Why You Need To Fail
Statistics show that the reason 9 out of 10 small businesses fail in the first five years is that most employees – even college graduates with advanced degrees such as MBAs – do not possess the essential skills to be entrepreneurs.
Making matters worse, of the 1 in every 10 that does survive the first five years, 1 out of 10 fail in the second five years.
I know. I have been one of those statistics. I have had far more failures than successes.
I am quite certain that the reason most employees do not become entrepreneurs is that the thought of failing—and of being without a steady paycheck—terrifies them.
For those that cannot control that fear, it is best they keep their day job, their benefits, and paid holidays… punching out at 5:00, having dinner, watching TV, enjoying their three-week vacation each year, and appreciating the security of being an employee.
For those of you who have read my books, you already know that my rant is that our schools teach young people to become employees, not entrepreneurs.
That is why we are all trained to memorize and regurgitate, much like Pavlov’s dogs were trained to salivate every time the dinner bell was rung, the admonition, “Go to school and get a job.”
Two Dads, Two Mindsets
My two dads exemplified the two different mindsets—the fixed mindset and the growth mindset.
Though my poor dad was a well-educated man who continued to pursue academic learning his whole life, he didn’t stretch himself beyond what he saw as his natural talents.
My poor dad stuck with the tried-and-true, following the career path that was accepted, even as he struggled to pay the bills or retire comfortably. If he failed at something, he dropped it and went back to what he knew. He was a classic example of someone with a fixed mindset.
My poor dad saw both success and failure as a reflection of who he was. There is power in what you believe about yourself. If you feel like you’re stuck, like you’re not succeeding, then it’s time to examine just what your mindset is.
I was lucky enough to have another example of how to approach life. My rich dad definitely was not afraid of failure. Not only was he not afraid of it, but he also embraced it. Failure simply honed his approach to business and to life. If something didn’t work, it was a failure, not him.
My rich dad had a growth mindset. Those with a growth mindset see their talent or abilities as simply a starting point. These are people who realize that they can grow and develop themselves through hard work, instruction from others, or a well-thought-out strategy.
Challenges don’t scare them off. They see obstacles and failure as a chance to learn from their mistakes, an opportunity to grow. They’re fearless in that way.
Mistakes Are Not Failures, They’re Lessons
One of the problems with traditional education is that our schools still believe making mistakes is bad. Traditional teachers punish students for making mistakes, which means the person who makes the fewest mistakes is labeled the smartest student.
In the real world of entrepreneurship, the entrepreneur that makes the most mistakes and learns from their mistakes wins.
For example, Thomas Edison failed over 1000 times before inventing the electric light bulb. Henry Ford went bankrupt five times before the Ford Motor Company succeeded. Steve Jobs was fired from his own company before he came back and rescued it from bankruptcy.
Today, Apple is one of the richest companies in the world. Bill Gates was charged by the U.S. government for monopolistic practices and won. And Mark Zuckerberg was sued by the Winkelvoss twins, who claimed they created Facebook.
I mention the trials and tribulations of these giant entrepreneurs because this is what real entrepreneurs go through. As Paul Tudo Jones says, “One learns from mistakes, not lessons.”
Best Lesson From My First Business
When my first business failed, rather than go back to school and get a job, rich dad recommended I go back to the wreckage of my business, write down every mistake I made, learn from my mistakes, and rebuild the business.
Watching me groan and moan as I faced the financial train wreck, rich dad said, “If you are willing to face the truth and learn from your mistakes, you will learn far more about money than I could ever teach you.”
It was by facing my creditors, investors, and fears—learning rather than defending, and taking the feedback—that I became a better entrepreneur. Today, I continue to fail, take feedback as it comes in, learn from the failure, and grow richer because I am constantly learning from my mistakes.
The best lesson was to learn to have faith in myself.
How I Learned To Overcome Fear And Failure
I don’t know if I ever fully learned how to overcome fear. I still have fear and I certainly still fail from time to time. I guess I have learned how to manage it. I have learned to change my response from fight or flight to inquisitiveness and curiosity.
I continually seek counseling, coaching, and mentorship in the areas that scare me the most or consistently. Whenever there is something that I am afraid of, I’ve found that I have this built-in response that forces me to want to do it anyway—simply conquer the fear.
I have helped thousands of people make billions of dollars over the years. I have done well for myself, too, but actually raising capital from investors for my own deal was something I had never done until recently.
I was afraid that if I failed in my endeavor, I would take others down with me. Because of past business experiences, it was a legitimate fear. Yet I was determined to overcome that fear. The whole exercise was as much about overcoming my fear and learning something I had always wanted to learn as it was about doing the deal itself.
I also learned that when failure or mistakes do happen, assemble your team of advisors to help you work through it rather than suffering alone and trying to figure your way out of it by yourself.
Editor, Rich Dad Poor Dad Daily