Why Failure Will Be Your Best Mentor – Ever

Why Failure Will Be Your Best Mentor – Ever

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We talk about the virtues of failure, but the truth is that failure is painful for entrepreneurs who experience it and funders that lose their capital because of it. Personally, I’ve experienced ‘failure’ of entrepreneurs I’ve funded nine times.

The truth that many VCs are not willing to tell you is how much wealth is eroded by the losses of investing in the dreams and businesses of entrepreneurs.

I recently spoke at a conference for venture capitalists in Sri Lanka and rather than tell the fairytale of how many businesses I have invested in, I chose to speak about the true cost of venture capital: The pain of losing money, the reality of eroding your own personal wealth and the disappointment of realising that entrepreneurs can sometimes be economical with the truth.

They often misrepresent sales, tax liability and even stock-on-hand figures so that the investor lives the illusion that the business is doing better than it actually is. Yet, I am bullish about investing in entrepreneurial businesses.

Related: Your Business Failure is Your Fault

What is it that keeps me going through the pain, the disappointment and the drama of venture capital? What lessons can other entrepreneurs learn from failure?

Master the ability to re-emerge

Conquering failure is less about scientific evidence that things will be fine and more about the sheer will and grit to get up again. It sounds fluffy I know, but the tenacity required to win at this game called life (and its mini-tournament, business) is something that you have to teach yourself.

What I have learnt over the past decade of business is that not giving up is more about believing — even without the evidence to prove it — that you will emerge at the other end a better version of yourself. In other words, the emotional capital required to emerge is an ability and not a feeling.

Focus on development and learning

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Most of us forget that clichéd expression that everything happens for a reason. Like many clichés, it’s used often because it’s true.

What clouds us to the lessons of failing is that we focus too intently on the pain and shame associated with failure and forget that all pain is instructive.

When you start gyming, the pain that greets you in the morning is uncomfortable, unwelcome, undesirable and just plain unbearable. But any gym-bunny will tell you that the quickest way to get rid of the pain is to go back to gym and train again. The more seasoned gym-addicts know that their bodies don’t feel the same without that stiff muscle feeling of pain and growth. Growth and pain are interlinked.

So rather than wallow in self-pity, take a moment to work through the lessons of that failure. Today we have a process in the business that allows us to systematically work through the pain of failure. We do it at the exit stage of transactions.

We ask, discuss and document answers to the following questions:

  • Why did we not achieve our goal?
  • What were the main forces that led to the failure of the investment?
  • How could we have avoided these?
  • What do we need to implement internally in the business to ensure that we avoid the same outcome?

Notice how the questions are inward focused and assume that we had the full powers to determine the end result. As a principle, we believe that we are in charge of our destinies; not fate or ‘them’. We are.

Related: The #1 Reason For Failure of Businesses Over Two Years Old

Knowledge is not an end state but a persistent goal.

We fail.

When we fail we hurt.

When we hurt we learn.

When we learn, we heal.

This is the mantra of our investment team. So we are clear that VC by its nature is high risk. While risk can be managed, we also know that not taking the risk is not managing the risk. Not taking the risk is choosing not to participate and that is not acceptable.

Our people are our most important resource and our business systems must operate and think through problems faster and better.

We can never know all the challenges that lie ahead but we can learn to think through them better and faster. Knowledge is a fluid construct. What we know today and what makes us market-leading today may well be obsolete tomorrow.

Remember: Best practice is the most clinically correct answer… to yesterday’s problems.

Vusi Thembekwayo
Mr. Vusi Thembekwayo has been an Independent Non-Executive Director of at RBA Holdings Ltd. since May 14, 2013. Mr. Thembekwayo has already collected numerous accolades and awards as businessperson, entrepreneur and international public speaker. Mr. Thembekwayo completed a PDBA and a course on advanced valuation techniques with the Gordon Institute of Business Science and completed a Management Acceleration Programme (Cum Laude) with the Wits Business School. His speaking achievements include the international hit talk “The Black Sheep” which he delivered to the Top 40 CEOs in Southern Africa, addressing the Australian Houses of Parliament and speaking at the British House of Commons. To add to this, Vusi speaks in 4 of the 7 continents over 350 000 people each year.