Entrepreneurship is a long road. Founders stumble, learn, and begin again. | Photo by Aha!
The failure of entrepreneurs is our greatest strength
There might be nothing more American than a kid running a lemonade stand or mowing neighbors' lawns. I love that we encourage children to try their hand at business before they are old enough to understand much about delighting customers or how a business actually works. No one expects them to build a lemonade empire. We celebrate that they wanted to serve others and create a small form of value exchange. So why do some people start to question the lemonade stand when it becomes wildly successful?
Starting a business is an act of optimism. You believe you can create something another person will love as much as you do.
Both success and failure must be celebrated, because each requires entrepreneurship. And entrepreneurship requires ambition and freedom. I think we sometimes take for granted how extraordinary it is that we encourage this kind of ambition. We give people the freedom to create value for others and the opportunity to benefit when they succeed.
Building anything new means accepting that it might not work — even if that seems implausible when you start. Sustaining a new business is difficult. Fewer than 3 in 10 U.S. startups are still operating within eight years.
You can believe deeply in an idea, work hard to bring it to life, and still fail. And there is real pain in a business failing. It can mean walking away from years of work and everything you invested. If you built a team along the way, you are not the only person affected.
Yet plenty of entrepreneurs do start other companies. You do not start the second company with the same experience you had when you started the first.
Chris and I had both built successful software companies before we started Aha! And we have seen how hard it is to sustain excellence for long periods of time. That experience influenced many of the choices we made about Aha! in the beginning — including what we prioritized and the core values we wanted to guide the organization.
Other entrepreneurs start again after a very different outcome. A friend of mine who is an investment banker was just telling me about someone who built a large beer business, only to see consumer tastes turn and lose the business to creditors. Now he is pulling together an investment syndicate to fund a new beverage business he is passionate about. The fact that we live in a society that makes that possible should be cherished.
The freedom to pursue an idea includes the freedom to fail at it.
Having the freedom to try does not mean everyone has the same resources to start. There are very real limits that make it harder for many people to start a company or try again after one fails. When Chris and I started Aha! we were fortunate to have the means to invest a small amount of our own money. We had choices available to us that others might not.
Some people question why we should celebrate capitalism: a system that can richly reward business owners and entrepreneurs. We can argue about the flaws in our economic system. There are plenty. And there are inequities. But I believe capitalism has created more positive progress than any other economic system in human history. I have no doubt that as long as we keep space for it, it will continue to do so.
If that is true, then we should consider the consequences of turning against it. What do we risk losing if we stop valuing ambitious founders who act with integrity?
We lose new ideas
Progress is not inevitable. New solutions do not appear simply because people need them. Entrepreneurs need to see a reward for the risks they are taking. Without that incentive, fewer people will pursue ideas that could become new products, services, or businesses.
We lose options
Businesses make our communities richer and more dynamic. The value they create does not stop with the people who own them. A growing business needs more people and buys more from other businesses. Those people have families to support, and those businesses have employees of their own. Success spreads well beyond the person who originally took the risk.
We lose freedom
Capitalism depends on people being able to decide what to do with their time and money. It also gives people more control over how they earn a living and what they choose to pursue. You do not need permission to have an idea or to find out whether other people will pay for it.
We should encourage more people to imagine what could exist and then go create it.
Nearly all of us reading this have never experienced a society that does not have space for entrepreneurship. We have always known that people can start businesses, succeed, fail, and try again.
When someone succeeds spectacularly, the rewards can be spectacular as well. Some entrepreneurs become extremely wealthy. Some become billionaires, and more will over time. I think we should celebrate entrepreneurial success rather than begrudge it. But success is only one possible outcome.
The fact that entrepreneurs have the space to succeed or fail is what we should focus on. That is why I suggest we should honor the act of trying. And the fact that we collectively approve when founders who fail try again is our greatest strength. It is a clear way to highlight that strong belief connects us.
Go boldly.
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