Failure, in the past, was seen as grounds for punishment, especially for entrepreneurs. Societies from Ancient Greece and pre-modern Italy would publicly humiliate bankrupt merchants in the town square, as the whole village was made aware of their failed enterprise and outstanding debts.
Nowadays, however, the punishment of failure is not only viewed as immoral, but illogical too. Attitudes have started to shift, and many are beginning to look at failure from a different perspective. It is no longer seen as a setback, or a final destination, but as a necessary step in the road to success. In science, for instance, negative results are judged with the same importance as positive results. Researchers look at failures as data points and, therefore, an intrinsic part of the scientific method. Thomas Edison expanded on this idea when he said “I have not failed. I have just found 10,000 ways that won’t work.”
Businesses have begun to view failure similarly. “X” – a research and development company founded by Google – actively rewards employees for finding failures in emerging projects. Astro Teller, one of X’s founders, believed that these failures were a fundamental part of the innovation process.
While failure is no longer seen as a taboo, many entrepreneurs still feel like they need to hide their failures in a professional context. In reality, there is no reason to conceal past failures, even when it comes to investors. Investors are more interested in the people running the business than in the business itself. They understand that the company they are investing in now is likely to change over time. Because of this, sharing your failures can be beneficial as it communicates your adaptability to investors. Telling VCs about them gives the rebel entrepreneur the opportunity to articulate how they got around them, and what they have learned from the experience.
Failure is crucial to the development of an entrepreneur’s business. It is not an indication of incompetence, but a powerful reminder of our growth, our learning capabilities and our tenacity.