The pattern · Failure
Failing before succeeding: what the research says
Founders who failed before have the same chance of success as first-timers. A fall doesn't take anyone out of the game; what counts is what you learn.
Failing at a business doesn't stop anyone from building the next one. That's what the data show in one of the most cited studies on serial entrepreneurs: those who have failed before have practically the same chance of success as those starting a business for the first time. A fall isn't a sentence. Sometimes it's the first lesson.
What the research shows
Paul Gompers, Anna Kovner, Josh Lerner and David Scharfstein, from Harvard and the Federal Reserve Bank of New York, studied thousands of American venture-backed companies. They defined success objectively: the company went public.
The result, published in the Journal of Financial Economics in 2010: those who had already succeeded at a previous company had a 30% chance of doing it again. First-time founders, 21%. And those who had failed before, 22% (Gompers et al.).
There are two honest readings of that number. The first: past success helps, because those who got it right tend to have skill and because suppliers and customers trust them more. The second, the one that matters to someone on the ground: the previous failure didn't lower anyone's chance. Those who fell and came back were, at the very least, even with those who had never tried.
There's another fact that carries weight: the research only sees those who had the courage to try again. Those who gave up after the first fall don't appear in any second-company statistic.
Who lived it
In 1922, in Kansas City, Walt Disney opened his first animation studio, Laugh-O-Gram Films. A client who owed the studio money went under before paying. Disney cut staff, cut salaries, shrank the space to two rooms. He even slept in the office.
In July 1923, Laugh-O-Gram filed for bankruptcy. Disney left for Hollywood with little money and an unfinished film under his arm (Laugh-O-Gram Studio). Five years later, he introduced the world to a mouse named Mickey.
In Bairo's journey
The journey of Bairo Leandro Gonzalez Martinez is a list of falls told without makeup.
His partners pushed him out of a business he had helped create, and the idea stayed with them. With the capital he saved afterward, he came in as an investing partner in a company that wasn't what it seemed and didn't hold up, with many people depending on him. Next, he decided to build a currency, a bank and a network, and the project went wrong because the very people he had helped left him stranded.
He made each of those closed doors into a brick. The course left a method. The idea that came too early left an eye for the future. The partners left the lesson about whom to build with. Losing everything left the courage to do what he didn't know how to do. That's why he sums up life in one sentence: no is the foundation of yes.
How to develop this trait
- Do the autopsy, not the trial. List what depended on you and went wrong, what didn't depend on you, and what went right. That list is raw material.
- Separate the business's failure from your worth. Failure is an event, not an identity. A company closed; you go on.
- Keep what worked. Almost every business that closes leaves something standing: a loyal customer, a process, a skill. Take it to the next one.
- Come back with a smaller step. After a fall, test before betting everything. Validate the idea with little money.
- Tell the story honestly. Those who hide failure lose the lesson. Those who tell it, without drama and without blaming others, gain credibility.
- If the pain doesn't go away, seek help. Sadness that lasts weeks calls for professional care. In Brazil, CVV answers at 188, free, 24 hours.