Failure of any kind can be a setback for entrepreneurs, but it doesn't have to spell disaster. I'm the perfect example. I've been rejected by the Marines and I flunked out of law school. The real kicker came in 1998 when a former business partner at a debt-collection company of mine was convicted of fraud. Even though he admitted to committing the fraud without my knowledge, I was indicted on 57 felony counts and my assets were frozen. While I was cleared of all charges four years later, I wound up filing for bankruptcy protection and lost a personal fortune in business equity to the tune of about $3 billion. My only asset left was my house.
Sounds devastating, right? But despite my failures I have been able to pick up the pieces and come through it all with a strong self-image. I attribute that to having a healthy perspective on what failure should and should not mean to me.
When faced with any setback, here are five rules that have helped me over the years and can help you, too.
- Don't pretend it never happened.
People are often so anxious to avoid the stigma of failure that they refuse to admit what happened. Denial usually results in a host of other problems, including internal stress and delaying any effective remedy.
The late Dale Carnegie, a well-regarded lecturer and author of the bestseller "How to Win Friends and Influence People," said that when you're quick to admit that you screwed up, your peers will stop holding your feet to the fire and actually begin to comfort you.
- Avoid making excuses.
Some people wiggle past the truth by admitting to a problem they sugarcoat in excuses. I was one of them. At one point during my teenage years I was homeless and an alcoholic. At every turn, I told myself that all my shortcomings were not my fault.
My situation only improved when I stopped making excuses and focused on a productive goal. For me, it was getting my General Educational Development (GED) certificate.
- Don't confuse a failed goal for a failed person.
Sometimes people take the opposite approach from what I just described. They blame themselves for any and every failure, creating a pattern of negative self-reinforcement. Assuming you'll invariably screw up is dangerous thinking -- and can become a self-fulfilling prophecy. Instead of setting up a mental pattern for failure, ask yourself how you can improve.
- Remember, you are not alone.
People fail to reach goals all the time. Take baseball players, for example. They strike out multiple times over the course of a long, 162-game season. And when they fail, they do it in front of millions of TV viewers. The point is that we're not robots. Everyone's bound to stumble every once in a while.
- Focus on the lessons learned.
While I ultimately cleared my name after a felony indictment more than a decade ago, a lot of damage had been done. The only way to survive such a world-class level of failure is to focus on the future. Not many people can say they've literally lost billions of dollars and chalk it up to "business lessons." I'm currently rebuilding my company, which now has a portfolio valued at $100 million.