Anyone who has picked up a business book, attended a panel discussion or read an entrepreneurship blog in the past several years has probably learned about the virtues of “failing fast.”
When this topic is discussed, emphasis is typically placed on the “fast” part. The idea is that entrepreneurs should spend as little time as possible invalidating bad ideas, which leads to iterating quickly and investing the maximum amount of time into ideas worth pursuing. I like this philosophy, and I do my best to live by it.
However, in my experience, the hard part about “failing fast” isn’t about being fast — it’s about recognizing a failure.
Entrepreneurs are often optimists and overachievers, people who simply won’t take no for an answer. As a result, admitting defeat is extremely hard, especially for first-timers. This leads to half-measures and weak pivots that protect ego but waste precious time and resources.
This affliction struck me many times in my early career, most notably when running SmartRaise, an affiliate marketing website I founded before starting RJMetrics. My inability to throw in the towel with SmartRaise cost me precious time and energy, taking attention away from more promising opportunities. It also taught me a lot about the virtues of good, clean failure.
Here are a few things I learned on that journey.
Emotions Are a Sunk Cost
In addition to blood, sweat and tears, entrepreneurship wreaks havoc with the calendar. In pursuit of big dreams, entrepreneurs miss nights out with friends, days on the beach, and even moments with family.
These sacrifices can create strong emotional ties between founders and their visions, making it difficult to let go. The hard truth is that emotional investment in a business is a sunk cost. It cannot be recovered, and using its existence to justify future investments of time is economically irrational. But try telling that to a passionate founder.
I fell victim to that fallacy soon after SmartRaise was started. The data showed that some of my assumptions had been wrong, and the economics of the business simply would not work. Despite my data-driven DNA, however, I hung on for dear life. After all that work, giving up couldn’t possibly be the best move, could it?
I spent weeks waiting for the data to turn in my favor, programming new features and trying out new marketing tactics. I “pivoted” a few times, but these weren’t true pivots, just small tweaks to the already disproved business model. My emotional immaturity trumped my economic logic, dooming SmartRaise to a slower, more painful death than it deserved.
Today, failure comes much more naturally because I concentrate my emotions on the bigger picture. Failures are educational and contribute to a (far away) life goal of becoming a great entrepreneur. This makes it a bit easier to rip off the Band-Aid when necessary.
Failure Is Endearing
If you are spending countless hours on a new project, friends and family will naturally ask you about it. After that, every time you see them they will want an update on how it is going. And who can blame them? Entrepreneurship can be exciting.
This pattern, however, can put you in an uncomfortable spot if you end up walking away from an idea. When I shut down SmartRaise, I dreaded seeing all those inquisitive friends — how would I explain that the site was no more?
What I quickly learned, though, was that no one cared nearly as much as I did. I came to realize that all those people asking for updates were not interested in how SmartRaise was doing — they were interested in how I was doing. I was touched, and they were immediately supportive of my new direction.
This experience also taught me that failure can be endearing. Adding some humanity to the image of the infallible entrepreneur opens the door to more candid conversations and genuine relationships. For me, talking to friends and family about my biggest challenges has led to far more meaningful and helpful conversations than blabbering on about success.
Know What Failure Looks Like
Most entrepreneurs are quite good at defining success. They build financial models. They set goals and work hard on achieving them. However, far fewer take the time to define failure. In what situation do you stop investing further resources? Is it anything short of the goal? If not, what exact evidence would cause you to walk away?
One of my biggest mistakes with SmartRaise was not defining failure upfront. I acknowledged that the project was experimental, but never defined the parameters of the experiment. Once I was in the day-to-day of running the business, I foolishly allowed myself to define failure and success as moving targets. This got in the way of failing, which prevented me from failing fast.>>>