Napoleon Bonaparte famously said that “He who fears being conquered is sure of defeat.” And many as business owners we are often terrified of failure. Imagine what you could achieve if you weren’t afraid to fail? If you took those big chances – and reaped big rewards.
While we may not admit it outright or be even conscious of it, many of us allow fear to stall our attempts at success. As a result we spend a life time ‘playing it safe’, yet quietly desperate as we sit on the sidelines and watch others succeed.
Sometimes the fear of failure is so potent that people stall on their dreams and fail to pursue them. They forever wait for the ‘right opportunity’, not realising that sometimes in life, the only opportunity we get are those we create for ourselves.
The bad news is that everyone fails at something at some point in their lives. The good news is also that everyone fails at something at some point in their lives. It’s not the failure in itself that is important, it’s how the failure is perceived and the lessons one learns from the experience that have far greater importance.
Look, I know it’s tough. You’ve failed big time, things didn’t go as planned, you’re under tremendous emotional and maybe even financial pressure as a result of your plans not working out; and at that point you just want to curl up and wish everything away. The last thing you want is for someone suggesting you examine your mistakes and learn from them.
I’m not one to pretend and I’ll be honest that even I have experienced some catastrophic failures that I felt my entire life had come to a grinding halt and felt completely deflated (tough place to be if you make your living as a professional motivator).
I went through all the emotional motions. I felt the disappointment from my crushing defeat. I felt the fear. I felt the emotional and financial pressures. I knew people would talk and dreaded what they would say. My self-belief was put to the test and at some point I even doubted if I was ever going to recover.
Walk the talk
I allowed myself to feel the emotions however. I realised that dwelling indefinitely on the event would not change things one bit. If anything, focusing too long on the event itself would only incapacitate me, discourage me further and make it impossible to make rational decisions.
The event occurred. I could not go back in time and change that. Period. What I had to do was to start ‘walking the talk’ and do what had to be done. The faster I got over my emotional upheaval and learnt my lessons, the quicker I could begin to take corrective action and the quicker I could get back to pursuing my dreams.
Feeling the emotions is important, it makes you humble and it makes you smarter the next time round; however, dwelling too long on them and using as a reason to give up and doubt yourself for the remainder of your life is inexcusable.
Also, what helped a great deal was putting the whole event in perspective – so I failed now, but I still have 20 or 30 odd years ahead of me to rectify things and achieve even greater success. Or, I could just lie here, give up and waste away the next 20 or 30 years of my life making excuses for a mediocre life. I could stop taking risks, going after my dreams, believe that the world is unfair, become bitter, pack it all in and just settle for the mediocre.
I realised that if I did that, I would end up being one bitter old man and I would have no one else to blame for a unexceptional life but myself. From where I stood, a six month or 12 month setback was really nothing in the context of the remainder of my life. Regardless of the consequences of our failures, life will carry on.
Believe me, life will not come to a sudden grinding halt just because you messed up. It might destabilise things initially or even for some time, but eventually people will carry on with their lives and you will have to as well. So what’s the point of wallowing in regret?
Using failure to your advantage
It sounds clichéd, but in all honesty, no experience is ever truly a failure if one begins to make a habit of viewing ‘failure’ as learning opportunities and life’s way of making us better. The true failure is when we fail to learn from our mistakes and instead cling on to the emotional pain – thus dooming ourselves to repeating the same mistake again.
The more you learn from your failures, the less likely you are to repeat them the next time round, and the better you will be. Strong people turn their failures into lessons. Weak people turn their failures into excuses.
Afraid of failing? Here are a couple of things to remember:
First, it’s a fact that just about everyone who ever accomplished anything great experienced some form of failure or another before accomplishing their dreams. More often than not, it is only their achievements that get noticed with little or no attention given to the numerous challenges, failures and disappointments they endured on their road to success.
Everyone fails. It’s what you do with it that makes the difference. Successful people also know all too well that success and failure are like the two sides of the proverbial coin. The more times you failed in the past, the better your chances of success in the future – provided you learnt from the past failures, refined your approach and did things differently the next time round.
Second, I sincerely believe that failures need not be an end in themselves unless we choose to make them so. Yes, it’s a choice. You can choose to learn from it or choose to be licked by it. By choosing to develop a mind-set of learning from our failures, not only do we establish what works and what does not; we are also better positioned to do things better the next time round.
Finally, there are countless examples of people like you and me who lost everything; and I mean everything. However through hard work, determination and self-belief they made a choice to elevate themselves from their dire circumstances only to achieve levels of success that far exceeded their pre-failure experience. If they could have nothing makes you or I less capable of doing the same thin and turning our failures aroundg. The difference is whether or not we believe we can.
