3 Tips for Learning From Your Business Failures
My startup was born out of multiple failures.
As part of my first year courses during college, 29 of my classmates and I were assigned the task of building our own business. I was elected the CEO and we had to come up with a quality pitch, create a business plan and execute our vision. Our idea was to launch a general store on campus to sell bulk food and drinks to the student community. Market research showed that it would be a hit, given our school’s isolated location. We signed a contract with Pepsi, secured funding and locked down a space in the campus center.
Related: How to Start Up from Your Dorm Room
But then, over Christmas break while preparing to launch during second semester, I received a call from one of my professors. He advised me that the Barnes & Noble bookstore on campus had exclusive rights to the sale of “non-meal plan” food and drinks. I had now run into my first legal snag. The negotiations failed, the bookstore refused to budge and we couldn’t operate. I had to figure out what to do next -- my classmates were counting on me.
Though I've since started a different business that offers life insurance policy analysis software called lifeAssist, that experience was formative. Here are the three tips I learned about turning a setback into an advantage down the road:
1. Be ready and willing to pivot quickly. When our plans for the on-campus general store were squashed, we turned around and launched a shop called Threads & Ink where we sold a range of non-food products. It was up and running in four weeks and we ended the semester with a solid profit, both financially and experience wise.
2. Find win-wins. The bookstore’s retail food and drink sales had declined that year. They were in no position to accommodate further cannibalization for the sake of good will. In reflection, I should have been more willing to change the fundamentals of our business model. We could have bought food and drinks in bulk through the bookstore and become one of their marketing arms, helping to boost their sales while also making our own profits.
3. Ask more questions. In the end, I found out that one of my professors knew when he approved our business plan that we would run into this problem. He waited and watched. Our professor encouraged learning from experience and was interested in seeing how fast we would be able to turn things around and pick up the pieces. Entrepreneurship is all about taking risks, learning from failure and doing it all over again better.
Do you have any tips for learning from your failures? Leave a comment and let us know.