A young entrepreneur (let’s call him “Turk”) approached me at an event recently, and he had an interesting dilemma.
“I’m starting a new venture,” he said. “And I think it’s really good. But how do I make sure I’ve put together all the right pieces so I don’t fail?…”
Oh, the $64,000 question….
He went on. “…. Because I don’t want want to be thought of as a failure. I really don’t want VCs to associate me with failure.”
Well, first of all, as I told Turk, there is NO way of knowing if all the right pieces of a venture are in place for success. If there were, venture capitalists wouldn’t be striking how 80-90% of the time on their investments. Besides smarts and hard work, startup success still requires good helpings of timing and luck which aren’t in any founder’s control.
Because of that, VCs are not perturbed by failure. Failure comes with the territory, and what VCs will evaluate is how you handled that failure.
Did you learn from that failure and pivot quickly into a new business model? Refine your marketing and rollout plan? Realize that you needed different skill sets in your team and start recruiting for those skills? Or did you stubbornly continue down an unfruitful path wasting months of time and money?
Nobody plans everything correctly and makes the right decisions 100% of the time. Almost all successful companies have done their share of pivoting along the way. The important part is that they didn’t spend long periods of time wallowing in what was not working. After all, AirBnB started life as an air mattress rental company.
The point is to learn from those failures and move on quickly, or as I like to say: Fail fast, fail cheap.
How has your startup pivoted?