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AMA - Business - March 1, 2021

Finding the Fortune in Failure

Learn How to Embrace Failure and Make Your Startup Thrive

In the start-up world we often hear phrases like ‘fail fast,’ ‘celebrate failure’ and that failing can be the best thing that ever happened. But let’s be honest: failure sucks.

At the very moment “the failure” hits you, often the last thing you’re thinking about are the positive takeaways, let alone documenting the failure – your heart is pumping faster, your face and ears getting hotter, your legs going so weak you momentarily question if they can even support your weight.

Failure can be a wrenching feeling. Thoughts and memories of everything you have risked on this venture, and all the promises you have made on the hope of its success come flooding through your mind, bringing with them intense feelings of pain, hurt, loss, anger, vengefulness, embarrassment…anything but logic or rationality.

However, time does heal, and reflection will heighten your perspective. That’s not to say the pain ever fully goes away, but that the value of the lessons learned because of that pain increasingly outweighs that initial emotion over time. This value becomes apparent in the new found clarity and focus – plus a touch of the confidence that experience brings – with which you take on another approach or venture in the future.

While the initial high of success and winning may be euphoric, there is little long-term learning that comes from it. The emotional reaction to a loss, however, with perspective and hindsight, are far more instructive. You want to understand why you failed, and successful entrepreneurs will doggedly delve as deeply as it takes to understand “why” to ensure their next steps add way beyond the value of a win.

“If, one day, you look in the mirror and see only success, know that you have in fact learned nothing, any humility has evaporated, and greater failure is on the way.”

-Simon R Turner, Managing Director, Founder Institute Ghana (FI Ghana)

The Topic of Failure

A lot has been written on the topic of failure, and several studies (e.g., CBI Insights) have pinpointed the top three root causes of startup failure being product-market-fit, running out of cash and disharmony in the team.

Extract from CB Insights 

When we look at ‘failure’ from a distance, it is easy to romanticise and sugarcoat it with inspiring quotes about the struggles entrepreneurs and scientists, such as Walt Disney or Thomas Edison, who had to go through several failures before reaching success. But what does failure actually feel like for entrepreneurs, especially in an African context? How did they manage it, and how did they bounce back?

To look at this with an African lens, FI Ghana held a virtual event with seasoned and serial entrepreneurs who have experienced successes and failures firsthand, with ventures spanning Ghana, Kenya, USA, UK, Nigeria and Côte d’Ivoire We dived deep into failure as a potential fast track for finding purpose and success while providing some practical advice on how to manage failure, especially when it comes to losing people’s trust and money. 

Accept failure as part of the entrepreneurial journey

FI Ghana Mentors and panelists invited us to challenge the way in which we think about failure. It is not something we can control, but is part of the process of becoming a successful entrepreneur, not a deviation from what you’re supposed to be doing.

“By default, you’re meant to fail to get where you need to be and, by default, it allows you to reprogram your mindset and get ready for it. Don’t shy away or avoid it but get through that as quickly as possible.” 

– Samuel Baddoo, Founder, Fleri

To build resilience in the face of failure, an important learning and mindset shift required is the decoupling of your own personal success from the success of your startup. That means the failure of a startup or project does not equate to personal failure, but might, in fact, be propelling you to your next personal growth phase. The “Founder First” principle, ie “Great companies start with great people, not great ideas,” is what makes a great entrepreneur, not just your successes but also your expertise built over years of trial, error, success and many failures.

This is the reason why Silicon Valley entrepreneurs and venture capitalists are increasingly talking about ‘celebrating failure’, because it is inherently linked with expertise. This is true in business as much as in any other discipline. Like physicist Niels Bohr once said, while studying the structure of atoms: “An expert is a man who has made all the mistakes which can be made, in a narrow field.”

Failure is part of any journey, and is arguably what makes it worthwhile, exciting and interesting, just like a Titanic movie without an iceberg would be as boring as watching a cruise ship cross the Atlantic (Sam). A mindset shift around failure is an essential starting point, but how can we prepare ourselves for the time when we hit that iceberg and the cruise ship starts to sink?

Marco Rovagnati, Innovation Consultant and Founder of Poa Poa Soaps talked about the importance of setting up guardrails and intentionally designing functions in your organisation that allows you to experiment with failure, shifting the narrative from failure to prototyping. “After launching several businesses and at least half a dozen pivots,” he said, “I think about failure in two buckets: “avoid it at all cost” and “actively embrace it”.”

The bucket of things to “avoid at all cost” are those that have been tried and tested, and that you can teach yourself online (which can be immensely time-consuming) or with fast-track, sprint programmes like Founder Institute. admin, operations, customer support, digital marketing – those are “basic hygiene” factors in business that are (relatively) easy to get right because they deal with the tangible management of the present. How to go about this is down to you, your team, and company culture.

