From Business Failure to Multi-Million Dollar Success: The Comeback Story
Starting a business is a risky endeavor filled with challenges. Despite careful planning, unforeseen circumstances can lead even the most promising ventures to fail. However, business failure does not have to be the end of the entrepreneurial road. Many successful business owners have risen from the ashes of previous ventures to build multi-million dollar companies after initial setbacks.
Learning from Failure
Experiencing failure can provide invaluable lessons for future success. As reddit users on [r/Entrepreneur](https://www.reddit.com/r/Entrepreneur/) share, failure teaches resilience, adaptability and how to avoid past mistakes. One user describes failure as “your university of hard knocks”, while another sees each failure as “another notch on your belt”.
-Quora users who have built successful companies after failure echo these sentiments, emphasizing that they learned key skills in management, marketing, product development and leadership. One founder says of his first failed startup:
It was the best education I could have ever received. I used my failure as a springboard to success.
Pivoting Persistence
Grit and persistence are vital to overcoming business failure. On Avvo, small business lawyers advise entrepreneurs to pick themselves up and continue pursuing their passions. FindLaw suggests changing directions by identifying a new opportunity or improving on the old business model.
Many founders have pivoted their way to success, like Groupon’s Andrew Mason who built a multi-billion dollar company after his first startup failed. Others persisted by iterating on their original idea like Instagram’s Kevin Systrom, who previously launched a check-in app called Burbn that floundered before finding success by focusing solely on photo sharing.
Funding the Comeback
Lack of capital is a top reason for startup failure, but funding the next venture may prove difficult after a flop. Crowdfunding on sites like Kickstarter and Indiegogo provides a way for entrepreneurs to validate and finance new ideas through small contributions from a large number of backers.
-Venture capitalists are also open to funding second-time founders despite past failures, especially if the entrepreneur gained experience from the initial attempt. As one VC advises on Quora:
Fail fast and improve. VCs bet on teams more than ideas.
Case Studies of Business Comebacks
Sarah Blakely – Spanx
- First business: Sarah researched patents and trademarks for inventors and entrepreneurs.
- Failure: Sarah was unceremoniously fired from her research job.
- The comeback: Used her savings to develop a footless pantyhose prototype that eventually became the billion-dollar shapewear company Spanx.
Andrew Mason – Groupon
- First business: Built a platform for political activism that failed to gain traction.
- Failure: Ran out of money just a year in.
- The comeback: Pivoted to launch Groupon, the wildly successful daily deals site that would eventually be valued at over $10 billion.
Kevin Systrom & Mike Krieger – Instagram
- First business: Launched check-in app Burbn which floundered due to too many features.
- Failure: Unable to attract VC funding or users; pivoted 3 times unsuccessfully before giving up.
- The comeback: Redeveloped Burbn to focus solely on photo sharing which became Instagram, acquired by Facebook for $1 billion 2 years after launch.
Key Takeaways
- Learn from failures. Post-mortems, self-reflection and identifying weaknesses can provide the knowledge needed to make your next venture succeed.
- Persist despite setbacks. Grit, resilience and a tenacity for risk-taking are essential entrepreneurial traits.
- Pivot when needed. Maintain flexibility. If an idea isn’t gaining traction, consider changing directions or improving on the business model.
- Leverage funding options. Bootstrapping, crowdfunding campaigns and VC backing can provide the capital necessary for a comeback.
Business failure can feel devastating but it is rarely the whole story. Numerous founders like Spanx’s Sara Blakely have shown it is possible to bounce back from failure stronger and wiser. With grit and resilience, an entrepreneur can rise from the ashes of a shuttered venture to eventually build a multi-million dollar business empire.
-Resources
- Bouncing Back from Small Business Failure (Avvo)
- Overcoming Small Business Failure (FindLaw)
- Learning from Failure (r/Entrepreneur) (Reddit)
- Feelings on First Failed Startup (Quora)