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Step 1: Start a business. Step 2: Fail. Step 3: Start a business. Repeat as necessary.

This story appears in the April 2002 issue of Entrepreneur. Subscribe »

On his first try, Edmund Hillary failed at climbing MountEverest. But he lived to share his story with an enthusiasticaudience in England, shouting, "Mount Everest, you beat me thefirst time, but I'll beat you the next time, because you'vegrown all you are going to grow, but I'm still growing!"Hillary's boast was a bit off: His second attempt was a failureas well. But he persisted, and on May 29, 1953, Hillary and hisporter, Tenzing Norgay, were the first humans to climb theworld's tallest mountain. Or at least the first to live to tellthe tale. If Hillary, now 82, had given up after his first try, hemight still be an anonymous beekeeper living in New Zealand.

"We went fromthe New Economy to the New Reality before anybody had a chance toenjoy it."

Running a business is a little like climbing Mount Everest:There's a great chance you're going to fail. The mostcurrent figures from the SBA show that 550,000 businesses closed in2000. And an SBA study shows that only 39.5 percent of companiesmake it past their sixth year. And it's gettingtougher-especially to find funding. "We went from the NewEconomy to the New Reality before anybody had a chance to enjoyit," says Emory Winship, managing director for Conversus GroupLLC, a New York City consulting firm that assesses and turns aroundventure-backed start-ups that are in trouble. "Entrepreneurswent from millionaires on paper to paupers."

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