally that has a genuine need for the business benefits of the product that you are proposing.
They are very unlikely to behave unethically as it would damage their reputation in their local marketplace if they were seen to be exploiting inventors and engineers. They should also have the deep pockets that can protect your intellectual property, if necessary.
Inventors by nature are often solitary people who can find it difficult to work in teams and accept the guiding hand of authority. This can lead to trust issues, which is why finding the right strategic partner is of the utmost importance.
When the relationship with the supplier is working well, it becomes more like mentoring, where clever people with good ideas for new products are nurtured rather than exploited.
Originally published in The Mail on Sunday. Copyright ©Mike Southon 2012. All rights reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
One of my heroes is Murray Raphel, a brilliant, inspiring speaker and a most excellent marketer.
If you see any of his books, buy them. They're all good, practical, down-to-earth stuff bereft of meaningless jargon.
This is hardly surprising because his family ran (and for all I know still runs) a retail business in New Jersey. That's a bit like direct marketing. You know the next day if something has worked.
Murray once said something I have never forgotten: “Search the world and steal the best".
I do this all the time. And I advocate it for two reasons.
So wherever I go I look out for ideas I can steal and transfer — particularly America, where customers have the most money and the most highly-paid people trying to take it off them.
I see many examples in all sorts of places. Some have been transferred; some haven't. And I am just amazed at how poorly multi-nationals exploit this potential synergy.
One instructive case was a few years ago when I was running (or at least failing to screw up) the O & M direct Amex account. One of my main objectives was to move good ideas around the world.
We were selling an accident insurance policy with a pack that was doing OK in the UK (sounds like a song title, doesn't it?) and they had another doing as well in the US. Both were typical long-copy sells.
Then I saw some copy in our Singapore agency. A client had the idea of just letting people have the policy for a month at no charge, then they could decide to keep it or stop it.
The mailing looked like crap — and pulled like crazy. (Moral: good ideas matter more than fancy execution).
We tried it in Hong Kong. It worked there. Then in Spain. It worked there too. Then in London — and so on.
It was always hard work getting local markets to accept ideas from elsewhere because of the not-invented-here syndrome, but it made a lot more sense than starting from scratch.
The golden rule to bear in mind was laid down by Confucius: "Men's natures are alike; it is their habits that divide them".
If there is no cultural reason why something won't work, try it. Don't change it except where absolutely necessary.
Drayton Bird is a renowned direct marketing teacher, speaker and author. Find out more about him on his profile.