Most entrepreneurs know that there is a high probability of failure for any new venture they may launch, especially in South Africa where statistics show that over 60% of small businesses fail within the first year.
But failure doesn’t have to mean the end of a business – if anything there are failures that can move you in the right direction, says Simon Dingle, a serial entrepreneur and technologist.
Dingle is an advisor at AlphaCode, a fintech development hub that identifies and cultivates financial services entrepreneurs and serves as product manager at Curve, a company that works to simplify the management of finances through an online app.
Dingle is also the co-founder of Deathcard Media, a company that creates content for agencies, companies and individuals, Reshare, a website dedicated to promoting freedom and access to information, and Phantom Design, a entrepreneurship advisory firm, among others
The secret to getting this right is to test any new idea using the right methodologies to validate or invalidate your original hypothesis and to reframe what could be traditionally viewed as ‘failure’ as a new discovery. The idea being that businesses don’t stumble on the right path until they’ve gone down a few wrong ones.
One of the most well known and popular methodologies used by entrepreneurs to test out ideas is the popular Lean Startup Method which focuses on repeatedly and quickly testing an idea within the right market and using the feedback (whether negative or positive) to refine ideas.
Thoroughly testing an idea can mean the difference between a failure you can learn from and one that may take you years to recover from, says Dingle who readily admits to having faced similar failures as a serial entrepreneur.
Here is what Dingle has to say about failing quickly and cheaply and how small failures at the beginning can save you from even bigger failures later on.
Q: What does failing in the right direction mean?
It means you are applying science to your business, testing hypotheses, and rapidly iterating in the right direction. When the correct methodology is employed, failure becomes something you seek out and leverage, and which makes your business anti-fragile (has increased capability as a result of withstanding failure while continuing to improve). It means testing ideas quickly and cheaply before they become expensive mistakes.
“When you’re failing at a big, beefy project that was initiated before testing hypotheses and assumptions, you’re failing in the wrong way”
Q: How do you know when you’re failing in the right direction?
When you’re failing quickly as part of a methodology that seeks to answer questions rapidly and cheaply, you’re failing in the right direction. When you’re failing at a big, beefy project that was initiated before testing hypotheses and assumptions, you’re failing in the wrong way.
This is the key difference between big, dying companies and the young, thriving startups that are disrupting them. The key question to answer is why are we doing this? Is it because someone with a big ego decided we should, or because we’ve established that the time and market are ready for this idea, and we’re the best team to do it?
Q: Are there strategies for learning from failure?
It’s more of an overarching strategy that employs design thinking to test, learn and adapt. If that is your plan, then learning from a failure is part of a natural progression.
Q: Can you share your experience of failing in the right direction?
This is something that has happened repeatedly in the last three fintech businesses I’ve been a part of, where we start by listing hypotheses and assumptions on every project, and then seek out ways to validate or invalidate them. At Curve ( a financial management app) this helped us go from hiring to [completing] a complex product launch in under eight months.
“When the correct methodology is employed, failure becomes something you seek out and leverage, and which makes your business antifragile”
Q: What has been the most significant benefit of hypothesis testing?
I haven’t had a failed business. Only failed ideas that were replaced by better ones. Small failures at the beginning saved us from big failures that would mean our end.
Q: Do you think failing at entrepreneurship should be won as a badge of honour, particularly in South Africa?
There’s a difference between a business failing because of bad timing, poor execution and a failure to test ideas before building a product, and those that are iteratively and purposefully failing as part of a design thinking process. The former deserve to fail and shouldn’t be praised for it. The latter are failing in the best possible way.
Q: What’s the best way to bounce back from failure?
If you’re doing it right then there’s nothing to bounce back from, because you failed before it cost you anything, and you expected to fail. If you’re doing it wrong then you deserved to fail and should consider design thinking in the future, or find a safer job where you can play solitaire all day and be less of a liability.