Failures never leave you unchanged, they either can make you better or worse. You either become stronger as a result or you are left weakened. How you end up after a failure always depends on how you view it and how you choose to use the experience – as an opportunity to learn or as a life-long excuse.
Start-Up Law: I’m A Start-up Founder. Can I Pay Employees With Shares?
Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.
Every early stage start-up company battles with restricted cash flow and not being able to pay market related salaries to their employees. Bulking up employee salaries with equity is a common method to attract, retain and incentivise top talent.
Can I pay salaries with shares?
South African labour laws require that employees be paid certain minimum wages, and “remuneration”, as defined within the Basic Conditions of Employment Amendment Act, either means in ‘money or in kind’. ’In kind’ does not include shares or participation in share incentive schemes, as determined by the Minister of Labour. As such, there is no room for start-ups to completely substitute paying salaries with shares or share options. However, there is no restriction in topping up below market related salaries with equity via an employee share ownership plan (‘ESOP‘).
Employee Share Ownership Plans
There are a variety of ways in which employees can be incentivised, and it will always be important for the start-up founders to consider what goal they wish to achieve by incentivising their employees.
ESOPs can be structured in several ways, for example: employees may be offered direct shareholding in the company, options for the acquisition of shares in the future; or alternatively, a phantom / notional share scheme can be set up.
ESOPs permit employees to share in the company’s success without requiring a start-up business to spend precious cash. In fact, ESOPs can contribute capital to a company where employees need to pay an exercise price for their share options or shares.
The primary disadvantage of ESOPs is the possible dilution of the Founder’s equity. For employees, the main disadvantage of an ESOP compared to cash bonuses or bigger salaries, is the lack of liquidity. If the company does not grow bigger and its shares does not become more valuable, the shares may ultimately prove to be worthless.
Some key features to consider when setting up an ESOP are:
- ELIGIBILITY – who will be allowed to participate? Full time employees? Part-time employees? Advisors?
- POOL SIZE – what percentage of shares will be allocated to incentivise employees?
- RESTRICTIONS – will employees be able to sell their shares immediately?
- VESTING – will there be a minimum period that service employees will have to serve with the start-up to receive the economic benefit of his or her shares?
Employee share ownership plans are great corporate structuring mechanisms for attracting and retaining employees, as well as fostering an understanding of the company ethos and encouraging loyalty and productivity. It is essential when implementing an ESOP that all the tax implications are considered and that the correct structure and legal documentation are in place.
Beauty Of Failure: The Art Of Embracing Rejection
In this piece I will try demystify failure, and look into why it should be embraced and not feared.
“Chaotic”, “uncertain”, and “rollercoaster” are three words that would effectively describe almost any entrepreneurial journey. If death and taxes are certainties in life, then failure and taxes are the only two guarantees in business.
If failure is (to some degree at least) inevitable, why should we fear it? In this piece I will try demystify failure, and look into why it should be embraced and not feared.
1. It’s Part of the Job
We can start by separating failure into two different categories – micro and macro-failure. If a macro-failure can be considered as the overall failure and shutdown of the business, micro-failures can be seen as the day to day events that go wrong – that potential client that hangs up on your cold call; the sales pitch that gets the soft-no response of “we’ll call you”; the product launch that no one pitched up to. As Mark Manson puts it, business (as in life) is just a process of becoming less wrong over time.
Everything is a hypothesis that needs to be tested, and the process of business is applying the learnings from each hypothesis – each micro-failure – to be less wrong next time to move the business forward.
As Seth Godin says, “The cost of being wrong is less than the cost of doing nothing”. Embrace being wrong. Rejection and failure are part of the job.
Related: The Art Of Embracing Rejection
2. Opportunity to Refine
There is one undoubted truth about every failure – and that is, each failure gives an experience to dissect and learn from. The Roman Emperor Marcus Aurelius had a similar view; that to one person a situation is good, and to another, that same situation is bad – Only perception decides.
As an entrepreneur, it is important to adopt this stoic thinking of managing your perceptions. Look at situations rationally, and perceive rejections as opportunities to refine the product that the market really needs – not the product you are forcing on your market.
3. With each Failure, Fear it Less
One of the great things about rejection or failure, is that the more often you are exposed to it, the less you fear it. In fact, micro-failures can become such a common part of an entrepreneur’s day, that you stop even noticing them as failures at all.
You may look back on a day with multiple rejections from prospective clients as a normal day on the path to building a business. The goal is to get to that point as quickly as possible.
4. One Less Avenue
In the beginning, any failure will elicit a strong emotional response, however, when it becomes embraced as part of the journey, as crazy as this sounds, you may even get excited for the next rejection or micro-failure.
Why? Because each micro-failure takes away one possible path you could go down in your business. Entrepreneurs tend to be highly ambitious, highly idealistic people. This may result in wanting to do too many things, take the business in too many directions simultaneously, and run before walking.
