The phrase “fail forward,” repeated to the point of cliché, is part of the modern gospel of the innovation economy. We’ve all heard the anecdotes of famous failures: Steve Jobs at Apple; Mark Zuckerberg’s Facemash; Sir Richard Branson’s disastrous line extensions such as Virgin Cola and Virgin Clothes. Indeed, you can hear spectacular stories of face-planting in Palo Alto, New York, Cambridge, and Austin and any TEDx. Of course, invariably the story ends with a plucky innovator dusting herself or himself off and trying again, eventually to succeed.
But we need to ask ourselves whether failure is a privilege afforded only to some entrepreneurs.
Not everyone is so confident they’ll be able to “fail forward.” Entrepreneurs who might be from more modest backgrounds (or operate outside the major innovation hubs) realize often that if they come up short, they’ll just…fail.
The implications of this divide are enormous, for the entrepreneurs, the employees, and the communities in question. Failures can ruin lives of founders and employees, let down communities, blow up credit scores, destroy families, lose investors’ money, and more. When failure isn’t a viable “learning” option, would-be entrepreneurs often choose to play it safe (and wouldn’t you?). If you know you won’t have a second chance once you fail (and there is a real cost to trying), you might be far more reluctant to get in the game in the first place.
Take, for example, the talented pool of students who graduate from America’s historically black colleges and universities (“HBCUs”).
This is not to argue that every community needs to emulate the entrepreneurial ecosystem that exists in the tech sphere (which has many rather toxic elements, along with the good). That’s not economically viable, nor do many Americans concerned about “disruption” desire it. But we certainly can do more to provide faith to those who live outside of the recognized innovation cities that a single failure isn’t the end of the line. We can provide risk modifications that will increase the propensity to take smart, calculated risks and build the small businesses and startups that are necessary across the country today!
- First, access to early-stage funding should be much more available and transparent. We need more awareness and better access to community venture funds, foundation grants, small business loans, and CDFIs, among others.
- Second, entrepreneurs need portable benefits–health care, retirement savings, and other basics. This might be from one of the many portable benefit startups that exist now, or the programs that big insurers are launching, or might eventually be government funded at the state or federal level.
- Third, we need more accessible programs that offer non-cash capital–training around launching, regulatory burdens, payroll and HR, branding and marketing, recruiting, and all the other crucial determinants of success and failure.
- Finally, we should emphasize experience as a major asset to starting a business. Yes, Bill Gates and Mark Zuckerberg were college dropouts. But most successful entrepreneurs hit 30 before unleashing their big idea. Maturity matters.
It’s time that we realize that second chances are a privilege. To those who can’t afford to fail, being told that failure is a good thing, even a necessary thing, is an insult. No wonder many aspiring entrepreneurs who come from humble and unprivileged backgrounds say in response: “You must not be talking about me…”
Not everyone is an entrepreneur, but the myth of Failing Forward dissuades many who could be great. We can change that by building a culture–and accompanying systems–that recognizes that failure is a privilege that everyone should enjoy. Otherwise, the vital opportunity of entrepreneurship is a false promise.
Oliver Libby is the cofounder and managing partner of venture firm Hatzimemos / Libby and cofounder and chair of the board of social enterprise accelerator The Resolution Project.