Are Failed Entrepreneurs a Good Bet?

Search for the word failure on the internet and what you would find are famous quotes like, “Failure is the first step to success.” Also, “Failure is your biggest teacher.” And some more of that sort. Such philosophical quotations about failure are something everyone agrees on. But when it comes to entrepreneurs, failure is often stigmatized. This can many times be a paradox.

It is a well-known fact that being an entrepreneur is not an easy task. It needs virtues like courage, passion, cussedness, patience and most importantly an innovative mind. And entrepreneurship entails formidable risks. Despite having all the required skills and eminent qualities, if an entrepreneur fails, it becomes disappointing and poignant. But what is worse is the failure does something bigger than the financial loss. They face public humiliation and unfair reproach leading to a loss in their internal confidence and makes it very difficult for such entrepreneurs to rise back.

While stigmatizing their failure, more often than not, people forget that failure isn’t merely an outcome of internal factors; it also involves external factors like market situation, policy regulations, and demand of the particular product. Other factors like labor (or team), the attitude of clients and availability and quality of raw materials (if applicable) also plays a major role. While success and failure are majorly considered as cause and effect phenomena, such factors come into the picture when a deeper analysis is done. So, entrepreneurial failure doesn’t necessarily depict the poor professional forte of the entrepreneur.

A failed entrepreneur happens to be someone who has learned a lot of lessons, not only regarding business but also life as failure comes with enormous wisdom.

In an era when companies need constant innovation for the growing competition and demands of the market, it is important for organizations to have people with an entrepreneurial mindset. Following are some ways by which a fail entrepreneur can be a boon to the organization –

  • Decision making – An entrepreneur is someone who is capable of making decisions independently. And when it comes to a failed entrepreneur, the experience and lessons learned from the failure helps to make a better decision. Using their hands-on experience, an organization can make better decisions.
  • They aren’t afraid to take risks – An organization always needs to take risks to execute tasks. As mentioned above, entrepreneurship entails risk. So, an entrepreneur happens to be someone who has not only taken risks in past but also knows about the consequences. So, a failed entrepreneur has a natural disposition to take risks tactfully. This helps an organization to take calculated risks.
  • Quick Learning – Entrepreneurship needs continuous learning approach. To be aware of the new innovations in the market, it is necessary for them to keep learning. An entrepreneurial mindset allows them to learn new things quickly.
  • Ability to talk with customers – Entrepreneurs are people who have founded their businesses from ground zero. This is to say that they can deftly execute communications with clients. It doesn’t matter if it is a kickoff meeting for a particular project or a query call during the project, they would be efficient in it.
  • Ability to handle a team – Entrepreneurs have great leadership qualities. They are quite competent in handling a team in their respective fields.
  • Ability to take initiatives – Entrepreneurs are proactive workers and can take initiatives independently. This hugely helps the organization.

Considering above points, it is conspicuous that hiring an entrepreneur can prove to be beneficial to an organization. But there is a flip side to this concept, which offers an oppositional reading. Entrepreneurs are generally independent workers, and it becomes difficult for them to work under a ‘manager’. So, there are things that must be considered before hiring an entrepreneur –

  • They should be over with their own venture – It is formidable to hire a person that already has one foot out of the door or looking to work on their failed venture along with the current job. This would lead to a lot of distractions in their present job.
  • They should be ready to move forward – Failing in a business venture is poignant and debilitating. So, the hiring managers should look to confirm that their wounds aren’t fresh and are healed enough to embark a new journey.
  • Commitment – Entrepreneurs should be committed to the new assignment and ready for a long haul. This will not be possible if they are looking to launch another business or looking for a job just to make up for the financial losses of their business.
  • Willingness to work with someone else – Entrepreneurs are leaders and they are not habitual to be the second fiddle to someone else. Recruiters should make sure that the failed entrepreneurs are aware of the fact that there is only one captain of the ship.

Considering such factors would lead to a better decision while recruiting a failed entrepreneur.

To cite a prominent example of how failed entrepreneurs can be beneficial to an organization, let us take a peek into Tata Consultancy Services. TCS had hired 15 entrepreneurs who helped to build 20 software products in the area of mobile solutions. One such entrepreneur developed a wireless solution that a South Korean mobile firm wanted to buy. This talks about the possible successes that such entrepreneurs can deliver.

Analyzing the above facts and perceptions, it can be concluded that a failed entrepreneur can be a good bed to an organization if hired tactfully; as failure is not an attribute of a person but has its roots in so many other factors. So, hiring managers should look beyond the cognition and stigma about the failed entrepreneurs and look to hire them in the interest of the organization.