No one--almost no one--wants to fail. Especially entrepreneurs. Our level of investment, in all forms, is extreme.
But some of us will fail. It's going to happen. And I have strong feelings about two parts of entrepreneurship and business failure. First, failure isn't the end but part of the process. Second, if you're going to fail, fail fast.
Failing fast is important because, you've heard the clichs: don't throw good money after bad, cut your losses, get out while you can, and so on. It's important because if failure is going to come, it's best to get to it right away so you can learn and move to your next project.
But how do you fail fast?
Here are five ways to build fail fast systems into your business planning:
Identify Milestones--Don't just write a business plan, write mile markers for your business growth, with timelines. As a business leader you should know not only where you're going but when you expect to be there. Consult it often. If you're not on schedule, it's time for a serious evaluation about why and whether you're on the right path.
Get an Advisor and Share--Find an advisor or mentor outside your immediate circle and tell them your milestones. As the driving force in your company, it's easy to explain business setbacks to ourselves and rationalize our stumbles. You need someone who can assess your progress objectively.
MVP--Citing another clich here, don't let the perfect be the enemy of the good. Don't fall into the trap of needing to perfect your product. If you have a minimally viable product (MVP), go with it. Perfect may never happen so don't wait on it. Get to market right away, get feedback and make an assessment.
"Don't spend $500,000 to develop a 'perfect' product," says Nick Zhou, CEO of Everlasting Footprint, a social and collaborative digital tribute website. "Instead spend $50,000 to build an MVP, a prototype. Use this prototype to get feedback and validation. If you are not a little embarrassed by the first version of your product, then it is most likely not an MVP."
You can even use your MVP to get customer information. "It's possible to test an idea without building it. Imagine you post a buy button and nobody clicks it, thank God you didn't build the product!If people do click it, tell them it's not available yet, would they like to be notified when it is?That's incredibly valuable data that tests demand with basically no spend," Dominik Mazur, CEO of CamFind told me.
Hunt the Negative--Your friends, family and support network will lie to you. They will tell you how great everything is and how well things are going--feedback which can prolong your demise. Don't listen. Go seek out the negative opinion. Find people who will be critical of what you're doing and listen to what they have to say.
Jason Shepherd, CEO of Own Only says, ""There is nothing more valuable than honest feedback when you are starting out. No matter how hard you work to improve, you learn what is most important to your customers directly from them. You get the best insights when things don't go as well as you had hoped."
Act--Knowing when (or if) to pull the plug can be amazingly difficult. But listen to your data--including the negative feedback. If you've made timelines, invested in an advisor, gone to market and sought criticism, and things just aren't shaping up...then maybe they're not shaping up. It may be time to fail.
Barak Schurr, Founder & President of Wantickets says, "Acting is the most important part of the plan. Failing is part of learning and though losing is not fun it can definitely help in avoiding the same pitfalls in future endeavors."
There's absolutely nothing wrong with that. As long as you can learn from the failure and include those lessons in your next venture, failure can be the best thing that happens to you.
I've never met a successful entrepreneur who didn't fail at something.
The key, remember, is--if failure is going to happen--that it happen fast. Prolonging the inevitable is the surest way to turn setback into catastrophe.