Not all failures are equal!

Conventional wisdom, from the great success-after-failure stories, that we hear from the silicon valley, tells us that the success will follow you after the initial failure at your start-up.

A study, by Professor Paul A. Gompers and his team found out that: first time entrepreneurs, who received venture capital, have a 22 percent chance of success and failed entrepreneurs have 23 percent chance of success, as if they haven’t learned anything! So, what is going on here?

It is not that the entrepreneurs are not learning anything, they are learning.  I believe, there are two things that can explain this;

1) Not all failures are equal, that is the set of problems that you faced and what you learned doesn’t represent the whole set of problem space, one might face again and

2) the ability of each entrepreneur to take that experience and adapt to the new situations and problems that you will come across in your second venture.

As Professor Gompers, calls it, there is an ‘attribution bias’ – people generalizing anecdotal success-after-failure stories, referring to folklore and myth about the success and failures of entrepreneurship.

[Image Credit: Thanks to sunilkargwal via Pixabay]