Failure is terrifying, but it’s also surprisingly instructive; success without failure often takes away from any sort of underlying lessons. Some investors even prefer to fund entrepreneurs with some sort of setbacks under their belts, since it tends to bring humility to decision-making. First-time entrepreneurs learn nothing if success comes easily, and it betrays a major level of hubris. Great entrepreneurs experience all sorts of setbacks, whether it’s raising too much capital too fast, hiring the wrong people, focusing on the wrong areas, choosing the wrong price, growing too fast or seeking too much press.
Such mistakes are all natural, but an acceptance of ones’ own failures is a key ingredient to letting the modern startup industry flourish in the United States. Few things are more inspiring than that of the comeback. The story of the underdog whose grit and determination kept them going in the face of countless obstacles. Abraham Lincoln lost eight different elections and failed in business twice before becoming one of the most influential figures in American history. And Steve Jobs suffered a major business setback before his comeback completely changed the face of modern technology. The entrepreneurs who built Silicon Valley relied on the scientific method of trial-and-error to improve their models, one of the most valuable strengths of American business. In Europe and Japan, those who fail become ostracized, and have an infinitely harder time raising capital for their ventures. Such an approach towards failure is only likely to kill the entrepreneurial spirit.
By lowering the bar for risk-taking in all forms, whether that be liabilities, work-force flexibility and de-stigmatizing businesses that don’t succeed, could encourage more innovation and job creation. This is of course easier said than done; in cultures like Europe and Japan, the perception of failure isn’t going to simply change overnight, but lowering the bar and making capital more readily available to those who have failed can be one way. Otherwise, it could risk ruining the entrepreneurial spirit, a terrifying thought indeed.
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