In the second year of my MBA program, a classmate and I launched a startup: 3D Media. We were selected as a finalist for the university’s annual competition. We were also deep in investor talks and even had a national retailer interested in installing our hardware in its locations.
But the day before the university announced the winner, a competition requirement came into question: the inventors’ licensing agreement. We soon realized there was an avenue for the supplier to break our arrangement. This would make it nearly impossible for us to secure financing, so we pushed for a resolution. In the end, we placed second in the competition. But with no product to offer, we no longer had a company. I was also the only one of my classmates without a backup plan, so I had no job prospects after graduation.
Bouncing back from a failure like that can be a challenge. The first inclination is, naturally, to wallow in the loss. Don’t get me wrong; it’s crucial to process your feelings. But at some point, you need to shift your mindset and see failure as an opportunity to do the following.
1. Clarify your vision
To turn failure into a successful opportunity, you need to do plenty of work—and some degree of chance is involved. Momentum can help, but you must have a vision before moving forward. Without any direction, your chances of falling victim to common missteps are high. You could end up making the same mistake, or you might find yourself chasing after a goal outside your strengths.
Many entrepreneurs will tell you, for example, that it’s all about “at bats,” and more than a few Silicon Valley investors will reinvest in the same people even after missteps. But that still doesn’t take away from the fact that you need to answer those tough questions and hone your vision to execute your ideas successfully.
If you wallow in your failure, you can lose sight of your vision quickly, as well as the lessons it just handed you. Structure your time in a way that encourages you to dive into the warning signs you missed, and position your goals so you take action on those lessons right away.
I learned a lot of lessons from that first flop: Pay attention to the fine print, prepare a backup plan, and don’t put all your eggs in one basket.
2. Seize the lulls as opportunities
If failure has a silver lining, it’s the time off that comes at the end. It might be the best opportunity you’ll have to spend quality time with family, get in shape, or volunteer your time to a cause you care about. Take advantage of the lull to focus on relationships, start that side project you’ve been meaning to tackle, or experience meaningful events in your life.
I took some time after graduation (and my first startup failure) to learn about new industries before I took a job in medical sales. It was a niche market with upward mobility, autonomy, and a good team. This role allowed me to apply my entrepreneurial knowledge to an industry I hadn’t explored before, which is a skill I use to this day.
As you embrace the lulls, remain open to other possibilities. Remember, you need some level of flexibility to move forward. Being too hardheaded could mean the difference between success and staying stuck.
3. Tie your shoelaces before you run
After my first startup didn’t go as planned, my next ideas were either too big or too small to attract investors. Once I clarified my vision, I realized that being an entrepreneur without a sound startup idea opened a new door for me. I began searching for existing businesses, which have the momentum that startups lack. Sure, I didn’t have the money figured out, but I thought that if I could identify a strong opportunity, I was capable of finding the cash to execute.
Ultimately, my first attempt to buy a business was unsuccessful. There was way too much to navigate, and I needed to pay my rent. So I took advantage of another lull to clarify my vision before taking another swing at it. The first time, I had jumped into the race without tying my shoes. But now, I had a handle on what I needed to do to be prepared.
Failure is often necessary for success. Sometimes, you have to understand that things aren’t working out. When you take huge risks, the likelihood of failure is high—so you have to be committed to your goals, or you’ll never make it through the stormy waters. After all, it’s only after you’ve done everything in your control and something outside tips the scale against you that you truly understand what it means to persevere and work toward your vision.