October 20, 2014

The Value of Failure

Bounce by Barry Moltz, about startups and failureI don’t usually recommend business books to people because I am not a big fan of most of them. But I need to make an exception here. I want to urge people to read Bounce by Barry Moltz.

As someone who studies entrepreneurs and entrepreneurship for a living, I know that there is a big problem getting good information about the topic. Most start-ups fail, but people don’t like to talk about failure. So we have many more stories about start-up success than start-up failure, even though it should be the other way around.

Academics, like me, have written books that tell people the statistics about failure, but most people understand things better if they know both the statistics and the examples. So there’s a void out there. We don’t have a lot of good examples about start-up failure.

What I like most about Barry’s book is that it isn’t one of those feel-good-about-yourself-comeback-from-failure books that romanticize the notion of failure. As Barry writes, “The comeback is romanticized in society and totally overrated. This is a book about accepting failure as a normal part of the process, even when there isn’t something to learn. Failure that offers no real learning value jolts the business belief system. It is time for people to start telling their stories about these failures, which visit us all, without the redemption of any of the subsequent successes.”

Given that entrepreneurs are more likely to fail than to succeed, and even those that succeed have some failures along the way, it’s really important for people to figure out how to deal with failure. As Barry points out in the book, the typical kind of failure doesn’t result in the Rocky-movie-type redemption that most books on business failure discuss.

I’ve already put several examples from his book into my entrepreneurship class lectures. To me, his points about one-hit-wonders, the timing of failure, the random walk in business, decision making, and the rarity of the redemption-from-failure stereotype, are particularly important and worth the cost of the book.

But I also suspect that many people will be comforted reading about Barry’s failures, which he courageously talks about. After reading the book, I realized that my failures are nothing in comparison to Barry’s, and, human nature being what it is, that made me feel better about myself.

* * * * *

About the Author: Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of seven books, the latest of which is Illusions of Entrepreneurship: The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By. He is also a member of the Northcoast Angel Fund in the Cleveland area and is always interested in hearing about great start-ups. Take the entrepreneurship quiz.

24 Comments ▼

Scott Shane


Scott Shane Scott Shane is A. Malachi Mixon III, Professor of Entrepreneurial Studies at Case Western Reserve University. He is the author of nine books, including Fool's Gold: The Truth Behind Angel Investing in America ; Illusions of Entrepreneurship: and The Costly Myths that Entrepreneurs, Investors, and Policy Makers Live By.

24 Reactions

  1. Failure paves the road to entrepreneurial success and if one learns nothing from failure the road will be long with repeated, failing behavior. Learning and overcoming is the heart of an entrepreneur; without that, he or she is a dabbler in business ventures.

    The successful entrepreneur learns and responds quickly. They act decisively with a fish or cut bait mindset.

    The biggest failures are the ventures you learn nothing from.

  2. Scott, first of all, thanks for the book recommendation.

    Romancing failure does more harm than it helps. Embracing failure and learning how to make it work for you is a process that involves many variables. First timers struggle deeply with failure’s brutal honesty. But, if they can continue moving forward experience will allow them to learn and adapt.

  3. Hearing honest stories about failure without redemption makes at all too real for some business owners to admit. Face your fears, do something about it and move ahead.

  4. Gary,
    I agree that we need to learn from our failures. After all isn’t that what business ownership is all about? We make mistakes, find what works and fix what doesn’t.

  5. Good conversation. We need to get past the idea that there is always something to learn from failure or we can always repeat our successes. Success and failure are just part of the business cycle. If we can let go of both of these, and Bounce- that is take the next action based on where we are right now, it will get us closer to the goal we seek.

  6. Scott,

    Thanks for the review. I will get the book. It will be a good mental exercise to read this book at this time, keeping myself busy with a struggling start-up company. We have been around for circa two years and it has been a tough time, but we have a positive outlook for the future. I definitively think the book will have a special place in our library at Blue Chip Café & Business Center.

    Barry Moltz: Have you read Startup by Jerry Kaplan. My colleague read this book during his studies.

    All the Best,

    Martin Lindeskog – American in Spirit.
    Gothenburg, Sweden.

