Recently, we wrote a piece about how real startup depression is in Malaysia and how frequently it happens.
No surprise since it’s believed that 9 out of 10 startups fail. Many venture into this industry thinking they can achieve success with a simple formula of build a product, market it to the masses, and then just wait for the money to come rolling in.
If only it were that simple.
But failure doesn’t only equal to bad things, it can be a huge lesson to be learned.
Malaysian Global Innovation & Creativity Centre (MaGIC) recently rolled out their annual MaGIC Academy Symposium 2017. We attended one of their fireside chat sessions discussing the topic “Rise from the Ashes” which introduces a panel who have been to hell and back, bringing back a dose of reality and experience.
Shafiu Hussain (Lead Product Designer of Mindvalley), Elisha Tan (Founder of TechLadies), and Dr. Paul Jambunathan (Senior Lecturer from the School of Med & Health at Monash University) shared a few stories of their struggles handling failed startups and how they overcame it.
Here are 6 key lessons they picked up along the way and how they made their comeback to meet the demands of the digital revolution.
1) “Media is not traction. Traction is traction.”
Elisha started off by talking about her first startup called Learnemy, an online marketplace that matches people who are interested in learning a skill to those who can teach it. To launch it, she had to self-learn the art of coding which became bait for the media to pounce on.
It was a glowing start for her and she personally felt great hearing and reading good things written about Learnemy. But then she quickly began to realise that having media attention is not all it seems.
“As a founder, you try to stay optimistic. But at some point, you have to be brutally honest with yourself. Look at the hard facts in your face. If traction isn’t there, there are no other means, it’s time to end it.”
2) “Your startup doesn’t define your self-worth and self-confidence.”
Not having enough money and being mentally exhausted were the other telltale signs Elisha needed to convince her it was time to face facts and move on. Shutting down Learnemy was the hardest thing she had to do and at that point, she saw herself as nothing but a failure.
It’s easy for entrepreneurs to let their startup define their worth and confidence as it becomes their image. So when a startup is no longer there, they don’t feel like the business failed. They failed.
“I couldn’t stop crying for 3 days, but I’m thankful I had a good support network around who believed in me when I didn’t believe in myself. That helped me to realise that yes, I failed. It’s terrible and painful but it’s not the end of the world,” said Elisha.
3) “Raising money doesn’t mean things will be better.”
Shafiu’s entrepreneur tale began with his startup called Taximonger back in 2011. A simple concept of an SMS-based app where passengers could text the number plate of taxis and a message would be returned showing the rating of the driver.
He mentioned there were some ups and downs and ultimately, it had to be closed after 2 years of running. It was hard to deal with the closure, especially since he was used to the need of being accepted by others.
No one really talks about the breakdowns so most entrepreneurs make things up and lie to themselves. It’s considered a “fake it till you make it” mentality.
“Even in the startup scene, we have people teaching us everything from making a deck to raising funds. But no one teaches you how to deal with the mental breakdowns and all this.”
“Some people think that if you raise money, it’ll be better but it’s not. It actually magnifies the things you’re going through.”
4) “Don’t involve your identity into your business.”
Having over 30 years of experience in psychology, Dr. Paul brought up how easy it is for people to put their identity into a business. An easy mistake carelessly done without noticing.
His mistake was when he first came home from living abroad to promote psychology in Malaysia as it was fairly new. His journey led to 4 of his clinics shut down, so he learned to start a business objectively.
“I’m using my name to attract customers, that’s it. I don’t know whether the operation is going to be successful or not but I’m ready to shut it down whenever needed.”
“You’ve got to be able to disconnect yourself from what you’re attempting to do when it’s viable. When it’s viable, that’s when I’d suggest for you to invest in yourself,” said Dr. Paul.
Elisha chimed in with her personal experience of running her side project, TechLadies. After the end of her first startup, she admitted there was a sense of fear to start again. That’s why she didn’t want her next venture to be a startup, it is more a passion project.
“I didn’t care about profit loss, funding, pitching, none of that. It’s about me doing what I want to do and seeing whether anyone was on board with the mission as well. Instead of identifying with a business, I identified myself with a mission that I’m trying to achieve.”
“A mission can have multiple solutions. Even if one fails, it’s fine. I can move on and try another solution. I honestly didn’t expect TechLadies to turn out so well because a bootcamp is quite an intricate program. But it worked and a lot of people were keen on it so from there, it just grew,” said Elisha.
5) “Don’t quit your day job to start a startup.”
It’s common to hear articles and books preaching for entrepreneurs to drop everything and focus their all into their startup. Shafiu couldn’t stress how that was one of the most stupid things founders can do. He went on to say how this sentiment of “leaving everything and taking that leap of faith” is completely ridiculous.
Instead, his recommendation is for people to start a side project and test the waters first. Even if someone offers to invest and you see a little bit of traction, don’t give in and take time to figure it all out first.
“Keep running the side project and once you see a bit of revenue coming from it, invest more time. It’s unhealthy to just focus everything and all you have on a startup from the start.”
Dr. Paul agreed with this, telling his story of how he had to start his first clinic slowly as he was still juggling his full time job as a lecturer. After going through an intense cycle of starting up clinics only to have them shut down due to “not enough demand”, he realised that it is dangerous to not have a backup plan to fall on to.
“I don’t earn enough from my side project, I earn more in my day job. Thankfully, my day job has been restructured enough where I have certain time off in the week to invest in my side project. I started my own clinics, but you always need to have stability to fall back on at any time.”
“I’ve faced failure too many times. It’s a real slap in the face but I believe in what I do because like everyone else, I have a passion. You just have to keep holding on but never give up your day job.”
– Dr. Paul
6) “You hold the power to decide when you want to pivot or persevere.”
One of the questions raised during the session talked about how would one know whether it is time to end a failing startup or not. Elisha then shared a bit of her time in Silicon Valley where she met some people, threw a bunch of data to them and asked a question: would you pivot or persevere?
Most of the response she got fell along the lines of “it’s up to you”. Naturally, she felt mad at the clichéd type of answer but it held its truth in a way. It’s a personal decision that can only be made by the founder but she shared 2 guidelines that helped her see things clearer.
“First, ask yourself if you have the ideas to help you not feel stuck with your business. The second is to ask yourself if you have the resources to handle these ideas. If the answer to both is no, then it’s time to pack up.”
Check out the latest industry with the highest retrenchment rates in Singapore here.
Feature Image Credit: MaGIC