By Ephraim Mwai,
Failure is a reality entrepreneurs in Kenya face when they start a startup. We previously highlighted some preventable reasons that cause startups to fail. Sometimes, despite entrepreneur’s best efforts, his or her business fails nonetheless. Many people would write off entrepreneurship as a waste of time, but a few optimists will chalk it up to learning and try again. But how much failure is learning and experience really worth? Learning is usually used as a blanket payoff for resources and time spent on a failed venture but should it really cost that much?
John the App Developer?
Let us take the hypothetical case of John the Entrepreneur. John came up with a brilliant idea to create an app that helps toddlers learn to read. He put together a talented team of developers and designers to create the perfect app. The vision was clearly laid out in his mind from the features down to fonts and colours. They spent sleepless nights at the office figuring out how to include features that help parents monitor progress and score the children. John even hired animators to create high quality instructional videos.
The team added cool features like scoring progress, customizable reports and sharing on social media. They also spent a lot of time integrating Visa, Mastercard and M-pesa payment options to the app.
After months of development and testing, it was ready to launch. The team, excited and anxious uploaded it on Google’s Play Store and promote it on social media. After a week of pushing nothing happened. It was installed once after a month but then deleted shortly after. The idea had flopped.
Learning is Unnecessarily Wasteful
The natural question would be, “Why did the application fail?” The general answer would be there was no market for the product. People just did not like it. John was an optimist and wrote this off as the price of experience and learning. However this begs the questions what did he learn? There was no money to be made in apps? Parents didn’t want to stress their children when they are still toddlers? Perhaps they should have built a better product somehow? With no sales or customers to speak of, any of these lessons would be nothing more than guesswork!
John had no empirical way to measure the lessons he could take away from the experience. It would be difficult to establish a direct cause and effect between what his startup did and what factors influence success or failure should he try again. It is also possible that he could have learned the same lessons had he spent less time and money building a simpler product. Perhaps he unnecessarily wasted his resources and acquired no concrete data to justify if what he learned was valuable. It could all have been a waste!
Leap of Faith
Starting a business takes leaps of faith based on specific assumptions. In John’s case, some of his assumptions may include:
- Enough parents will pay for a solution to help toddlers learn to make the idea viable
- An app is the best way to deliver content to parents and children
- Parents need a full range of payment solutions
The business has to be set up to test these assumptions from the very beginning at the lowest possible cost within the shortest possible time. Failure is always a real possibility. However for failure to be useful, it must result in insights that will help build a sustainable business on the next try. Otherwise, entrepreneurs will be throwing good money after bad repeating the same mistakes over and over again.
This article was originally published in the Centum Foundation.