The beauty of failure is it re-clarifies the path, stops the entrepreneurial mind from getting carried away, and brings everything back into perspective. What’s better than pursuing 1000 potential clients? Pursuing 999 higher potential clients.
Eliminate avenues that aren’t right for your business as quickly as possible so that you can spend time on providing best possible product or service for the ones that are right.
5. Practical Tip to Embrace Rejection
So with all this theoretical talk out of the way, how do we get over that fear of failure to see the beauty of it? Start by watching Jia Jang’s TED talk of 100 Days of Rejection: https://www.ted.com/talks/jia_jiang_what_i_learned_from_100_days_of_rejection. The talk genuinely impacted my life. I have since implemented an annual (and much less impressive) 10 days of proactive rejection in my life. The goal is for 10 days, to do anything in any aspect of life that you would do if you weren’t ruled by fear. Ask yourself today, “what would I do if I wasn’t scared?”
The goal is to actively seek rejection to remove the power of fear from damaging your business’s potential.
Finally, I believe we should get our heads around the idea of celebrating our failures. Go for a drink as a team and give a toast to that failure even more than if it was a success. After all, if life is more about the journey than the destination, surely we should celebrate and cherish every event of the journey along the way?
Every event that happens will be critically important in forming the empire of a business that you are building. Take a step back, see the big picture, and smile whenever it doesn’t go as planned. See the beauty of failure.
6 Resources For Start-ups Looking For Funding
Here are 6 online resources that can help you pay the bills and grow your business at the same time.
Anyone who has ever considered starting their own business, or is currently in the process of doing so, knows that every little bit helps when it comes to making ends meet. Part of the charm of start-up culture is the low-budget creative atmosphere that seems to continually fuel innovation. But, eventually you’re going to have to keep the lights on and water running, and you can’t do that with creativity alone.
Whether you are a business that is just starting out, or already well on your way, there are plenty of online platforms that offer start-ups advice and funding opportunities. Here are 6 online resources that can help you pay the bills and grow your business at the same time.
At one point it seemed that anyone with a clever idea could make a video showing why the world should invest in the next big thing. While a lot of crazy projects have gotten funded over the years, utilising a crowdfunding platforms like Kickstarter continues to be a viable way to get your project off the ground. Of course, if you want to reach your funding goals, it’s best that you have already done your market research, have a solid plan, and treat crowdfunding like a global VC.
Visit Kickstarter here.
Those who are new to the start-up world might not know exactly where to start when it comes to looking for funding. While the freelance economy has grown immensely in the last 5 years, it’s important to know where to look.
Platforms like Toptal offer a wide range of freelance professionals that specialise start-up funding. Start-ups seeking a consultant on Toptal can also rest easy knowing that they carefully screen each candidate, ensuring they have the necessary professional background and experience to guarantee a successful project.
Visit Toptal here.
If you couldn’t already tell by the name, appbacker is definitely worth checking out if you are a start-up working in app technology for both Android and Iphone. The platform helps people discover different apps through the crowdsourcing model. Investors can scroll through apps from around the world, and if they like what they see, they can choose to invest. Funding incentive is based on an investor’s ability to purchase an app at the wholesale price, eventually making a profit once the app starts flying off the shelves in the official app store.
Visit Appbackr here.
Investors are more likely to invest locally, which is why Gust is an attractive option for start-ups around the world, as they represent over eighty countries worldwide. Founded by a team of investors and lawyers, Gust knows their way around the start-up world.
With portals for both start-ups and investors, the platform seamlessly connects those seeking funds and those looking to invest. Start-ups can create a profile on Gust, and also have access to tools and tips to help them regulate finances and legal matters.
Visit Gust here.
Not just for investment, although that is a major part of the platform, AngelList is also a great place to find start-up jobs as well as recruitment. Those start-ups that are looking to expand can greatly benefit from this feature, while also getting their name out there to potential investors.
Their syndicate platform, led by technology experts make room for those who are looking to invest the chance to apply to a lead or directly invest in a fund.
Visit AngelList here.
From top corporations to big name accelerators, Seedrs aims to simplify the funding process for investors. Providing a vast network of investors from 48 different countries, who tap into an additionally impressive network of start-ups, there is plenty of room for collaboration on this platform. Seeders also encourages investors and start-ups to continue their relationship after the transaction is made. Their online and offline networks aim keep both start-ups and investors in the loop.
Depending at what stage of development your company has currently reached, exploring various funding options available to you is a worthwhile endeavour. Rather than blindly pitching investors, investigating each potential platform, whether it’s crowdfunding or a hiring a freelance funding expert, will save you time and resources so you can focus on the right type of investment based on your needs.
Visit Seedrs here.
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