In the second bucket are all the future-focused activities, such as new product development, prototyping and testing new features, finding your next expansion opportunity or underserved niche, launching Minimal Viable Products (MVPs) and finding product market fit. This is, by nature, a process of trial and error and it is essential that the ‘error’ or ‘failure’ part of the process is not interpreted as ‘defeat’. Make sure you have the right language and frameworks in your organisation to track and manage those processes and make sure you extract all the lessons from each test that you run. See what I did here? I’m shifting the narrative from ‘failing’ to ‘testing’. Words matter.

Josiah Kwesi Eyison, CEO and Co-Founder of the iSpace Foundation encapsulated this concept well when he said:

“Failure is not static, it’s an opportunity to learn, build and map out the way forward.

It’s a set of data that you collect as you go on.”

African culture can often be less experimental and unforgiving, but that shouldn’t make you operate from a place of fear.

Nana Prempeh from GrowForMereminded us that yes, mindset matters, but failing in Africa often hits you even harder. Resources (cash, support, trusted partners) are scarce, and Ghanaian culture, for example, tends to be majorly conservative and less open to taking risks. That is one of the reasons why you’d usually find multiple chain stores selling the same products, barely a few feet away from each other. “If it worked for Kofi, it would work for me,” goes the logic behind this approach. Startups, however, require innovation, dogged determination, brutally honest feedback, risk-taking and enough faith to put it all on the line, as well as a systemic shift from being a trader (lower risk traditional business models) to being an entrepreneur (new frontier businesses). FI ‘keeps it real, all the time” Nana went on to say.

It’s no secret that entrepreneurship is not for everyone, and that opportunities are not distributed equally across the world, but it is imperative that we don’t allow ourselves to operate from a place of fear, especially when looking at the extremal obstacles linked to our operating environment. For example, African startups are less served by outsourcing infrastructure, and tend to have a culture less open and tolerant of failure, especially when capital from friends and family is involved.

Fear of failing kills more businesses than failure itself.

Abandon fear and embrace knowledge, read the theory and case studies around your industry, reach out to experts and mentors and critically assess how everything you learn applies to your specific circumstance. Critical thinking is probably one of the most underrated skills of an entrepreneur. This is the ability to read an article, attend an event or have a conversation, yet remain aware that what you hear or read is the experience of an individual at a specific point in time – which may or may not apply to your circumstance – and being selective about what you take on and apply. 

The reality on the continent is different. You should read the mainstream narrative (e.g. Techcrunch, Entrepreneur, Forbes, etc.) but take it with a pinch of salt. You have to analyse it in context. This is not a quick fix but if you’re driven by passion, you will have (or find) the time. Read a lot and study the environment. Don’t go in with fear but don’t go in blind as well. This is learned from experience, which is again a reminder and a great way to sum things up, that “If your failure is not a lesson, it’s indeed a failure.” (Ogwo David Emenike, The Fortune in Failing: Decoding the Message of Failure). 

The global pandemic has clearly shown that pain happens when you’re not expecting it, whether you deserve it or not, whether you’re a kind or unfriendly person. We can overcome things, we can learn, we can be resilient, and ultimately we can live to fight another day.

Acknowledgements

To talk about failure requires people to open up, to be vulnerable, and to share things that can still be painful and in the case of our event, open to members of the public they don’t know. We thus give extra thanks to those FI Ghana Mentors who put the success of future entrepreneurs learning from this knowledge above themselves. Thank you to Josiah Kwesi Eyison, Marco Rovagnati, Nana Opoku W. O. Agyeman-Prempeh, Prince Bonney, Samuel Baddoo, Edison Gbenga Ade.

This article was based on The Fortune in Failure: Learn How to Embrace Failure and Make Your Startup Thrive virtual event, hosted by the Founder Institute Ghana, and written by groundbreaking.africa and the Maxwell Investments Group in partnership with  Founder Institute Ghana

The Founder Institute (FI.co) is the world’s largest pre-seed startup accelerator. Since 2009,  FI has helped over 4,500 entrepreneurs get the focus and support needed to build businesses that matter. Based in Silicon Valley and with chapters across 6 continents, 90 countries, and 225+ cities,  the Founder Institute’s mission is to empower communities of talented and motivated people to build impactful technology companies worldwide. With an estimated portfolio value of $20B+, the alumni of the Founder Institute have raised $1B+ in funding with 78% of the companies built still operational after 2+ years of graduating.

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Maxwell Ampong is an Agro-Commodities Trader and the CEO of Maxwell Investments Group. He is also the Official Business Advisor to Ghana’s General Agricultural Workers Union (GAWU) of TUC Ghana, the largest agricultural trade union in Ghana. He writes about trending and relevant economic topics, and general perspective pieces.

LinkedIn:/in/thisisthemax   Instagram:@thisisthemax   Twitter:@thisisthemax   Facebook:@thisisthemax   Website: www.maxwellinvestmentsgroup.com   Email: maxwell@maxwellinvestmentsgroup.com    Podcast: www.anchor.fm/einu   Mobile: 0249993319

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