For American entrepreneurs, failure a badge of honour, unlike in Sri Lanka
By Rohan Gunasekera
May 02, 2017 06:57 AM GMT+0530 | 0 Comment(s)
Raleigh-Durham, USA (ECONOMYNEXT) – Failure carries no stigma for entrepreneurs in the United States of America, unlike in Sri Lanka where unsuccessful forays into business can be considered shameful, or worse, leading to scorn and damage to one's reputation.
Throughout the USA, particularly in thriving entrepreneurial and innovation hubs like this city in North Carolina, there is renewed government and private sector efforts to encourage risk taking and business start-ups, but in a carefully planned, systematic way.
John Hardin, Executive Director of the Office of Science, Technology and Innovation (OSTI), North Carolina (NC) Department of Commerce, says entrepreneurs are not discouraged by initial failures in business, which is not unusual.
"Many entrepreneurs take it as a badge of honour," he told Economynext.com during a tour by reporters of US innovation and start-up hubs organised by the US State Department’s Foreign Press Center.
"You get many serial entrepreneurs who started many companies."
The start-up eco-system develop by the US has many programs which teach budding entrepreneurs they need to learn about failure and how to prepare for it.
"Failure happens typically because development projects that companies embarked upon did not work out as expected," explained Hardin of North Carolina Department of Commerce’s OSTI.
"Just because they failed once or twice doesn't mean that they are failures," he added. "You have to fail to succeed – success can be something you achieve in the long term."
There’s still no agreement among scholars on how well failure prepares budding entrepreneurs to do better.
Some studies in the USA show that entrepreneurs who failed once have a better chance of succeeding the second time around.
Other studies, especially from Europe, show that unsuccessful entrepreneurs do not necessarily do better the next time.
The Department of Commerce has grant programs aimed at helping start-ups in their take-off phase.
These, along with university mentoring programs and others providing working and meeting spaces are part of an evolving ecosystem aimed at encouraging entrepreneurship in the US.
Firms which fail once in their early stages can apply for grants again but must prove they are eligible and can do better the next time, Hardin said.
The Entrepreneurship Initiative Garage, run by the NC State Centennial Campus, offers a living and learning community with residential apartments for student entrepreneurs.
"We provide start-up spaces in the ‘Garage’ and a course that provides an introduction to entrepreneurial thinking," explained Megan Greer, director of communications and outreach of the Entrepreneurship Initiative of NC State University.
"We’re all about teaching students how to think like entrepreneurs – so students understand that not only can they go to graduate school, get a job, but they can also create employment by doing start-ups."
The NC State University's 'Garage' has 5,000 square feet and around 750 student members.
The members are mainly engineering and management students but different colleges of the university and disciplines are represented.
The program is starting to see an increase in textiles students and those from the humanities programs.
Greer said the university wants to create interdisciplinary teams and for students to interact better with each other.
Laura Lorek, editor of Silicon Hills News, said Austin has several entrepreneurs who are now in their third or fourth companies.
"Failure is not looked upon with stigma but upon something valued to be learned from."
There are start-up companies known as the 'walking dead' – firms which have enough money but are uncertain of their future.
"As a start-up it’s really hard to decide when to quit," Lorek said. "You may be on the cusp of a big breakthrough or you can just go until you fall off a cliff. Most start-ups fail within five years."
But some of the biggest failures during the dotcom bust have now gone on to succeed, Lorek noted.
"You learn a lot from failure, if you keep trying. A lot of the time, venture capitalists will give them another shot. Failure could just be because the entrepreneur had the idea at the wrong time."
(This story is part of a series from a tour of America’s new innovation and start-up hubs, covering Raleigh-Durham in North Carolina, Austin in Texas and San Diego in California organised by the U.S. State Department’s Foreign Press Center.)