Jeff Bartel
Chairman and Managing Director
The entrepreneurial spirit has been the backbone of business in the United States since its founding. However, that does not always ensure success, requiring patience, resilience, and an understanding of how to adapt to challenges. By learning to overcome setbacks and turn failure into growth, companies can pivot quickly and achieve better outcomes.
Embracing Entrepreneurial Setbacks as a Catalyst for Growth
A large part of the “great adventure” in starting a business is understanding that there will be challenges. How those are dealt with can show limitations in strategy and allow for improvements in products and services. In effect, failures increase forward progress and make it possible for adaptation that ultimately leads to stronger and better outcomes.
A concentration on growth at all costs helps see past the challenges. Entrepreneurs should accept that the challenges they face and the consequences that come with those provide an opportunity to improve skills, refine strategies, and increase innovation.
The Role of Resilience in Entrepreneurial Success
Entrepreneurship takes a high level of dedication and an understanding that there will be as many startup failures as successes along the way. By staying resilient and focused, entrepreneurs can work past any pitfalls and develop solutions despite any difficulties that might make them want to give up on the chosen direction too soon.
Business resilience comes from fostering a strategic mindset in both personal and company dealings. Personally, entrepreneurs should always be growing and learning, improving their physical and mental health, and building a network of support with friends and colleagues. In business, it is important to remain optimistic and always look for solutions. Innovation and clear communication, along with the ability to quickly move to new ideas and recovery strategies without regret for what is abandoned, will help promote success.
Strategic Pivots: Knowing When and How to Change Course
Knowing the right time to change direction comes when there is a thorough understanding of various factors. These include the needs of the customer, movement and changes in the market, and the overall health of the organization. Pivoting comes into play when entrepreneurs can clearly see that their strategies have stopped working, growth has declined, customers have lost or shifted interest, and an increase in negative feedback.
Moving purposefully and quickly is the key to successfully pivoting. An example of this is Instagram – this software was originally called Burbn and was designed for location sharing. When developers discovered that users were primarily using it for photo sharing instead, leadership acted quickly to rebrand into what has become a very successful social media presence. Another example is the application Slack, created by a game-maker called Tiny Speck. The company found that the messaging feature of the game was more interesting to consumers than the actual game and quickly pivoted the product into a business tool for internal messaging.
Learning from Failure: Case Studies and Key Takeaways
True entrepreneurship comes from recognizing failure and converting that into success after initial setbacks. Examples of failed companies and others that have made it work include:
- Webvan was an online delivery service for groceries from 2000 to 2001. They ultimately failed by trying to expand too quickly and not making sure there was enough demand for the service to meet the level of operations they had in place. Instacart saw the mistakes of Webvan and built a company that avoided these mistakes to become successful.
- Pets.com was a victim of bad management of finances and an unclear vision for success. They spent considerably on advertising but could not make up for the lack of infrastructure and cost overruns. Chewy, focusing mainly online, was able to see the failures of its competitors and avoid making the same mistakes by focusing on robust customer acquisition and clear ROI strategies.
Leadership in Crisis: Steering the Ship Through Stormy Waters
When problems arise, executive leadership needs to be able to show a clear and stable direction to their teams. This includes the need for effective and transparent communication that can reach investors, customers, and employees and provide detailed information about the problem and what actions are being taken.
Leadership must stay clearly focused on the health of the business, ensuring that employee morale and dedication stay high, and making decisions decisively and strategically to ensure that business operations move forward smoothly and quickly. Developing a solid foundation of employee collaboration and a culture that understands how to solve problems and take ownership when necessary.
Changing Setbacks into Success
Surprise setbacks are a large part of the entrepreneurial process, but they also provide learning opportunities that can lead to strategic advancement and increased innovation. With a culture of invention, focused and decisive leadership, and the ability to pivot in the face of challenges, successful entrepreneurs are better able to examine each situation carefully, be adaptive, provide clear communication, and overcome failure by turning it into a path to success. Visit our strategic advisory page for more information on overcoming challenges and finding entrepreneurial success.
