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No matter how much effort you put in your startup, things don’t always go to plan. But after failure, the worst thing you can possibly do is to give up! You will have to wisely carry out a perfectly designed startup post mortem strategy.
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Things do not always go as planned. You may have put a lot of effort into your startup, only for it to fail.
In fact, this is what it happens to almost 90% of the startups.
It’s easy to beat yourself up and give up entirely. In reality, this is the worst thing that you could possibly do! This is not the end. You won't imagine how many successful businesses failed in the beginning.
It can be a difficult time. Everything you have worked for has come crashing down. However, feeling sorry for yourself will not bring success. You need to look at what caused the failure. This stage in your startup is called a post mortem.
A post-mortem is not about highlighting failures to assign blame. It’s about you examining what went wrong and avoiding that ever happening again. Construct a plan that focuses on your previous failings, and also focus on what you can do to increase your chances of success.
When your startup is starting to fail, being in a state of uncertainty and doubting all of your decisions that have led to this point is a bad place to be. You need to make the call on whether to change some things up and see where they take you or officially shutting down your startup. If closing your startup is the route you decide then it’s time to enter the next phase with open arms and accept that failure is only part of the entrepreneurial journey and not having that failure define you.
Learning is essential. You need to remember what you have gained. You have gained knowledge, and that is something that you did not have beforehand. You may have lost money on investments (or perhaps not even that, if you have read our article on how to start a startup with no money), but you can’t beat yourself about that. What you have gained is more valuable than money, as it will take. You startup shutdown was a blessing in a way because you have walked away with hunger and a mind full of fresh ideas. Thinking in this positive way is what will drive you towards success.
You also need to accept that your business idea may not have been ideal. It’s not always about selling what everybody wants you to sell. You can focus on your passion because you’ll be a lot more likely to produce positive results when you’re focusing on something that you love. If you are selling shoes, but you have no interest in shoes, it’ll be less likely to work.
A pivot is a shift in business strategy to test a new approach regarding your startup's business model or product after receiving direct or indirect feedback, and it's one of the fundamental concepts of lean startup methodology. Once you’ve decided to pivot your company, you need to take into consideration the factors that make a successful pivot. Here are some tips to help you reduce risks that are associated with pivoting:
Perhaps you were not thinking realistically. You may have expected to turn into Bill Gates or Steve Jobs within a year. For most of us, this will not happen. You can have people that inspire you, but at the end of the day, you need to be yourself. These people are successful because they have been themselves throughout their journey. Yes, they failed at times. Life was not always easy for these individuals, and they have most likely been in your very position. However, with a realistic mindset, they achieved their goals eventually. They never gave up, and they kept pushing towards their dream. It may sound cheesy, but this is the reality. It will not be an easy road, but if you genuinely believe that you can go far, you will. If you do not feel that way about yourself, you’re right. It’s all about your mindset.
Like you would with any job, leaving on good terms is essential. There’s a chance in the future you may want to start another company, and how you handle your company failure now will foreshadow for how likely you’ll get funding for future goals. If you leave everyone that was apart of your startup on bad terms, it’ll be much harder for anyone to support you in the future.
It’s imperative that you take the following actions:
Panicking is probably the worst thing you can do. You have to start from scratch, but see the benefit in this. You have another chance to succeed, and that’s a blessing in itself. Panicking is not going to solve anything.
Think of a time when you were planning to ace a job interview, but it didn’t go your way. Did you stop searching for a job entirely? Did you never search for a job again? No. You thought about where you went wrong and improved in that area. We all get knocked down, but when you know how to get up, it’s no longer a problem. You will have grown as a person from this experience, even if you do not know it.
Keep telling yourself that a startup shutdown is not a loss because that’s far from what it is. It is a learning experience, and you will look back at this moment and realize this. Your next attempt will be so much better once you remember what went wrong, and promise yourself never to make those mistakes again.
Depression, anxiety, and burnout are also common among entrepreneurs, even if their startups are thriving. When experiencing your startup postmortem, you will feel upset and deterred. At that moment getting your mind into the right frame of mind is the most important to making sure your decision-making skills are where they need to be. You want to be in a state of positivity and learning focused not defensive or hysterical. Thinking of what to do next after a failure is reasonable and vital but taking care of yourself comes first.
In your time of post mortem, your state of mind will not be in the best shape. Having a good support network is crucial to help you mentally in getting back to the right mentality and moving on from your failure. It’s important not only for business but for personal life to have and continue to build good relationships with your family and friends because they’re the first people who will help you in your time of need. Not only that but it’s the relationships with these people that are going to foster honest and unbiased honest opinions that your going to need and not just hearing what you want to hear that you’ll most likely get from others, not in your inner circle of real friends and family.
To maintain your career momentum, you’ll need to recover financially. Depending on your business failure and finances, you may be in a compromising spot. You want to be sure you have an emergency fund to keep you safe for the future. If you have not made an emergency fund, do so as fast as possible. Not having any funds and looking to have another stream of income quickly is not a fun journey. It’s important having a dependable, stable stream of income, rather than jumping from one entrepreneurial venture to another.
Take some time to fully understand your finances in case your thinking about working for yourself ahead of time. Also, use that time not only to figure out your current finances but your future investments as well, so you have no surprises in the future in case you see yourself in financial woes again.
After finding some financial stability and feeling you’ve learned some vital information about the post mortem of your startup, it’s time to start getting ready for your next opportunity. After having some time since your startup shut down, you should be in the right state of mind to decide whether or not to return to entrepreneurship or goes towards the employee route.
Whatever path you decide to continue entrepreneurship or go towards being an employee remember, it helps to increase your network. Growing your network will help you obtain a job faster, but if you chose ever to go back to the entrepreneurial path, you're bound to find possible investors for your business. If you decide the employee route, you’ll have the possibility of a more lucrative career.
Writing about your failed startup may seem like a negative on your resume. But talking about what you learned as part of that failure is a positive. You'd be surprised that a lot of interviewers like to hear people talk more about their failures than their successes - especially when they speak about what they took away from that experience. But it’s important to get your resume looking good and figuring out how to get yours to stand out from the competition.
You can also apply for senior roles in any startups that were similar to what you have done in your startup or become a consultant as you have experience in scaling up a venture from scratch.
The experience gained from a failed startup is valuable, and an employer will value that because you've been in their shoes. It proves that you're a person grounded in practicality and experience and only theory because you have experience building a business of your own.
And you should definitely include this failed startup as your working experience:
You may not think of now, but if you're looking for employment after your failed startup, you’ll be ahead of other applicants. When looking into your new career path the experience you have will put you ahead of other applicants who have never run a business. For example, if you want to be an account executive and make your way up the ladder to become manager one day. Employers will have you in the final rounds of interviews vs. others who are looking for a career change but have never run a business and don’t know what it takes to run one.
It’s important to remember when it comes time to have your interview not conveying yourself as someone who is perfect and has no weaknesses. Many people believe this is the correct thing the end it’ll do more harm than good. The employer will see you as someone who lacks self-awareness. Talking about what you learned from your startup post mortem failures and how you handled them, learn from them, etc. It’ll show a real sense of self-awareness to an interviewer.
Closing a business is not the end of your story. Finding ways to deal with closing a startup without being defined by it is the only way to move forward and start anew. With that failure under your belt, you’ll look back and see it did a lot of good more than bad. What you learned from your startup postmortem will give you a vast amount of knowledge you did not have prior. What you do with that knowledge is up to you. You can start another company or use that knowledge to enter the workforce. Whatever path you choose it’s important to remember failure is just the first step of your journey to success.
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