The Myth of Failure

The Myth of Failure is the fourth post in the Case Foundation’s Myth of the Entrepreneur series. This series is intended to intentionally examine, and change, the stories our culture tells about entrepreneurship. For more information on the Case Foundation’s approach to the Myth series and Inclusive Entrepreneurship, please check out our introductory piece. We encourage you to join the conversation using #Ent4All on Twitter.

The Myth of the Entrepreneur series is based on research conducted by Michael Chodos, former fellow with the Case Foundation and currently at the Beeck Center for Social Impact & Innovation at Georgetown University, with contributions from Aaron Coleman, former Case Foundation intern.

Failure is a core part of the story of entrepreneurship. Each year about 6 million new businesses start up, but they don’t last long. By five years, half are gone. By 20 years, almost all are gone.

In most of our discussions around entrepreneurship, the genuine agony, trauma and shame around failure is discussed solely as a learning experience and bump on the road to inevitable success. We promote and analyze the building of a startup, but we leave the failure part untouched until the entrepreneur has been successful with another venture. Then, that failure is lauded as an important part of their journey that made them who they are. But why wasn’t that important moment in the entrepreneurial journey something we cared about when the failure actually happened? What are the immediate learnings that could be shared?

At the Case Foundation, we understand the importance of failure. It is baked into our organization’s culture and a key part of our Be Fearless campaign. Failure is an important tool in the innovator’s toolbox. If we expected everyone to get it right on the first try, we wouldn’t have some of the most important inventions and innovations of our time. Many inventions happen incrementally, and many creative figures don’t have success their first time out. Henry Ford, Walt Disney, Steve Jobs, Oprah Winfrey and Steven Spielberg were all fired or rejected early on. Persistence and the ability to build upon past failure are what make breakthroughs happen. As Robert Sofia, a marketing consultant to the Fortune 500, writes, “The way in which we respond to our failures has the power to shape us. If we sulk, falter, and permanently fail, we risk being shaped in a damaging way. If we take specific steps to overcome our failures, learn from them, and improve as a result, they will make us stronger.”

But what about the downside of failure? Failure deeply affects the lives of the entire team, investors, vendors and customers. When a business goes under there are real, live people who lose their employment, families that lose their seed stage investing and entrepreneurs who can be left with overwhelming debt. The stories of why companies shut their doors can be learning opportunities for other ventures, but only if we have a culture that acknowledges that while failure to some degree is inevitable, it is not glorious and absolute failure is something that many entrepreneurs can’t afford.

When looking at the statistics on diversity in entrepreneurship, we must ask ourselves, “Are we setting up some groups to fail more than others? Or are we judging the failure of some entrepreneurs more harshly than others? And by idolizing failure, are we leaving out an entire class of entrepreneurs?” It’s easy to look at statistics like “failed entrepreneurs are far more likely to be successful in their second go-around, provided they try again” and miss the significance of that last part of the sentence – “provided they try again.” Women CEOs and CEOs of color already receive significantly less venture capital than their peers, yet we expect them to bounce back from failure just the same. But diverse entrepreneurs face additional obstacles. Because of the wealth distribution in this country, many families, particularly those of aspiring entrepreneurs of color, do not have the $20,000-$50,000 in “friends and family” funding to start a first venture, let alone a second. And if women are twice as likely as men to shut down their businesses because of lack of capital, we have to consider that factor when searching for ways to support women entrepreneurs during and after their first ventures.

Social science has begun to shed some light on the disproportionate affects diverse entrepreneurs may experience related to failure. Some researchers have begun to associate the stereotype threat, a phenomenon typically assessed in a classroom or test-taking setting, with success in other areas. Stereotype threat posits that if women entrepreneurs know that they are going to be judged more harshly when they’re pitching, they will have a worse performance. We must begin to assess the external biases that affect how we assess, value and judge all entrepreneurs, particularly those that are struggling or have survived a previous failure. And entrepreneurs must look for ways that they can begin to build up networks, mentors and role models that break down these stereotype threats and show they can survive all stages of growing a business, including possible failure.

Failure is not an enemy; it is a learning tool. At a macro level, it can free up workers to become the new team of newly forming entities that will hopefully be more efficient. It can free up entrepreneurs to pursue new ideas. And it can free up investment dollars for future ventures. However, to trivialize failure as some popular stories of entrepreneurship do or to call it a right of passage, it takes away from the seriousness of the risks entrepreneurs and their supporters face.

