Ask anyone why their multi-million dollar idea didn’t become a reality and you will receive the most common reply in startup land: failure. It’s a daunting experience for every founder, no matter how confident, to take the leap and dive head first into the world of startups.
Failure is a world that can prevent people from starting their business. While there is a high amount of risk, there can also be a high amount of reward. Managing risk and overcoming failure is what has caused some entrepreneurs to dust themselves off and start over again, stronger, to create businesses that today are worth billions.
Services like Honcho help entrepreneurs to mitigate that risk by providing startups and small businesses with a cost effective way to validate their ideas without a huge upfront spend.
“Our focus is really on enabling people to try and validate their idea and get that first dollar in the door,” says Honcho cofounder Matthew Pearson.
“That’s our whole focus and I think we’re in a great market to do that. We’re in a great time to do that and the appetite is there, it’s a very exciting time to be alive.”
There is a simple formula to achieving this mindset, which is to view everything as an experiment and avoid labelling imperfections as failures.
Failure can lead to a crucial pivot or the change of a particular feature on your platform. Failure can help entrepreneurs to grow a more successful business without losing it all.
At the point of failure, which is the point in time when an entrepreneur becomes aware that the risk is not meeting the reward, there is an “aha” moment: a key, pivotal moment that every entrepreneur who comes across failure should address. When things are going wrong, the best possible outcome of a failure is asking yourself where did it all go wrong, and what can be done differently?
For Australian entrepreneur Jonathan Barouch it was this “aha” moment that caused him to kill his former business venture Roamz and start up another called Local Measure.
Roamz was a social media startup that gathered and showcased tweets and Facebook messages. However, after launch, Barouch had to come to terms that no one was willing to pay for his product and it was time to pivot and change up his ideas.
Barouch told Fairfax, “It was like the moment you realise your baby is ugly. You don’t want to see it but after hundreds of comments you realise you can’t lie to yourself about it any more. To be honest, it felt like I had been punched repeatedly in the guts.”
Within 24 months Roamz was essentially dumped to make way for Barouch’s new startup idea Local Measure. The new idea still worked around social media, however focused on the tourism industry by analysing geographically-based customer feedback across a wide range of channels.
Local Measure brought on clients like Sea World, Accor and News Corp and from last year reached revenue in the “single-digit millions.”
“Failure is natural. When you’re learning to walk there’s a pretty high failure rate. You don’t stop trying to walk because you fail the first time. The trick is to fail in a safe environment so you can get back up quickly and try again,” says Pearson.
“In business, you’re probably not going to get it exactly right the first time either. So do it safely: find a way to start small, find your first customer without a huge financial or time commitment. This way, if it doesn’t work out it’s not crippling, you can dust yourself off and try something else.”
Australian entrepreneur Nikki Durkin also knows what it’s like to fail, but more importantly she knows what it’s like to get up and grow from her failure. In 2011 Durkin began working on her startup 99Dresses, an online fashion trading platform for women.
Four years after starting her venture she announced on a Medium post the end of an emotional rollercoaster and her business. While pointing out her disappointment with the failure of her startup, she also acknowledged the many things she has learned. Without having tried and taken the risk Durkin said she would have never learned how to capital raise both nationally and internationally.
“Most startups fail, and yet this industry doesn’t talk about failure nearly enough. I’d encourage anyone who has failed to write about how it felt, as I can’t tell you how much that would have helped me in those final months & weeks,” wrote Durkin in her post.
Since publishing her failure story, Durkin received an outpouring of support from the startup community. Fast forward two years and Durkin has refreshed and started a new business venture called CodeMakers, which builds software and programs to teach high school students how to code.
The reality with startups is, if high levels of failure didn’t exist then the reward wouldn’t be so great. Failure above all else is a learning experience, so it’s something not to be feared but accepted at the right time.
“That’s what Honcho is trying to do as well by removing those risks,” says Pearson.
“Instead of spending all your money up front, spend $29 a month and just try your business idea, if it doesn’t work, try again, try something else, pivot a little bit and keep going. I think the tragedy is when people put all their eggs in one basket; you never really know if something is going to work until you try it.”
Image: Nikki Durkin. Source: Creator.
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