Earlier last month, the Board of our portfolio company Pinchpoint decided to shut down the company. Just like that, for Pinchpoint it was “Game Over!”.
Most startups fail. This is true for VC funds, and it is true for startup communities around the world. I believe that for a young startup community like ours, we are going to see many failures before we start seeing successes.
We’re all used to hearing about how failure is part of the entrepreneurial process, how fear of failure shouldn’t come in the way of entrepreneurs launching new ventures (or employees joining new startups), and how a culture of embracing failure is vital for a healthy and vibrant startup community.
All this talk is great in theory, but none of it changes the fact that – let’s face it – failure sucks!
Failure sucks for the founders, it sucks for the investors, and it sucks for the team who believed in a dream for which they have given usually several years of their lives in hard work and unwavering commitment. It especially sucks for first-time founders because it’s usually their first run in with failure publicly and at a grand scale. This often places first-time founders under financial and emotional stress, possibly mixed with feelings of responsibility, and perhaps even guilt, towards employees and investors.
We can’t change the reality of failure, but we can change how this reality impacts us as individuals and as a community. To do so, we need to celebrate, learn from, and embrace failure.
By celebrating failure we reaffirm to ourselves and to others that the journey is as, if not more, important than the destination. Pinchpoint may have not been the first funded startup in Palestine to shut down, but it is probably the first to shut down after having achieved significant milestones. Whether it was the cool games developed and produced, the new talent trained, the level of VC-funding raised, or the nascent gaming industry in Palestine which they helped advance – all these are achievements that deserve to be recognized.
When our community comes together to celebrate failure, we do so in recognition of such achievements and in recognition of the founders’ attempt to innovate and create value. In many ways, we’re reminding the founders and ourselves that we shouldn’t be deterred by failure, and that instead we should see this as one less failure closer to success.
Partly because it’s human nature, and partly because of what media tends to focus on, we mostly hear about and want to learn from successful founders. Some may believe that there’s some secret knowledge successful founders have, and that if they can just learn it, they too can replicate the same experience and become just as successful. Of course, this is rarely the case.
At the same time, we rarely hear about failures, and we rarely attempt to learn from the experience of startups that didn’t make it. While each startup’s experience is unique, there are many challenges and lessons that are common to all startups and founders. Whether a startup succeeds or fails, the common lessons we can learn in each case are equally important. Needless to say, there’s always going to be more lessons available from startups that fail than from startups that succeed.
“Embracing failure” practically means absorbing it. When a startup shuts down, the company’s collective knowledge capital, experience, and skill are all back on the job market. In an ecosystem like ours where the talent pool is constrained, this is a treasure trove for other startups. At a minimum, other startups should open their doors to interview every member of the team even before the failing company starts winding down. This simple gesture sends a strong message that whether you are a founder or an employee of a failed startup, your experience is valued, and if you have what it takes, you will not be left jobless.
Many experienced tech and business talent (some of whom have entrepreneurial potential) are reluctant to either launch or join startups (at least partly) because they worry about job security. If we as a community of startups don’t come together to help absorb the team of a failing startup, we are effectively bolstering these fears. If every time a startup fails most of the team winds up unemployed, it will further discourage experienced talent from joining startups, and make it harder for founders to recover quickly and get back in the game for their next startup.
There are always going to be more failures than successes. This is why our attitudes and reactions when faced with failure are more important to the sustainability and continuity of the ecosystem than when faced with success. When we come together as a community to support the founders and the team every time a startup fails, a culture of resilience will start to emerge, and the notion that with each failure we are collectively closer to the next success will start to take hold.
Join Khaled, Ammar, Tareq, and me on Thursday, May 25 at 5:00pm for a “wake,” where we will celebrate together the end of the Pinchpoint story.
Saed Nashef سائد ناشفA technologist, entrepreneur, and investor, I co-founded Sadara Ventures – the first early-stage venture capital in Palestine – to invest in exceptional entrepreneurs and help them build great companies. This blog is my attempt to capture and share some of my thoughts and experiences along this journey. Read more ...
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