Posted on March 29, 2017 @ 09:14:00 AM by Paul Meagher
There is no shortage of good news stories about startups and businesses that are "crushing it". This can lead to the mistaken belief that making it is easier than it is, that it is just a matter of will and determination. There are many examples of businesses that had lots of will and determination that nevertheless failed. While will and determination might be necessary for business success it is by no means sufficient.
You can't learn much by only studying positive examples, you also have to study the failure modes. You can certainly learn some things by studying how Elon Musk, Bill Gates or Warren Buffet achieved the success they have, but I would argue that you will probably learn more by talking with entrepreneurs who have experienced failure so that you can appreciate how many things can go wrong and how difficult it can be to be successful in business.
It is for this reason I would suggest that entrepreneurs need to cultivate a repository of failed business stories in addition to a repository of successful business stories. You probably don't have to go very far to find entrepreneurs who have started a business that ultimately failed. You might regard this exercise as a dismal undertaking but my experience is that it can be intellectually stimulating and enlightening to find out the many ways in which the world confounds our expectations. So instead of just seeking out mentors, perhaps we should also be seeking out anti-mentors, people whose business has gone down the tubes and who are willing to share their knowledge of what went wrong.
I'll leave you with a quote from the book Smarter, Faster, Better: The Secrets of Being Productive in Life and Business (2016) where author Charles Duhigg points out that those who are best at forecasting the future actively seek out both positive and negative examples:
Making good choices relies on forecasting the future. Accurate forecasting requires exposing ourselves to as many successes and disappointments as possible. We need to sit in crowded and empty theaters to know how movies will perform; we need to spend time around both babies and old people to accurately gauge life spans; we need to talk to thriving and failing colleagues to develop good business instincts.
That is hard, because success is easier to stare at. People tend to avoid asking friends who were just fired rude questions; we're hesitant to interrogate divorced colleagues about what precisely went wrong. But calibrating your base rate requires learning from both the accomplished and humbled. ~p. 196