Tarek Ghobar, founder of PointCheckout shares his experience of failing
The startup world is like dancing around a huge minefield with no protective gear on, it is only a matter of time until one gets you. The odd thing though is that every founder entering this minefield does so willingly, and few can say they do not know what to expect going in.
The chances of a startup succeeding is extremely small, under 10 per cent small, with the chance of it being wildly successful unicorn being much, much smaller. The signs are all over the place too, startup failure statistics are clear year over year, and investors with over 15 per cent success rate in their deployed capital are “leaders”, meaning they are telling startups in advance while writing the cheque that they probably will not make it. Perhaps most impactful, founders hear it from enough family, friends, advisors, “are you sure? Isn't a stable job better? Maybe the market conditions are not the best right now”, with the Middle Eastern culture of stigmatising failure being a direct culprit in why it’s a shameful thing for local entrepreneurs.
So let's talk about startup failure. If children were not encouraged to fall and fail, they would not learn to grow. If scientists stopped being funded for failed experiments they could not invent. So, it should be no different when entrepreneurs try to create a new company and do not succeed. In fact, it should be celebrated just as much as success, because it is just as critical to the development of the entire ecosystem.
When my first startup failed, I felt alone even though there was a team around me. It was mentally tough to go through, and the thoughts of what I could have done to prevent it never stop for months afterwards. Physically the process was also draining, with no motivation to do any work and little energy to be out and about. Add to that the pressure of having to let people go, settle with suppliers (if you even can), close the office and have that dreadful chat with investors. There should be no need on top of all this for founders to have to hide from society and make excuses because failure is a taboo in the eyes of the ecosystem.
As a company fails or shuts down, founders usually go through the same phases of grief as any other trauma or loss (yes, its trauma). It starts with depression and denial, even anger, and eventually into acceptance. It is especially critical in that first phase that the support is sought from either other founders, advisors or even investors. Family and friends are important too, however people with experience in building companies are more understanding because of their own knowledge of venture building or running a business. When I was going through my own withdrawal, I did not want to hear “you did great and we are proud of you”, I needed to understand which strategic moves were too late, which signs I missed, and what opportunities I missed to change or pivot. It might have been confronting at the time, yet it is the best way to channel emotions away from the anger at oneself and into the lack of experience at the time or in that situation instead. The longer you stay angry and depressed, the harder it will be on yourself and your surroundings. Bringing this home to your spouse or children for example will surely be felt, and it might start to affect your relationships in your wider circles as well.
Founders rarely have a clear separation between life at work and life outside the office, it is one, intertwined long journey because we are working at night, at the dinner table and on holidays. Even the times we are not physically typing an email or writing a proposal, it certainly is being planned in the back of the mind. This makes the separation after failure that much harder to endure, because it is never just about closing the office and letting a few people go, it becomes about changing your entire lifestyle at once. Much like a divorce, everything around you will remind you of the time you were fighting hard for a proposition you believed in, and now it is no longer there and you need to find a new reality. This is where family and close friends do become important, because they were there before you started, and it is the constant you can always fall back on to rebuild. Luckily, I did have that at home, which made me appreciate the people around me much more as well.
As time went by and I started to recreate the timeline of the last few months before having to shut down my startup, the emotions started to subside and were replaced with rational thoughts instead. This is part of acceptance, and even if it was acceptance of the missed opportunities and wrongdoings, it had become less hurtful to think and talk about. I started to seek opportunities to talk about what had happened, and even reached out to my (ex)employees, suppliers and investors to make sure they understood and were not also blaming me, many of whom I am friends with still to this day, more than 10 years later.
Moving on, my failure experience has shaped my entrepreneurial career and has become a backbone to a lot of my decision making. Going through any project, competition or experience knowing there is a safety net gives you more focus on the goal and makes the founder a bit more confident in taking calculated risks. Assuming no irresponsible behaviour has taken place in running the company, going through a startup experience knowing it is OK to fail is that safety net for entrepreneurs that more investment money can never buy. That safety starts simply with a startup ecosystem that is accommodating, understanding, and normalises startup failures.
It is time to normalise failure in the Middle East too. It is time to support entrepreneurs who have gone through failure. We need to give them the space to talk about their experience and spread their thoughts on what did not work so that others can ask, listen and learn. With this, I am launching www.fashalna.com, a new platform focusing on startup failure stories, learnings from former founders, and other content to help entrepreneurs go into the wild with some safety net and a space to talk. Signup today, and you will be the first to know when we launch.