Why Business Failure is Good

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We've said it countless times to entrepreneurs just starting up businesses: business failure is good. It encourages you to experiment. Your business is young, with an exuberant attitude. Now is the time to start experimenting and messing up. A lot. Unless your a multi-million dollar startup, you're at a stage where Forbes or BusinessWeek won't report your screw-up. If you're not messing up, you're not trying hard enough. Failing lets you understand where you went wrong. It also pushes you to strive even harder to make the next thing a success -- that is, of course, if you continue persevering. Most importantly, it increases your chance for success.

Business Failings: Think Odds!

Keep odds in mind when you're failing: Let's say the chance of one of your inital business product's success rate is 10%. If you took statistics in college, you know that every successive product you build increases the odds of your success by the root of 10%: Chance of ONE business product success: 1 experiment = 10.0% 2 experiments = 31.6% 3 experiments = 46.4% 7 experiments = 71.2% 10 experiments = 79.4% It's no wonder one of Wall Street's most innovative companies, Google, produces five products for every one success. (Of course, all products have differing odds for success, as well as the business producing them. We used 10% as a rough and conservative median range for successful products. You should use the most appropriate figure for your specific business/industry/etc.) The point? Increase the number of experiments you do, and you'll drastically increase your odds of being on that BusinessWeek cover flashin' your million-dollar smile. (Literally.) As Anthony Robbins says, failure is wonderful.

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Posted on April 03

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