Failure. It’s the thing that entrepreneurs fear the most, a perennial threat to livelihood that lurks in the background of every decision and wrong turn.
Recent figures released by credit reporting agency Dun & Bradstreet show the number of businesses that fail remains at historically high levels.
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A total of 2,340 enterprises fell over in the March quarter of this year, on the back of 10,039 business failures in 2010, when the number of enterprises that went to the wall jumped by 23 per cent.
But is a business failure really such a bad thing? In the US there is much more acceptance of business failures and there is an understanding that entrepreneurs can learn a lot from having one, if not more, of their projects fail to fly.
One of the US’s most famous presidents, Abraham Lincoln, survived numerous failed businesses and botched attempts at entering Congress before finally achieving success.
We spoke to three business people who walked away from a venture before going on to bigger and better things as a result of what they learned from their experiences – and how they managed to dust themselves off to try again.
US serial entrepreneur Justin Kan, one of the pioneers of the “lifecasting” phenomenon has first-hand experience about what you can learn from making mistakes in business.
One of his first ventures was an early version of his existing business, Justin.tv.
He says: “We started Justin.tv in 2006 as our own reality show, with the idea of carrying a camera around 24/7 and trying to do entertaining things.
“We worked really hard to get the technology right and when we launched we got tons of press on the Today Show and MTV and other shows.
“After we got all this coverage people were going to the site, but they weren’t staying to watch.”
Kan sought some initial feedback from viewers and learned some hard lessons.
“We found out we were pretty boring to watch,” he says. We’re really engineers and we’d failed to make an entertaining show.
“But we also learned that there were a lot of other people out there who wanted to make their own shows.”
He took that feedback on board and turned Justin.tv into a platform where anyone can broadcast.
“We now have more than 30 million unique visitors a month and several million people have created their own channel on the site,” he says.
That wasn’t Kan’s only experience with a failed business idea. He also started Kiko, a calendar that could be used with Gmail, when he was straight out of college.
“We were students, so we didn’t have a lot of appointments and no real use for a calendar, so we didn’t know how to build a good one and it didn’t get any traction,” he says.
“Two months later Google came out with its own calendar and killed the business, but we eventually sold the software and the site on eBay for $258,100, which wasn’t a bad result.”
He also experienced trying times before he cracked the big time.
After buying and then selling a landmark Sydney pub, The Roxbury in Glebe, McEvoy came up with a concept for an internet business called Booking Angel.
The idea was that restaurants would pay a small fee for bookings made through the site.
“The site got some traction and I ended up in the US crashing on friends’ couches looking for investors,” he says.