Are our entrepreneurs “safe to fail”?
Why is it that we in Britain seem to see failure in such binary terms? When it comes to failure – whether in sport, work or politics we seem able only to shun it or revel in it. We’re usually either utterly triumphant or “gutted”, but find it hard to accept a middle path, in which failure is welcomed as a natural and unremarkable aspect of development.
Yesterday I went up to Sheffield for the MADE Entrepreneurs’ Festival, now in its third year and growing rapidly. The day started on the “Entrepreneurs’ Express” from St. Pancras. Morning commuters on our carriage were bemused to suddenly find themselves part of a “speed networking” exercise led by the jovial and irrepressible Oli Barrett. The entrepreneurs I met were just as I always tend to find entrepreneurs: highly energetic, bright, irreverent and interested in everything. In short, fun to be around.
The day itself was impressive, not least because of the scale of attendance and the calibre of the speaker line-up. The talks and panels had a strong narrative thread and tackled different, relevant aspects of starting, sustaining and exiting a new business, drawing on the first-hand experiences of entrepreneurs.
All good. But early in the proceedings a notion was introduced which seemed to have acquired the status of collective norm by the end of the day, without any challenge or questioning. Speakers, panellists and guests alike all broadly adhered to the common line: for entrepreneurs consideration of failure is not an option.
Sure, some seasoned entrepreneurs ruefully recalled various screw-ups and hard times. They were motivated by the desire to save others from similar mistakes. But the gist of the common remarks I heard and noted down during the day included the following:
“don’t listen to anyone who tells you your business idea might not work – just do it any way”;
“let’s ban talk of failing”;
“if and when you fail, just keep going”
Now some of this is understandable and right, given the purpose of the conference to inspire confidence and “can-do” spirit among the nation’s would-be entrepreneurs. And no doubt some degree of stubborn refusal to countenance defeat is going to be an asset when you’re an entrepreneur risking all to start a business. I get that.
But it seemed rather paradoxical when the reality of what many of the same speakers do – as investors, stars of “Dragon’s Den”, venture capitalists, banks and so on – is give precisely the opposite message. They have to, and frequently do say “don’t give up the day job”. It’s not wilful negativity to acknowledge that some ideas are rubbish, and sometimes people (and their poor families) are better off knowing it. People in these roles serve an important selective function in reducing the stock of duff business ideas, and increasing the stock of potentially good ones
Now we can of course criticise how well they do this, and the kinds of structural or cultural constraints that prevent them doing this better, or fairly. There are many stories (as we heard on the day) of people who got knocked back on multiple occasions, only to triumph and prove the doubters wrong. But rather than denigrating them, it seemed to me that we should be welcoming “critical friends” when we are seeking to start an entrepreneurial venture. Sceptics can be immensely helpful. It’s how we respond to them that counts.
These encounters help us increase the chances of succeeding, and if we don’t, failing safely. It’s infinitely preferable to find out if a business isn’t going to work without having first bet your house and life savings on it. That’s why our recent research on the informal economy shows how informal trading performs a vital but rather unheralded role in helping entrepreneurs test their business plans while holding onto their financial safety net. It may not be legal, but it’s a rational response to uncertainty and risk.
We need more spaces and opportunities in life in which it is ultimately safe to fail, quickly and often. In the business context, this is offered by, for example, incubators programmes that seek to protect and nurture the business through its early, risky life-stages. School and student enterprise societies and initiatives like Tenner Tycoon help to do this even earlier, giving young people a “safe-fail” experience of management, and we should encourage more along these lines if we are to create the entrepreneurial culture we need.
But it goes wider than this. Entrepreneurialism is about gauging risk and reward, and spotting an opportunity to maximise the latter while minimising the former. If this is capability that is required of all of us – regardless of whether we ever start a business – more of us need more opportunities in life to fail safely.
In our turbulent and disruptive economy, entrepreneurialism and experimental learning is as vital to all of us in the workforce – from conventional employees to the long-term unemployed – as it is to business starters. But employees are getting increasingly risk averse as they fear for their jobs, and for those out of work or education, there are precious few opportunities for “trial” let alone “error”. We are stifling our entrepreneurial tendencies just at the time we need them most.
What are the safe-fail environments that are the most effective in helping people acquire a mindset that is able to seize opportunity, but also balance risk?
Where did you learn important life lessons by trying new things in a “safe-fail” environment? I would be interested to know.
We mentioned informal economic activity earlier. People often anecdotally cite gap year travel as one such context for young people. I would also argue that certain kinds of participation in sport is another. In fact Duncan Goodhew, the Olympic swimmer made a cameo appearance at the end of the MADE festival, but only to reinforce the “no failure” and “only excellence” mantra.
Most professions have safe-fail environments in which people learn their trade. But are there features of some which make them more effective than others. What could it mean for the development of a new cohort of entrepreneurs?
It might be interesting to define this more carefully and conduct some research into the variety and number of such contexts in UK society, along with the evidence – if it exists – to indicate their social and economic value.
By cutting “designed failure” out of the discussion at the MADE festival, I felt they missed a trick in an otherwise great event – to understand and encourage more of the experiences that build our collective entrepreneurial capability.