  7. Martin, I have not read it but I will be sure to pick it up! Thank you.

  8. Tom Edison’s take on failure:

    Thomas Alva Edison, relentlessly searched for a working filament for the electric light. After years of failure he met with his creditors including J.P. Morgan, who were demanding results. “Results?” Edison replied, “Results, I’ve got results, I’ve learnt 1,000 ways it don’t work!” Sources say he said it with pride.

    His 1,000 failures led to the light and a huge, growing family of products one of which is monitor you’re reading this on.

    Perspective!

  9. Gary,

    Great quote. Without failures similar to Edison’s where would we be? Failure has got to be a huge part of invention.

  10. I think that we can learn from failure- but not always. When my best employee left because her husband got a job in another state what was I to learn? Not to hire married people? When my best client got indicted by the government, what was I to learn? Not to do business with criminals?

    What holds us back sometimes is expecting to learn something from failure. It is not a prerequisite to success. When you fail, learn what you can if anything and move on- taking action will get us closer to success.

  11. Failure can be looked at as a great teaching–hopefully we learn from it. Great confidence in one’s self is really important and can get you through just about anything. Thanks for the book tip.

  12. Barry, I definitively have to get hold of your book. Maybe the reading will make me “bounce” up and down a bit! ;)

    Garry Hart: I think the Edison example is a great inspiration for trying “one more time”…

  13. It does not matter how many times we fail- no one will remember our failures more than us…another great quote by Wayne Gretzky- “We miss 100% of the shots we do not take.”

  14. Barry,

    That is so true. Why are we always so hard on ourselves? You’re right, nobody remembers our failures after time but we always will.

  15. I think because in our culture we are so addicted to success. We are a society of achievers. I just wish we could lower the bar a bit sometimes and “get in touch with our inner laziness” :-)

  16. Barry: I think you should be proud of your success story in the Land of Opportunity. If the rest of the world would think in the same way, it would be a great place to live in. I think you should strive for success and try to achieve you values. Set up stretch goals and go for it. After a successful step, you could become a bit “lazy” and take a mental break. ;)

    For inspiration, read Edwin Locke’s book, The Prime Movers: Traits of The Great Wealth Creators.

    Best Premises,

    Martin Lindeskog – American in Spirit.
    Gothenburg, Sweden.

  17. Thanks Martin- I think that the US is the land of opportunity – anything (and nothing) is possible. We should definitely DAB- Drive where you want to go, Accept the results you get, Build the life you want….
    I will check out Locke’s book- thanks

  18. Barry: I agree totally with your statement: “Drive where you want to go, Accept the results you get, Build the life you want.” Talk to you soon again.

  19. Here’s an excellent example of losing, learning, and winning.

    The Betamax VHS war of the 70’s is considered a classic marketing case study. Sony’s win in the HD market after that loss will be studied for many years.

    When Sony introduced Betamax in the mid 70’s, they were an emerging Japanese manufacturer, of then perceived, cheap electronic products. Sony Pictures did not exist yet and their attempt to corner the market failed.

    “The war of nerves has been fought in boardrooms, rather than high-street shops”. – From, Why Blu-ray is the new black in high-tech homes http://news.scotsman.com/scotland/-Why-Bluray-is-the.3790112.jp

    Blu-ray is icing on Sony Pictures cake, much like the Gillette Razor and razor blades. Excellent job of implementing what they learned from failure.

    Whether you fail or succeed, or just make it through another day, there is always something to be learned. I hope I never stop learning.

  20. Many times there are great things to learn. But we can also learn, that there may not always be something to learn. Letting go and moving on – bouncing can be learning too.

  21. I maybe a two year late to post something on this blog, still i want to express my thoughts after reading this post=). Failure, i think is really a portion of us being human. We fail in our relationships, businesses… we fail, we stumble, we fall but it doesn’t end there, we stand up, dust off ourselves and we learn… we become wiser, stronger and better. We learn from our failures,that’s good. i guess its stupidity to see other people’s failures and still do the same.

  22. Failure just is part of the biz cycle!

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