6 Important Business Lessons I Learned from Failure

6 Important Business Lessons I Learned from Failure

April 20, 2023
Success breeds arrogance. Failure is the gift that keeps on giving.

It was midnight the day before the big event. Midnight before all of my net worth, and more, were on the line. I had done everything I could to make it a success. I plowed everything I had into this venture, and planned for every contingency--except one that could wreck everything: The weather.

I had researched the market thoroughly, and determined that my only competitor was weak and ineffective. Yet I had no backup plan if winter storms in the United States closed down airports where many of my potential customers were coming from to hear about my new venture.

And a snowstorm was coming.

I have said before that if your new venture or idea doesn’t scare you half to death, it isn’t worth doing. That night I was scared half to death because I couldn’t do a thing about the winter storms.

After all my careful planning, the whole venture hinged on a snowstorm.

In the end, it all came down to pure luck. The weather cleared just in time, my customers arrived and I took the market by storm. The venture was a complete financial and market success.

Misplaced Confidence

However, instead of learning from that experience that I needed to plan better for my next venture, I took away that I could do no wrong.

I went into my next venture, in Cuba, with complete confidence. I did everything I did in Mexico. I researched the market. The only competitor was weak and ineffective.

And the venture was a complete failure.

So, did I learn more from the Mexico venture or the Cuba one? The answer might seem obvious, but I learned more from the failed Cuba venture. Why?

Success breeds arrogance. I must admit, after the Mexico success, I was pretty arrogant. I thought I was invincible. I was wrong.

I went into the Cuba venture assuming everything would work as it had in Mexico. It did not. Lesson learned. Just because you are successful once is no guarantee you will be successful again.

So, I did a lot of soul-searching. What did I miss in Cuba? I assumed the market in Cuba would react the same way the market did in Mexico.  After all, they are both third-world countries. They both speak Spanish. Both markets have very similar needs. So, what could go wrong?

To start with, although Spanish is the language in Cuba, it is Castilian Spanish, which is more formal. Because of that, I missed important nuances between Spanish in Mexico and Spanish in Cuba. Those nuances caused me to miss the differences in the two markets. Another key difference was Cuba was and is a Communist country, which affects the flow of goods and the nature of relationships and protocols.

Those differences did not become apparent to me until it was too late. Strike one to arrogance.

Second, I assumed both markets would react the same way to my business, but I failed to doublecheck my assumption.

Third, I employed a Mexican to guide me through the Cuban market. Bad move. He was a good guy, and could speak Spanish, but not Castilian. And I assumed he would understand the Cuban market. He did not.

Lessons Learned

So, what are the lessons here?

1. Doublecheck your assumptions and then doublecheck them again. All decisions are made on underlying assumptions. So be sure your assumptions are correct. Most companies make strategic plans based on assumptions. Inaccurate or incorrect assumptions destroy strategic plans. The next time you are in a meeting to decide something, spend all your time questioning assumptions.

 2. Spend a lot of time on contingency planning if your assumptions turn out to be wrong. Most companies spend a lot of time on planning for everything to go right. Here is a news flash for you: Most times plans do not go according to plan.

 3. Don’t be afraid to pivot if the plan goes south. Don’t fall into the sunk costs trap. No matter how much you have invested in a venture, if you discover the assumptions were flawed and the venture is going south, end it quickly.

 4. Don’t ever make mass-market assumptions outside of the United States. Common language does not mean common market behavior. Market behavior in one part of the world is very different from other parts of the world.

 5. Arrogance kills more ventures than lack of planning, lack of resources or nearly anything else. Don’t ever assume you are so smart you can’t fail. I have had many more failures than successes. And I have learned more from my failures than successes.

 6. Finally, don’t ever waste time on why something went right. Of course you should always analyze how you might have done better, but that should not be your focus. You should always do a deep dive on your failures for the lessons they hold.

One time, I asked an executive of mine why a particular venture failed. His answer was, “I can’t think of anything we did wrong.” I asked him, “If you did nothing wrong, how could it have failed?”

When something fails, it is always because you did something wrong—so find it. Don’t fall into the trap of assuming everything that could have been done was done. Either you didn’t do something you should have, or you did something you shouldn’t have. Take your ego out of the equation and relentlessly examine every detail of your plan to uncover what did not work.

Steven L. Blue is president & CEO of Miller Ingenuity. He teaches executives, leaders, entrepreneurs, and anyone seeking to learn how to maximize their company’s growth through fostering company culture and innovation. He serves as CEO-in-Residence at Winona State University. A frequent keynote speaker, Steven has addressed audiences at Harvard Business School, The United Nations, Carnegie Hall, The Safe America Foundation, IndustryWeek, The World Safe Summit, CEO Clubs International and Medtronic Corporation.

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