So the question is, how do we begin discussing failure in such a way that helps to mitigate disaster, while still celebrating entrepreneurial tenacity to overcome barriers and find success when the odds are stacked against them? And how do we ensure that failure doesn’t close the doors on entrepreneurs from particular backgrounds while leaving those doors open for others? At the end of the day, we still love the grit and determination of our entrepreneurial visionaries like Ford and Jobs, but it has to be a path available to all entrepreneurs with innovative ideas, not just the privileged few.

Join the conversation on Twitter at #Ent4All and be sure to check out the full Myth of the Entrepreneur series!

Be Fearless Spotlight: Fail Forward

This Spotlight is authored by guest writer Caitlin Kelly as part of a special blog series by the Case Foundation featuring Be Fearless stories from the field. Follow along with us as we meet people and learn about organizations that are taking risks, being bold and failing forward in their efforts to create transformative change in the social sector. 


Can you make a living—and help others succeed—by failing? Ashley Good, founder of Toronto-based Fail Forward, likes to think so, though it took a lot of personal failure before she figured this out.

Good wasn’t always so easily categorized as a risk-taker. She got her start studying geophysics and environmental science at the University of British Columbia, after which she had the opportunity to work with the United Nations in Cairo—a sobering experience that taught her “how complex the problems are and how inadequate the solutions.” Later, Good worked as a consultant in the oil and gas industry, flying in and out of Fort McMurray, Alberta, and with Engineers without Borders Canada in Ghana. It was when she followed a sweetheart to Ghana that she first encountered risk head-on.

“I ended up heartbroken, unemployed, living in my parents’ basement in Toronto,” she recalls. “Everything I’d poured my heart and soul into hadn’t gone anywhere. I very much needed a way of dealing with failure.” Good was inspired to take on the leadership of writing a report to document the failures of Engineers without Borders Canada.

Her analysis garnered her a lot of attention. As she puts it, “Failure needed me, as well.” Speaking truth to power demanded a special sort of fearlessness, she says, and that report “played a provocateur role. It was taboo to discuss failure openly, especially to the international development sector and especially charities. It was a learning tool.”

Naiveté helped. “I don’t think I appreciated how dangerous it was when I walked into it,” she laughs. “The failure I was describing was not a question of the quality of effort being applied. The entire system is one of power and ego at its heart.” She admits her own role in this: “In Ghana, I saw a problem and wanted to contribute to a solution. I wanted to succeed!”

Today, as she helps others cope with and mitigate their own painful failures, “it actually starts with decoupling ego from activity. The higher up you get in the hierarchy there’s so much at stake, millions of dollars, all those people who believed in you, who believed that you had the answer…”

“My work asks people to talk about their failures which is painful,” she says. “You have to be true to how that feels for you. Failure looks very different depending how much power you have. Your role is key.” Failing is painful because “we tend to build our identities around certain labels: smart, hardworking, personable, successful, etc. Failure often puts those labels into question, so being fearless in the face of failure is difficult if we don’t have an understanding of what we can hold onto that goes deeper than those labels and allows us to remain a healthy, whole human being. We don’t talk about it enough. Our economic contribution is valued above our spiritual or wise selves.”

The fearless piece of Good’s work is often conceptual—breaking long-held and cherished notions of what works. “We have to stop talking about solutions! If the problem we’re trying to solve had a ‘solution’ it would have been done. Instead we often have no idea! We have some little sparks of ideas but we’ll go into these massive complex problems,” sometimes investing a decade of one’s life and work to solving them.

Key to success, says Good, is redefining what it means to fail. “The word failure is an interesting one,” she says. “I don’t think anyone can be truly fearless. At our best and most courageous, we feel our fear and do it anyway. I do love the spirit of fearlessness… Everything we do has elements of failure and success when we’re involved in something complex.”

Good began her work focusing on the non-profit sector, but, as she quickly learned, everyone fails and everyone needs help figuring out what went wrong. Today she works with foundations, grant-makers and governments. “I really moved up to that level quite quickly,” she says. “I started to see that failure wasn’t a non-profit problem, but was really a ‘how we communicate’ problem.”

Key to examining failure without the usual shame-and-blame requires a fresh point of view—using what Good calls blameless post-mortems. With calm, open-minded discussion, failure offers a useful learning tool.

Living with fearlessness is really what Good does, while performing the fundamental work of “transforming our relationship with failure so we can solve complex problems. That’s a pretty audacious goal! There’s always a tension between optimism and clarity of which path to take.”


Feeling inspired? If you’re ready to begin your own Be Fearless journey start by downloading our free Be Fearless Action Guide and Case Studies.