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5 Ways To Avoid Failure, From Social Enterprises That Didn’t

From bad hiring decisions to poor product design, lots of things can derail a new company. At FAILFaires, those companies share their bad decisions so others can learn from their mistakes. Here are some common ones.

5 Ways To Avoid Failure, From Social Enterprises That Didn’t
[Image: Color via Shutterstock]

We’ve all been to an endless procession of conferences where shiny, successful people share their triumphs and “best practices” to rounds of applause. There’s plenty of such puffery in the private sector, but if anything, the pressure to please donors and stakeholders by making it seem like everything’s going great is even higher in the social entrepreneurship space–even when it’s not.

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FAILFaire is designed as a corrective to all that feel-good blather. Started several years ago in New York City by MobileActive, the initial intent was to share projects in the field of “ICT4D” (information technology for the developing world) that just didn’t work, along with the reasons why.

Earlier this month, Amani Institute, a startup education program, and the iHub held the first-ever FAILFaire in Nairobi, Kenya. The brave presenters included organizations we’ve lauded, like Ashoka, Generation Rwanda, and Takamoto Biogas.

Here are their top five lessons shared. They can apply not only to social enterprise, but to all enterprises:

1: People, People, People:

You are only as strong as your people. Don’t rely on free interns. Invest resources in recruitment, including two to three hour-long interviews, in person, on site. “A series of hires early in our organization’s work nearly derailed our project,” Oliver Rothschild of Kepler told Fast Company. “We learned that HR and talent need to be core competencies for a startup, rather than afterthoughts.”

2: Understand Your Market:

“Products for the poor must not only satisfy a ‘material’ need, but also an emotional or psychological one. For instance, no matter how good the design, if it symbolizes their material deprivation as opposed to their future aspiration, they won’t use it.”

3: Sales Continues After the Sale:

Customer support is more important than the initial pitch, if you want to drive sustained uptake of a product or service.

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4: People, Again:

This one is about your partner. “Have at least one fight before working together.” Make sure you are equally invested in the organization and idea.

5: It’s Culture, Stupid:

Penda Health founders Nicholas Sowden and Stephanie Koczela are hyper-aware of the cultural challenges they continue to face as non-Kenyans starting an organization in Kenya.

Not every failure has a neat and easy happy ending. But the act of being honest about what doesn’t work is valuable in itself.

“As a founder of a startup, you spend all day with armor on,” Rothschild says. “You’re creating something that doesn’t exist yet. And to get people to follow you and support you–customers, partners, early team members, and of course funders–you need to be constantly telling the best version of your company’s story. Walking into a safe space filled with other entrepreneurs who are struggling with the same challenges you are, with the express purpose of admitting and dissecting your mistakes is a powerful learning process.”

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About the author

Anya Kamenetz is the author of Generation Debt (Riverhead, 2006) and DIY U: Edupunks, Edupreneurs, and the Coming Transformation of Higher Education, (Chelsea Green, 2010). Her 2011 ebook The Edupunks’ Guide was funded by the Gates Foundation

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