Recent research conducted by a Harvard professor found that venture capital-backed startups fail at a rate of about 75 percent. Previous estimates created by the National Venture Capital Association figured the rate at 25 to 30 percent. Entrepreneurs must understand that the odds are stacked against them when they decide to start a company. Failure can seem like a major setback, and reframing it as something productive can be difficult. Ultimately, however, entrepreneurs need to see failure as a necessary step toward success.
When entrepreneurs take the time to analyze a failure, they can gain important insights into the current market conditions and the receptiveness of their potential customers. This, in turn, enables them to launch an even better product in the future. Entrepreneurs should look at each failure as a learning experience, a chance for them to discover what doesn’t work, which only brings them closer to finding what does. When entrepreneurs see failure not as a shameful shortcoming, but as a necessary and educational step in the path toward success, they can reframe the experience in a meaningful, productive light. This reframing brings them one step closer to success, an exciting prospect considering that the average successful startup sells for nearly $200 million.